Tuesday, May 09, 2006
Simplified Tax Policy
1. One Flat Tax Rate for income.
2. Another (lower) Flat Tax Rate for investment income.
3. One, and only one, deduction: A standard deduction, of the per capita GDP, for every individual.
No taxes until you make over $42,000.
Married, no taxes until $84,000.
Incentive to have a child for every additional $42,000 of income.
The only way for businesses to take advantage of the deduction is to hire more employees. Companies have incentive to hire more workers, especially for jobs with salaries $42,000 and below. There is also incentive to pay employees with families more.
What do you think?
For example, meet Joe. He earns $50,000 a year. Lets say the tax rate is 20% and lets keep the GDP per capita at $40,000; Joe pays 4% of his income to the IRS. He then gets a raise of $10,000; he now pays 6.7% of his income in taxes. Then he sleeps with his boss and gets a $40,000 raise, he now pays 12%. He then gets married with a housewife, now he pays 4%.
So is that a flat rate? It's just a lot of brackets.