“The best way to teach your kids about taxes it to eat 30% of their ice cream.”
– Unknown
No one likes taxes. In fact, our nation had a problem with taxation without representation in the Parliament and King’s court in England. That led to one of the principal pillars of the Revolutionary War as the United States declared independence from the English crown. Quite a bit of blood was shed over the issues, such as taxes. It is important that we understand that taxation to the American people means representation. The funds that come from the people must be for the betterment of our nation. That is the fair and just return that the American people receive for their tax dollars. This is true no matter the amount you tax people. The trade has to be equitable.
Our current tax code is confusing and full of loopholes that were initially designed to bring a peace between the least of these and most of these; dependent on if you are for big government or small. While I tend to be a proponent of small government, the issue of taxation does not encompass those ideals. You the American people have elected officials to uphold ideals and those ideals require funding. That funding is taxation plain and simple.
I do advocate for a balanced budget. Which means you may elect people to carry out new policies, but those policies can should only be enacted if there is money. I am a fierce opponent to using debt to accomplish such policies. It is just as wrong to legislate through debt as it is to legislate through executive orders. We must operate within our means. I propose the following tax reform:
Individual Taxes
A Flat Tax
1. Every American will pay their fair share percentage wise. We can not boast about being a nation of equality if we are willing to take more from the rich in order to pay for the poor. And we cannot boast about equality when we expect our poor to struggle in the clutches of government care. Neither is fair, neither is equality.
A flat percentage tax is designed to give equality without a number. Equality of taxation can be viewed in two ways a flat percentage or a flat amount, based on the current 6 Trillion dollar budget proposed by President Biden a flat tax would of every American over the age of 18 (209,128,094) would need to either pay $28,690.55 to be equitable or alternatively the government could put in a flat percentage of 30.64%! Of course this is outrageous and why we do not support a flat tax under the current budgetary contraints. Under the current administration the amount of income from taxes is estimated to be north of 4 Trillion dollars. This would place the budget with an excess 2 trillion dollars that must be added to the debt or come from surplus pocket accounts within government. Why? Because at only 4 trillion dollars the budget is not balanced.
Budget
2. The budget must be balanced with an income to match the expenditures. The US populace brought in an estimated 19.6 Trillion dollars in 2020. At a flat percentage of 10% the current budget would have to be slashed by 66% (ish) to balance. This would be accomplished by removing the bloat in the budget, which I do not cover in this article. I will provide a link to a sample budget later as the overall policy becomes clear.
Loopholes
3. Eliminate loopholes. You are an American? Great! You pay the designated amount that all Americans who are required to pay taxes pay. You are an American Business? Great! You pay the designated amount that all Businesses have to pay (See below). We will encourage growth not through tax breaks, but economic empowerment.
Excise, Gifts, and Estate
4. Eliminate federal excise taxes, gift taxes, and estate taxes. If taxes were already paid to the federal government, we are not going to double tax you. The point is to put more money into the economy not steal it way. This should create more economic opportunity! If we create opportunity, we can create more income. A simple way to look at this would be: the more money you make, the more money the government makes. The more jobs that are created, the more streams of income the government has at its disposal to fund more budget or pay down more debt.
Business Tax
Standard Business/Corporation Tax
1. All business will begin at a minimum flat tax bracket on their profit, there will be no tax deductions below this flat percentage of 15%. This tax will be imposed on an business that operates on or in US Soil. That’s right, if you operate in the US and are a foreign company you will have to pay to be here, just like everyone else. This is about equality. This will form a protection for consumers and producers.
Foreign Operation Tax
2. Any business that operates a foreign headquarters, factory, or employee will have an additional flat percentage added on top of their Standard Business Tax, this will be an additional 10% (totaling 25%). However, this tax can be offset by creating jobs within the United States. This tax will only be offset if the number of jobs created in the United States is equal or in excess to the amount of foreign based jobs. This tax is designed to bolster and offset any economic loss that a company might try to circumvent by relocating from US soil or an attempt to offshore jobs. This tax acts as a form of protectionism for the US Economy.
Foreign Supply Tax
3. This additional tax is designed to bolster the local economy and industries. If you are a company that is buying your supplies to build a product and then sell to or in the United States you will receive an additional flat tax of 5% . If you buy your supplies from United States businesses to build your product this tax will not apply. This tax acts as form of industrial policy so that industrial tariffs wont be necessary.
All told your business could be taxed anywhere from 15-30% of your final profit based upon your business’ needs to operate.