Try this for a fairer tax
Whom do you think the additional 87,000 IRS agents are going to audit? If you have an Etsy, eBay, or even FB marketplace sale, it will be audited. If you use PayPal, Venmo, Cash App, or any other digital wallet, you will be audited. If you own or owned any cryptocurrency, you will be audited. This is not rocket science. A few years ago, the IRS wanted to track every purchase over $600 if not for the pressure from citizens, and they will try again.
The time is now to get a bipartisan change to our current unwieldy individual income tax code. The current income tax code is huge and has over 70,000 pages of regulations. The Internal Revenue Service Code and accompanying regulations are more than four million words, not including court cases interpreting the code.
I am a fan of the Fair Tax or even a flat tax, but those alternate taxes do not have the support from any in the Democrat party. But I think I have a tax code Democrats could get behind.
First, what I suggest is a three-tiered tax rate that is revenue-neutral. Be it 5%, 15%, 25% or 10%, 20%, 30% — as long it is revenue-neutral. Ideally, the first $50,000 would not be taxed (or $60,000 or higher). The first tier would go to $100,000, the second tier to $250,000, and above that for the third tier. Those rates would go up at the same rate as the SS benefit rate increase.
Second, no deductions at all. Zip, zero, nada. This would be an individual tax rate. No joint filing, no dependent deductions. What you make is what you are taxed.
Third, all income is available to be taxed — meaning that those golden medical plans an employer gives the employee will be taxable. So are short-term and long-term capital gains. All those benefits your employer pays for you would be eligible. No longer would Warren Buffett get the same tax rate as his secretary.
All benefits are available to be taxed. Social Security, Medicare, Medicaid, housing grants, food subsidies, direct welfare, training grants, education grants all eligible to be taxed, but the $50,000 start of actual taxes could be raised. This inclusion would put all on a level playing field.
What to do with all the IRS agents? Obviously, some would be needed to audit businesses. But why not turn them loose on where the real fraud is happening — the spending by the federal government? Many presidents thought they could control the waste of government spending but failed. But with the IRS now auditing the government departments, reduction in waste would be a better money savor than auditing individuals.
Wayne Rowan is one of the hosts of the What the Riff music podcast.
Image: PublicDomainPictures via Pixabay, Pixabay License.