Fundamentally, I believe that America’s tax code is an outdated archaic mess, having grown to become an unwieldy and ineffective bureaucratic institution.
The code is needlessly complex because of deductions, credits, exceptions, date enablers and loopholes. As a result, the tax code contributes to our government’s huge size as a result of this burden of administering its complexity and its subsequent revisions and enforcement (tax courts, attorneys, judgments, liens, garnishments, etc.).
Resolving the tax code issue would actually have a very positive effect on our deficit by lowering the Treasury’s operating overhead significantly, eliminating the massive special interest credits/expense and increasing the revenue inflow.
President Ronald Reagan recognized the need and validity of this approach back in 1981 when he proposed the Economic Recovery Tax Act (ERTA), the Reagan tax cuts, a 25 percent across-the-board decrease in personal marginal tax rates. Even with the then-massive Cold War military expense buildup and the subsequent dilution of the act as it cleared, the Reagan tax cuts showed that reducing excessive tax rates stimulates economic growth, reduces tax evasion and tax avoidance schemes, and can actually increase tax revenues from the rich.
We absolutely need tax reform that is fair, simplified, flat, low and easy to understand and administer. Incorporating elements of Herman Cain’s more aggressive 9-9-9 plan as well as the proposed flat tax plan is pivotal to reforming a tax system that simply no longer works.
As to the misguided notion that 99 percent of Americans support 1 percent of the rich in tax payments, the truth can be found by Googling “Who pays federal income tax?” Click here for a link to the actual stats from the National Taxpayers Union: The top 1 percent of the wealthiest income earners pay 38 percent of U.S. tax revenues, the top 5 percent pay 59 percent, the top 10 percent pay 70 percent, the top 25 percent pay 86 percent, the top 50 percent pay 97.3 percent and the bottom 50 percent pay 2.7 percent of all federal tax revenues.
The largest share of the tax burden is shouldered by the top 5 percent of the wealthiest 1 percent of Americans who are paying well more than half of the federal income tax revenues, while the poor pay virtually nothing in federal income taxes. If you take a further investigative look it becomes clear that once federal spending is taken into consideration, those “1 percent of wealthiest Americans” are paying far vastly more into government and consuming virtually nothing, while the bottom 50 percent receive the largest amounts of that spending and paying virtually no federal tax. Those are the facts.
We need to collect a flat tax from all U.S. citizens above the poverty line, eliminating income taxes for those below the poverty line, drastically reduce entitlements and entitlement programs, lower the corporate tax rate so that the United States can regain its competitiveness in the global markets, while reducing our unemployment. We currently outspend on foreign military activities more than the actual net income of all U.S. corporations combined. Let’s continue to invest heavily in our country’s security, our educational system, shoring up our borders, deporting illegal aliens involved in criminal activities, drastically cutting entitlements, while withdrawing our military occupation of other countries.
We can then begin enjoying a more prosperous era of economic growth by a leading world power, whoever our next president may be.