Okay, Atlas

[Free Bird]

Throw out the code. Make your own. It is simply far too complicated to simply fix. It needs to be rebooted. How would you?

[bedstuy]

I don't presume to know exactly how to change the tax code.  And, you can't throw it out. 

Our entire economy is built off the current tax code.  Billions and billions are invested in reliance on the current system.  So, it's not something you can change radically at any point.  Think of the tax code as more like an oil tanker than a Maserati.  You can change course, but it needs to be gradual and well thought out.

And, what is too complicated?  If you're taxing extremely complicated economic activity, why wouldn't the rules be complicated?  I would just worry about unintended consequences and implications I didn't consider.  The people with substantive opinions on this subject are accountants and tax lawyers, not former pro-wrestlers and gadfly politicians. 

Instead, I would just look at taxation as public policy.  You have the same goals as any other area of public policy, maximizing fairness, both distributional fairness and individual fairness, and public welfare.  You want it to be efficient and encourage good outcomes. 

I'm pretty much open to how you go about doing that.

[muon2]

If you are starting from scratch (and I agree with bedstuy that that is nearly impossible given the linkages between the tax code and current economic activity) then I think the initial question should be what should be taxed. Broadly one can tax wealth (eg property tax, estate tax) or economic activity (eg income tax, sales tax) or assess user fees to cover costs of government services (eg licenses, permits). One can also create a mix of those types of revenue. Within each type one can then select revenue sources that meet the policy goals of the revenue system.

[136or142]

I don't presume to know exactly how to change the tax code.  And, you can't throw it out. 

Our entire economy is built off the current tax code.  Billions and billions are invested in reliance on the current system.  So, it's not something you can change radically at any point.  Think of the tax code as more like an oil tanker than a Maserati.  You can change course, but it needs to be gradual and well thought out.

And, what is too complicated?  If you're taxing extremely complicated economic activity, why wouldn't the rules be complicated?  I would just worry about unintended consequences and implications I didn't consider.  The people with substantive opinions on this subject are accountants and tax lawyers, not former pro-wrestlers and gadfly politicians. 

Instead, I would just look at taxation as public policy.  You have the same goals as any other area of public policy, maximizing fairness, both distributional fairness and individual fairness, and public welfare.  You want it to be efficient and encourage good outcomes. 

I'm pretty much open to how you go about doing that.

Good job.

Given the title of the thread, and the OP saying "code" I assumed the OP meant come up with your own Atlas Forum source code and put up a new message board.  I wondered why that was in the economics section.

You're obviously smarter than me.

[King]

False dilemma.

[DC Al Fine]

I don't presume to know exactly how to change the tax code.  And, you can't throw it out. 

Our entire economy is built off the current tax code.  Billions and billions are invested in reliance on the current system.  So, it's not something you can change radically at any point.  Think of the tax code as more like an oil tanker than a Maserati.  You can change course, but it needs to be gradual and well thought out.

And, what is too complicated?  If you're taxing extremely complicated economic activity, why wouldn't the rules be complicated?  I would just worry about unintended consequences and implications I didn't consider.  The people with substantive opinions on this subject are accountants and tax lawyers, not former pro-wrestlers and gadfly politicians. 

Instead, I would just look at taxation as public policy.  You have the same goals as any other area of public policy, maximizing fairness, both distributional fairness and individual fairness, and public welfare.  You want it to be efficient and encourage good outcomes. 

I'm pretty much open to how you go about doing that.

What Bedstuy said.

Another problem with starting from scratch is that many is not most of the deductions and credits out there aren't actually special interest loopholes. They're mostly either good things the government is trying to assist, or attempts to correct inequities in the tax code.

It still might be in the best interest to simplify the code drastically, but the vast majority of the loopholes and provisions are at least plausible and their elimination would cause an uproar. Try telling Nana that she can't deduct medical expenses or your brother in-law his IRA contributions don't get a tax break.

Lastly, (and this isn't aimed at you Free Bird) I hate how everyone posts these ridiculously specific tax plans on Atlas. I do tax planning for a freaking living and my policy proposals aren't that specific. Why? Because no one except a very small set of professionals and civil servants can make an educated guess about these things.

[DC Al Fine]

Ok, with that rant out of the way, here's my tax plan:

Framing

• Tax all income the same. Dividends, Earned income etc, should have the same rates.
• Tax income at the individual level. No corporate taxes as these are passed onto consumers. Raise taxes on the rich proportionately.
• Aim for simplicity. No 18 bracket tax plan from me

Rates
Subsidies should be paid out until a person is brought out of poverty. Then a few progressive brackets to increase burden as circumstances increase. Something like:

$0-$25 000: 0% + cash payments from the government
$25 000-$40 000: 15%
$40 000-$120 000: 25%
$120 000- $400 000: 35%
$400 000+: 50%

Deductions/Credits
Throw in a few well placed deductions/credits for good behavior and significant burdens on families:
E.g. Retirement savings, donations, child care, catastrophic medical expenses.

[🦀🎂🦀🎂]

Is this when someone walks in and says all taxes can be abolished and replaced with Georgist style Land Value Taxation?

[Sprouts Farmers Market ✘]

Rates
Subsidies should be paid out until a person is brought out of poverty. Then a few progressive brackets to increase burden as circumstances increase. Something like:

$0-$25 000: 0% + cash payments from the government
$25 000-$40 000: 15%
$40 000-$120 000: 25%
$120 000- $400 000: 35%
$400 000+: 50%

I support something close to this, but I much prefer a gigantic deduction for the first batch of income rather than just a 0% rate, then even rich people pay nothing on their beginning income, and you lose out on a lot of money that way.

$0-$40,000: 10%
$40,000-75,000: 15%
$75,000-200,000: 25%
$200,000-500,000: 35%
$500,000-1,000,000: 45%
$1,000,000+: 50%

As I have stated previously, I love Rand Paul's $50,000 deduction - by far the best tax proposal I have seen despite the rest of it being atrocious. I don't know exactly how I would implement that - this is all off the cuff, I haven't even calculated how much revenue the above brackets would raise - but a minimum of $20,000 or $25,000 as a deduction that goes up when you have a larger family - as high as $75,000 perhaps would be acceptable to me (assuming this brings in enough revenue - $75,000 sounds a bit high like a dream-world scenario). This probably doesn't bring quite enough in sadly, but I'd start with that as a basis.

I also wouldn't say no corporate income tax (Aren't you an accountant?! That's gotta hurt the tax departments.), just as I wouldn't say no dividends benefits, though lower certainly. The dividends serve a critical purpose and a rise would really hurt investment initially. Those in the lowest two brackets should probably pay 0% (or 0 and 5% respectively). The rest should be probably 25% (with a small benefit for the 25% bracket).

[DC Al Fine]

I also wouldn't say no corporate income tax (Aren't you an accountant?! That's gotta hurt the tax departments.), just as I wouldn't say no dividends benefits, though lower certainly. The dividends serve a critical purpose and a rise would really hurt investment initially. Those in the lowest two brackets should probably pay 0% (or 0 and 5% respectively). The rest should be probably 25% (with a small benefit for the 25% bracket).

Yeah that would probably eliminate my job... On second thought we need an extremely complex tax code

[Indy Texas]

The Big 4 accounting/audit/advisory firms, various major law firms, and companies like Intuit and H&R Block would never allow such a thing to happen. The financial services industry wouldn't either since much of the "value" they create for their high-end clients is based on helping them make money in ways that minimize their tax burden.