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New Tax Simpler Tax plan for 2018
mogley98
Member Posts: 18,297 ✭✭✭✭
1.)Eliminate corporate taxes, Corporations don't really make money people do. If you take it out you pay taxes on it.
2.)Social Security and Medicare are taxes plain and simple.
Let's eliminate the confusion and charge one tax.
We currently have seven rates and no one knows how many deductions/credits. Here is the 2017 Tax tables, I added a column taking into account the effect Marginal tax rates and Social Security and Medicare have on the real tax rates.
Tax Rate REAL RATE 2017 Taxable EARNED Income
1-10% 25.3 $0- $9,325
2-15% 25.3-29 $9,326 - $37,950
3-25% 29-34.7 $37,951 - $76,550
4-28% 34.7-37.6 $76,551 - $116,675
5-33% 37.6- 36.8 $116,676 - $208,350
6-35% 36.8-36.9 $208,351 - $235,350
7-39.6% 36.9- $235,351- Up
So my proposal would be everyone gets one deduction from all income for calculation of taxable incomes- $12,000.
That is your standard deduction plus your dependent deduction for one person.
No changes for married, single, more children etc.
Eliminate all deductions and credits NONE, PERIOD.
If you make 12K or less you pay no taxes you get nothing back. No more wealth redistribution.
I proposed 2 new rates which would include all income, earned, distributions, dividends, capital gains, Etc.
My proposed new rates
First $0-$45,000 of TAXABLE income = 25% (Since your first 12,000 is tax free Zero starts at 12001)
$45,000-up = 30%
Some notes:
Currently those earning 127,500 or less effectively pay 15.3% in Social Security and Medicare taxes on all earnings. (employers ahve to pay half but it is still paid)
Those earning greater than 127,500 no longer pay the 12.4% Social Security tax, they do still pay the 2.9% Medicare tax.
Notice the people in the higher tiers of rate 4 and lower tiers of rate 5 actually pay a higher effective tax rate than those earning a higher income!
Most folks earning more than 250K don't get their income from "earnings" the special rates for Capital gains, Distributions, and dividends usually lowers their effective rate.
2.)Social Security and Medicare are taxes plain and simple.
Let's eliminate the confusion and charge one tax.
We currently have seven rates and no one knows how many deductions/credits. Here is the 2017 Tax tables, I added a column taking into account the effect Marginal tax rates and Social Security and Medicare have on the real tax rates.
Tax Rate REAL RATE 2017 Taxable EARNED Income
1-10% 25.3 $0- $9,325
2-15% 25.3-29 $9,326 - $37,950
3-25% 29-34.7 $37,951 - $76,550
4-28% 34.7-37.6 $76,551 - $116,675
5-33% 37.6- 36.8 $116,676 - $208,350
6-35% 36.8-36.9 $208,351 - $235,350
7-39.6% 36.9- $235,351- Up
So my proposal would be everyone gets one deduction from all income for calculation of taxable incomes- $12,000.
That is your standard deduction plus your dependent deduction for one person.
No changes for married, single, more children etc.
Eliminate all deductions and credits NONE, PERIOD.
If you make 12K or less you pay no taxes you get nothing back. No more wealth redistribution.
I proposed 2 new rates which would include all income, earned, distributions, dividends, capital gains, Etc.
My proposed new rates
First $0-$45,000 of TAXABLE income = 25% (Since your first 12,000 is tax free Zero starts at 12001)
$45,000-up = 30%
Some notes:
Currently those earning 127,500 or less effectively pay 15.3% in Social Security and Medicare taxes on all earnings. (employers ahve to pay half but it is still paid)
Those earning greater than 127,500 no longer pay the 12.4% Social Security tax, they do still pay the 2.9% Medicare tax.
Notice the people in the higher tiers of rate 4 and lower tiers of rate 5 actually pay a higher effective tax rate than those earning a higher income!
Most folks earning more than 250K don't get their income from "earnings" the special rates for Capital gains, Distributions, and dividends usually lowers their effective rate.
Why don't we go to school and work on the weekends and take the week off!
Comments
And that would just been the start.
I don't believe an income based tax is fair. A consumption tax of some type seem more appropriate. There would also need to be some sort o spending cap with enforcent that the government would have to stick to. No voting for more money. No voting or laws to increase taxes.
Will never happen in my lifetime.
What do you see that would be worse?
quote:Originally posted by beneteau
I'm glad you're not in charge of changing the tax rates.
One form only and put all the damn tax services like H&R Block out of business.
Why should those who depend on taxes for subsistence not pay any taxes? No more earned income credit.
Do away with all corporate tax. This tax is just passed on to the consumer so it only penalizes consumers.
Charge renters a property tax of some kind. Property owners are penalized for owning property.
I agree with a combined SS and MC tax but it should be a percentage.
Capital gains, inheritance tax and ADValurom tax are focused on people with money and are not fair. Capital Gains should be taxed at a fixed rate like 2%, do away with death taxes and states should be bared from taxing property every year(Cars Boats ect).
The cost of things would go up but when people saw how much more they are making it would compensate for the price increase.
On the flip side a lot of people would be amazed how much is held back from their paycheck.
I think that a federal withholding is a cover up so people don't know what they pay. If you got 100% of your paycheck and then on Apr 15 had to write a check for your total tax liability there would be a revolution or the jails would be filled with tax cheats.
If they don't want to eliminate it, then at least the person should have to take into account the VA disability and SS disability in it's entirety toward the income guidelines that allow the calculation of the credit. Sure, a portion of the ss disability may already affect a few of those who get the EITC, but it going to be a very few number. VA disability is not taxable in any situation.
Example: a guy gets VA disability of $3,200/mth. Because of his VA disability, he also gets $1,400/mth of SS disability. Because he gets SS disability, each of his 3 kids get a SS disability check of $450/mth. His wife works and makes about $20k working. The earned income tax credit is only calculated on the $20k of earnings. So between the EITC and the child tax credits, they would get back approximately $9k of tax credits. For him to clear $71,400 of income, he would have to gross about $95k. With her $20k of income that makes their income $115k. And the taxpayers gives them another $6k of EITC plus all the extra freebies they can get. If it was basically any other type of income, it would go into the calculation of the EITC.
I have several people (usually single mothers) who call me each summer/early fall asking me if they need to quit work because they are afraid they will make too much and lose some of the EITC on the returns.
It is my firm belief that the EITC is the biggest tax fraud avenue ever developed.
Rant over.
However rather than discussing how much they take from us the conversation needs to be how much the corrupt to the core Congresscritters spend.
Now illegals pay taxes.