September 5, 2017
Why Can't the Whole Tax Code Be More Like FICA?
The proposals for tax reform being considered by Congress so far just tinker around the edges. The Trump plan is quite good, about as good as a plan could be without changing the whole structure of income-based taxation. That structure consists of several tax brackets together with a myriad of deductions, phase-outs and arcane rules. And that is just the individual code; the corporate code is worse. Now is a rare moment in American history where we have an opportunity to rip up the old system and replace is with a simpler, fairer, more transparent tax code. There are three main pillars to the federal income-based tax code. Around 45% of federal revenue comes from the individual income tax. Some 10% comes from the corporate income tax. Another 35% comes from the FICA and SECA taxes, which directly fund OASDI --- Social Security retirement payments and disability insurance --- and, Medicare (HI). FICA stands for “Federal Insurance Contribution Act” and SECA...(Read Full Article)