- Posted June 9, 2012 by
This iReport is part of an assignment:
Should the rich pay more taxes?
Tax Code Is Inherently Unfair
The question has been raised as to if the US tax code as currently written is unfair. I believe that it is inherently unfair.
No matter all the talk about people paying their "fair" share the argument is by design unfair. The very nature of our current progressive tax code was devised to be unfair.
You cannot have a tax code on parity when individuals are taxed on a sliding scale based on income. This at creation implements an unfair system where some pay a higher percentage of income in taxes while others pay a lower percentage.
The only option to provide viability to the nation's needs for revenue and provide for a more equitable system can come about only by a full revision of the current tax code and simplification of the system.
Republicans, Democrats, independents, all seem to agree that our current tax structure is not working adequately. Most Americans point to the tax breaks, those deductions that seem to be without logic or sense which permeate the tax code for both individuals and for businesses as the most detrimental to the current system.
The questions that arise when addressing tax code reform are in determining which deductions, loopholes to close and which should be retained.
The inability to find a consensus continues to elude Congress and has everyone from President Barack Obama to the presumptive Republican nominee Mitt Romney searching for a solution.
Currently there are 4 options which our elected representatives could pursue in reforming the tax code:
1. A National Sales Tax (variations: Value Added Tax or Consumption Tax)
2. A Flat Tax without deductions of any kind
3. A Flat Tax with selected, essential deductions
4. The Present Tax Code revised eliminating unnecessary, unwarranted deductions and keeping only the most essential.
Naturally there are other options and variables, but these are the 4 I see as the most viable.
#1 - With a national sales tax, every person in the US of A, no matter, gender, age, citizenship, resident, guest, economic income level would all pay for every product and service purchased a percentage such as 10 cents on every dollar. This would mean that no one would not pay taxes to the federal government. No one would be exempt from contributing to the national good. Determining what percentage on the dollar should be paid that would provide the necessary funds needed to effectively operate the government would be the most difficult wrangling with determining this type of tax. However, all would pay and none would be exempt.
#2 - With a flat tax with no deductions is another option. With a flat tax rate every American would pay a certain percentage of his or her income, whether it be as an individual or as a business. There are 2 drawbacks to this method - determining an appropriate rate which most likely would be somewhere between 15-30% to meet the national budget and debt as well as that in effect without deductions the lowest economic income earners would see a dramatic rise in their tax burden.
#3 - With a flat tax with selected, essential deductions for both individuals and businesses could more level and make the transition easier for those at the lowest economic level and for business startups and expansions. Again one of the drawbacks would be determining the correct, appropriate percentage rate as well making sure that deductions for startups and expansion for business are limited in term and not remain in place forever.
#4 - Overhauling the present tax code and eliminating all, but essential deductions for individuals and businesses would require our elected officials to go through a code that is now longer than all the combined works of William Shakespere. This method would provide for those on the lowest economic level and for startups and expansions in business. For business these deductions should be time limited.
There are as I said a number of variations on these 4. The question is which candidate and which party is willing to address our broken tax code to make it efficient and capable of providing not just for necessary revenue, but the ability to pay down the national debt to a manageable level.
We as voters must decide the correct pathway and in order to make that decision we must delve into where Democrats and Republicans stand on these 4 tax code revision options. This election may very well shape the course of the nation much farther than just 4 years and perhaps to the end of the century.
From the Cornfield, is the tax code fair? Absolutely not!
But it can be made more equitable if lawmakers are willing to commit to the task and perform the necessary surgery which would provide parity for all.