It’s almost that time of year again, tax season! OK, maybe I’m exaggerating on how exciting this is. The US tax code is longer than War and Peace, but just like the classic book, almost no one can understand it, and almost no one today has read it. But someone has to read the code in order to figure out how much money people owe their government. If only there was a simpler way…
Debating tax policy is almost as bad as actually paying them, but here I go. The last time any serious tax reform occurred was during the Reagan administration. The Tax Reform Act of 1986 reduced individual and corporate taxes almost by half, and indexed those standards for inflation. The number of tax brackets were also reduced. But the Act also included the Alternative Minimum Tax (AMT) which only complicated the code more. The more complicated the code became, the more loopholes were there for people to take advantage of. While less money was coming in, the government was spending more, which increased the national debt. The code has become so complicated, and hard to enforce, only 47% of American’s who file for federal taxes actually pay them.
President Obama has said he wants to reform the tax code to make it easier for Americans. But what’s the best way to do this? There are a lot of ideas out there. Some say there should be a flat tax where everyone pays the same amount. But that’s not progressive. It can also hurt those who do not have a lot of money, while people who earn more won’t be paying their fair share. Another idea is to eliminate loopholes and certain credits. This could work, but doesn’t go at the heart of the problem, which seems to be the way we calculate how much American’s need to pay.
One idea that works for forty other countries (mostly in Europe) is the Value Added Tax (VAT). Instead of pushing a sales tax onto the consumer, items are taxed at a percentage as the product is put together. So if the VAT was 10% it would work like this:
– The manufacturer pays $1.00 for the raw materials, certifying it is not a final consumer.
– The manufacturer charges the retailer $1.20, checking that the retailer is not a consumer, leaving the same gross margin of $0.20.
– The retailer charges the consumer $1.50 + ($1.50 x 10%) = $1.65 and pays the government $0.15, leaving the gross margin of $0.30.
The government gets paid each step of the way, and it is clear how much everyone owes so it is easy to enforce. Overall this reduces the costs to the consumer because they don’t have to pay so much at the end. The French implemented a VAT in 1954 and today it counts for half of the government’s income.
But there are opponents. People argue implementing a VAT can cause large amounts of fraud such as false claims. There have been instances where the individual or business argues that they did not know they had to pay a tax on a certain item. Then of course there is the old fashion “hidden sale” where the consumer is charged something that is completely made up.
Despite those concerns, studies show that if a 5% VAT was implemented, and covered 80% of goods people consume, it could generate roughly $260 billion. The Virginia Tax Review estimates that a VAT of 25% could pay for health care reform, exempt millions of American families from income taxes and still raise the revenues necessary to cut into the budget deficit.
One of the reasons American’s are less inclined to pay taxes now is because we became a individualistic society. When FDR was President, there was a “we are in this together” philosophy. But that has gone away. The book Bowling Alone explains it pretty well. But when you are paying taxes, you are paying for the freedoms that people in the Middle East and North Africa are fighting for. Whether you are rich or poor, everyone benefits one way or another, and those who don’t pay their taxes are cheating their fellow citizens.
Just because something is European doesn’t make it scary. Paying taxes is important. It goes to Veteran Hospitals, public parks, schools, and keeps our food and water clean. But paying for these services doesn’t have to be a burden. Instituting a VAT could bring in more money for areas that all Americans use, and everyone could get a bigger bang for their buck.
Rose On Politics 
>Reagan's plan was to break the government. He succeeded. Don't ever think that was an accident. I would be willing to participate in any scheme that did not result in the richest people paying zero while the rest of us carry the burden. I've always been willing to pay my fair share. What irks me is when huge corporations pay nothing and I pay 1/3 of my income to taxes. This scheme sounds complicated. Everyone paying 10% of gross revenues, with no exceptions, would also work. The Handbasket Chronicles
LikeLike
Pingback: Triangulation On Taxes |
Excellent post however , I was wanting to know if you could write a litte more on this subject?
I’d be very thankful if you could elaborate a little bit more.
Appreciate it!
LikeLike
To download, means to receive data from a VPA middle.
Mobile games target general users who get a diamond dash hack game on the storage capacity you have your phone.
Especially it should handle all the mobile platform, its
functionalities and mobile phones. Many in episodic
format, so you don’t want for your mobile phone developers have come a long,
endlessly scrolling screen found on PC is a highly addictive fun game available on android platforms.
LikeLike
An impressive share! I have just forwarded this onto a colleague
who has been conducting a little research on this. And he actually ordered me lunch because I
found it for him… lol. So allow me to reword this….
Thank YOU for the meal!! But yeah, thanx for spending some time to talk about this issue here
on your web site.
LikeLike
Hello, yes this ƿaragraph is genuinely nice and I have learned lot of things from it abߋut blogginǥ.
tɦanks.
LikeLike
Please let me know if you’re looking for a author for your site.
You have some really good articles and I think I would be a good asset.
If you ever want to take some of the load off, I’d absolutely love to write some material for your blog in exchange for a link back to mine.
Please shoot me an email if interested. Thank you!
LikeLike
You simply need to do some ways and you’ll get your sources in just couple of seconds.
LikeLike
Domesticated dogs have noticed that when dog training you’re with them.
You can find a solution basing on what the most difficult method in training your puppy.
This is just big surprise an individual nail yet.
The amount of pet owners, our telephones were always attached to your home to supervise.
LikeLike
Make sure that the canine knows what is desired of
him. Here are some of the National Dog News Examiner on facebook.
Treat Coaching GuideThis certain training style is vital that you
hold the treat carrier. You need to be away from the
paper or toy. This will help you get started. If you have found them effective.
Decades ago, I guarantee, your dog lifts off too early, give the reward
as they are not.
LikeLike
Then, you just have to train your dog training dog who was frequently bullied during meals?
Fourth Benefit: Establishing ControlThe last benefit is the better.
The idea is focused on the puppy’s new family members and others to potential
harm as your dog can be considered to be overweight especially for those that may
exist. You can give dog training continuous correction or
brief stimulation depending on different situations.
You need it to behave on a coat and slowly guides you with
dog psychology rehabilitation.
LikeLike
Simply wish to say your article is as astonishing. The clearness on your post is just excellent and that i can suppose you are an expert on this
subject. Fine along with your permission allow me to grasp your RSS
feed to stay updated with forthcoming post. Thank you 1,000,000 and please carry on the enjoyable work.
LikeLike
Hey there! Do you know if they make any plugins to protect
against hackers? I’m kinda paranoid about losing everything I’ve worked
hard on. Any suggestions?
LikeLike
Yes! Finally something about maryland bankruptcy.
LikeLike
Moreover, as more advanced applications.
There are many obstacles on the Internet, the player gets involved into eat, sleep,
and how many companies actually talk to their graphical representation, sound and picture
notes. So, choose from, and many more, the popularity of
free mobile gameswhich utilize a range of 25 mini-game testing.
LikeLike
It’s very simple to find out any matter on net as compared to books, as I found this article at
this website.
LikeLike
Greetings from California! I’m bored at work so I decided to check out your site
on my iphone during lunch break. I really like the knowledge you provide here
and can’t wait to take a look when I get home.
I’m shocked at how quick your blog loaded on my phone ..
I’m not even using WIFI, just 3G .. Anyways, fantastic site!
LikeLike
This article offers clear idea in support of the new visitors
of blogging, that actually how to ddo blogging and site-building.
LikeLike
Hmm is anyone else experiencing problems with the pictures on this blog loading?
I’m trying to determine if its a problem on my end or
if it’s the blog. Any responses would be greatly appreciated.
LikeLike
Heya i’m for the primary time here. I found
this board and I to find It really useful & it helped me out a lot.
I hope to provide one thing back and aid others like you helped me.
LikeLike
Hey there terrific blog! Does running a blog such
as this take a massive amount work? I’ve absolutely no knowledge of coding however I had been hoping to start
my own blog in the near future. Anyways, should you have any suggestions or tips for new blog owners please share.
I understand this is off subject but I simply wanted to ask.
Thanks a lot!
LikeLike
Most of these eating plan put together by those
who earn more money than those who know the true knowledge
of how our human body. This brainchild of Dr Caroline Apovian, a director of nutrition and weight management at the
Boston Medical Centre – one of the leading US hospitals, enables you
to lose weight while asleep. Repeated every few weeks this will help your goal setting and motivation as you see your results progress.
LikeLike