Common Sense Leadership Requires A Simple Tax System

I would like to continue to outline some of the steps we can take to restore Common Sense Leadership to our nation.  Common sense and simplicity in our tax system is one of those steps that we must demand from our elected representatives.  Not even the Internal Revenue Service (IRS) can uniformly provide information or interpretation of the tax code.  Taxing a nation is not a complex problem requiring a huge amount of effort to manage, it is just a simple issue that requires the knowledge of 4th grade math.

The personal income tax of the United States of America, has been one of the areas of government most victimized by career politicians.  They have used the tax code as a source of political favors to bestow boons to their most ardent supporters.  This situation has been taken advantage of by members of both parties; so there is plenty of blame to spread around.  But, I do not want to fix blame; I just want the problem fixed. 

So here is my solution to the personal income tax.  Each person will have a personal deduction of $12,000 ($1,000/month).  This deduction will be subtracted from total income (earned and unearned); and the remainder will be taxed at fifteen percent (15%).  If your total income is less than the personal deduction; you will be taxed at the minimum tax rate of five percent (5%) of your total income.  The only other deduction is for charitable/religious contributions.  This deduction is simple to apply.  Contributions are subtracted from the total income after the personal deduction is applied.  However, it cannot be used to reduce your tax burden below the minimum tax rate.  Now, was that so hard; this tax system would allow everyone to file their own taxes, the form would be about the size of a half sheet of paper including instructions, and a huge amount of lost productivity will be returned to the American People.

My version of the personal income tax would be very easy to administer and enforce.  No massive tax code to navigate or fear, no tax shelters available only for a select group; only a system where everyone shares the burden of supporting the system our founding fathers envisioned.  Just imagine a country where a tax evasion case goes something like this:  How much money did you make?  How many persons in the household?  Any donations to church or charity?  Take that amount and multiply times the tax rate.  How much is that?  Did you pay less than that amount?  Pay what you owe.  Case dismissed.

The corporate tax is just as simple to fix.  The standard corporate tax rate shall be ten percent (10%).
The only deduction will be for reinvestment (research, equipment, etc.), this shall not exceed one half of taxes, ie. five percent (5%).  If you dont reinvest in your business, you pay 10%; if you reinvest in your business, you pay at least 5%.  Everyone pays, no loopholes, no incentives, no zero tax bills for companies that enjoy the benefits of our society.

Will you help me share this simple plan?  Share this blog, comment, and most of all contact your elected representatives and tell them to solve our tax problems.  I look forward to hearing from you.