dealing with taxes, revised

OK, I've had a few months thinking about this. and I've made a few minor changes to my idea about constitutional tax reform.. below are the updates.

5-16-14 a few more tweaks

Constitutional Tax Code Rewrite

30%- tax rate on adjusted incomes over $1million

20%- tax rate on adjusted incomes of $250,001 to $1 million, corporate tax rate on US based revenue, and tax rate on dividends (currently known as the Capital Gains tax)

10%- tax rate for adjusted incomes under $250,000

2% - sales tax on goods until deficit erased, then disappears only to be seen again the year after a deficit returns
0% - tax on savings account interest (the only place money should make money and NOT get taxed)

For the purpose of determining income, the sale of stock is considered income (to be determined by the price the stock is sold at being subtracted by the price it was purchased at, if purchased) Update 5-16-14: I've had a while to think on this.. and perhaps there should be benefits to holding onto stocks for long periods of time, while also treating day trading like the crapshoot it is. The new idea is a tiered approach to capital gains taxes.. I'd prefer to have it be a 10% reduction every year (down to 0 after 10 years of ownership), but you could probably talk me into doing 20% a year (so its 0% in 5 years). but the caveat that the stock has to have been purchased has to remain


Exemption/deductions
Corporate - $20k per documented full time American worker, $10k for documented part time American worker
Personal - $10k per household member ($5k if a family member is over 18, lives in the home, and filing their own return), $2.5k per standard calendar quarter (Jan-Mar, Apr-Jun, Jul-Sep, Oct-Dec) for foster children (example: foster child lives in home from March to August. Deduction for this child would be 7.5k).
Everyone (both personal and Corporate - 25% of total charitable contributions, to be deducted AFTER tax calculated

This would be

·         Fair

·         Transparent

·         Expand the tax base enough while not overburdening the working poor/middle classes

·         Gives multi-national corporations a reason to re-invest in America on top of the rate cut(which would lower the unemployment rate, and create taxpayers at the same time)

·         Create a return every individual tax payer can use without the need for accountants/tax professional/etc.

·         Streamline the IRS, saving even more money

·         Effectively kills every loophole possible (I’m sure there are still a few in a plan like this, but nowhere near the shelters that exist today)

For the purposes of adjustment, the amendment would allow every 10 years for adjustments on the upper limits of each of the individual income brackets, and every 20 for the personal/corporate deductions and charitable deduction tax credit

how is it..

I want to be perfectly honest here.. how can the legislative branch attempt to GOVERN (what we actually ELECTED them to do by the way), when it apparently can't get out of its own effing way?

*gets on his soapbox, megaphone pointed in Senator Rand Paul's general direction with the volume turned to 200 or so*

Senator Paul, 

I understand that you've been reading a lot of your dad's plans. and they had to have sounded really good for you to co-opt them for yourself (eliminating 4 entire cabinet departments, and privatizing a 5th). Lets ignore the other uber radical right wing craziness in your budget and focus on TWO things. 

17% flat tax? as well as yet another GOP plan that eliminates the capital gains tax entirely? This is trickle down economics on half a dozen types of steroids. Great, 30 plus years of it has proven to make America wealthier overall, but the shift in how that wealth is distributed is now insanely top heavy it defies description. but lets look a little deeper into the numbers and their consequences shall we?

Just for the sake of argument, let's assume your budget somehow becomes law. Whats the first thing you think corporate America is going to do? Switch as much of the executive compensation as they can possibly get away with into stock options.  

Let me ask you this Senator.. If you are a senior executive at any kind of company that has stock options as compensation, why would you want to take a salary, when they can just sell a thousand or so shares you get as compensation a month and continue to life the high life (and never pay Uncle Sam a penny because there are no capital gains taxes)? 

On the opposite end of the spectrum however, the average family of 5 making forty grand a year combined now has a guaranteed tax bill if $6800. That's 7 thousand they AREN'T spending making the economy grow by spending money. Or have you forgotten your economics 101 classes? if the people you are looking for as consumers do not have extra money to spend, they cannot buy your goods. If they cant buy your goods, you can't make money. If you can't make money, you trim the payroll, making a bad situation worse. and its a downward spiral. All so that you can give the 'job creators' a tax break. OK, I lied, I'm going to hit on a few more points in your budget here. You've also decimated the social safety net the working poor (of which there will be many more of under your plan) need to survive by turning the social saftey net programs the working poor depend on into block grants for the states to give out, which will eventually lead to the so called 'death panels' many of the far right claim the ACA is going to do.

What state are you representing again Senator? How will your budget positively benefit the people YOU represent in the long run?

Saving the Post Office in 10 minutes or less

This is going to be a relatively short post because when it all boils down to it, its a really simple solution.

To make things clear, I can understand why the bill that was passed by Congress (designed to 'save' the postal service) was actually passed. I really do. And asking the USPS to pre-fund the retirement account is actually a good idea. The BIG, REALLY HUGE issue with it is the time frames used. Let me ask you a question.

How many businesses do you know that would be able to remain profitable when they have been mandated to pre-fund 75 years of retirement benefits in 5 years? The Big Oil companies and Apple are the only ones that come to mind for me, and even then that's a bit of a stretch.

Now on the other hand, if you were to ask the USPS to pre-fund say 10 years of benefits in those same 5 years (and set the language up in the bill so it would be up for renewal every 10 years), would the Post Office be in the mess its in now? Probably not. I suspect it would be at least breaking even or remaining a profitable entity.