We're heading into March, that month where everyone starts to realize they need to do that annual chore that we all hate. No, not spring cleaning. It's the annual financial paper round up, commonly referred to as tax prep. As with spring cleaning, we tend to put it off, find and make excuses to postpone the inevitable. It's got to get done and a deadline approaches.
Part of the ritual is to look for deductions, anything we can even remotely justify as a write-off no matter how tenuous the link may be to our reality. Anything, and I mean anything to lower our reported income to limit the damage inflicted upon us by the IRS. Hey, we have to pay the piper, but that doesn't mean it isn't painful.
Trying to make things easier and even more fair is the House Ways and Means Committee, chaired by Chairman Dave Camp (R-Mich.). Yesterday the Republican-led committee released the framework of a complete overhaul of our tax laws to make this process easier. When the dust settled, we got 1000 pages of reform.
Even before this one grand of pages were released, the GOP party came out against it. They obviously hadn't read it because it hasn't been published but they knew they were against it. And the Democrats took a similar stand because "rumors" were that it would touch the third rail, figuratively speaking. It would cap the write-off for mortgage payment interest paid. That's generally the single largest write-off for individuals.
So the bill went from let's look-and-see to DOA. Actually DBA - dead before arrival.
I've got an alternative. Something so easy it's sure to be defeated, but let me offer it anyway. It's the old flat tax plan. A ten percent tax on all earnings. It can even be taken right out of your paycheck. And wait until you see your weekly take-home net received go up. You'll be smiling. Everyone pays the same percent as everyone else, rich and poor.
Oh, and did I add, thanks to Citizen's United where personhood has been blessed upon corporations, they too lose all of their "business related" write-offs. If they're people too, then they get no favored treatment. A straight 10% of revenues received are taxed. If some say that's unfair, a millionaire would be paying more than a pauper, it's all in the way you look at it. Right now a millionaire gets much more favored treatment - they get more write-offs. So that argument falls flat. This doesn't hurt incentive as the more you make, the more you net. And no more phony-baloney write-offs for corporate jets, holiday outings that are really vacations and no incentive to pay executives huge bonuses to lower the tax burdens for companies. They no longer get special treatment. They're people like us. And places like Verizon and GE who paid no taxes would be contributing 10% off the top.
Now wouldn't that increase our tax coffers! You want roads, bridges, modernized energy grids and more military spending. We'll have the funds to to do that and more. And think of all the trees we're saving that we use to make paper for the tax returns. Even our ecological systems will be improved by a simple one page form.
The people whom this hurts most are the accountants and IRS employees. We won't need as many. My answer to that is let them re-train. Isn't that what the GOP has been telling all of those out of work employees whose jobs the Republicans shipped overseas? Retrain the CPAs. Teach them new skills. And if that's good for the "factory or lower skilled workers" today, why not the accountants and tax men for tomorrow?
Look, collecting tax revenue doesn't have to be hard or complicated. And think of all the cheats and phony write-offs that we won't be shouldering. We'll actually be getting more revenue and might even be able to lower the tax rate from 10% to something even smaller.
Confession: This idea isn't just mine. It's been around for years. But to make my point more valid, even the most conservative of right wing conservative causes agrees: The Heritage Foundation.
The current tax system discourages saving. It discourages investment. It discourages entrepreneurship. It causes decision makers to misallocate the nation’s resources, limiting productivity gains, wage gains, and the nation’s overall level of international competitiveness. And, it is far, far too complicated. The New Flat Tax is the remedy. It replaces every major tax collected by the federal government. For non-seniors, it is as easy as one, two, three—one rate, two credits, three deductions. For seniors on Medicare, one of the two credits—for health insurance—is replaced by an extra deduction. The New Flat Tax is simple, revenue-neutral, and will allow America to achieve its full economic potential.