Editor's Note: Be sure to catch Fareed Zakaria GPS on CNN every Sunday at 10am and 1pm ET.
By Fareed Zakaria, CNN
We’re going to hear a lot of polarized rhetoric over the next few months. The Republicans and Democrats will seem to disagree about everything. But there is one huge and important area where there is a possibility - a possibility - of bipartisan action and that’s tax reform.
Most Americans - Republicans and Democrats - dislike the tax code. They’re right to do so. America has what is arguably the world’s most complex tax code. The federal code plus IRS rulings is now 70,000 pages long. The code itself is 16,000 pages. The statist French, for example, have a tax code of only 1,909 pages - only 12% as long as ours. And then there are countries like Russia, the Czech Republic, Estonia that have innovated and moved to a flat tax, with considerable success.
You have to understand, complexity equals corruption.
When John McCain was still a raging reformer, he used to point out that the tax code was the foundation for the corruption of American politics. Special interests pay politicians vast amounts of cash for their campaigns and in return they get favorable exemptions, credits or loopholes in the tax code.
In other countries this sort of bribery takes place underneath bridges and with cash in brown envelopes. In America it is institutionalized and legal but it is the same thing: Cash to politicians in return for favorable treatment from the government.
The U.S. tax system is not simply corrupt, it is corrupt in a deceptive manner that has degraded the entire system of American government. Congress is able to funnel vast sums of money in perpetuity to its favored funders through the tax code without anyone realizing it.
For those who despair at the role of money in politics, the simplest way to get the corruption out of Washington is to remove the prize that members of Congress give away - preferential tax treatment. A flatter tax code with almost no exemptions does that.
The simplest fix to our tax code would be would be to lower the income tax dramatically, lower the corporate tax, and instead raise revenues through a national sales tax, or a value-added tax (VAT).
The U.S. is the only rich country in the world without a national sales tax. Germany has one at 19%, Britain at 20%, Korea at 10%.
What’s the appeal of a consumption tax?
First, it is efficient. Most studies, including one by the Internal Revenue Service (IRS), suggest that the federal government loses several hundred billion dollars a year to tax fraud. This is much tougher to pull off with a consumption tax. Second, it provides the government with a more stable form of revenue than income taxes. Income taxes fluctuate greatly between boom and bust years. Third, American’s consume too much, often using credit and leverage to do so. A consumption tax would moderate this behavior. Government will always get less of a behavior it taxes and more of what it subsidies.
Ironically, the heavy reliance on income taxes makes the American system more progressive than those in Europe. The federal government gets about 43% of its total tax revenue from taxes on individual incomes and profits, compared with only 29% in Germany and 22% in France. The balance for France and Germany comes from the VAT, which is highly regressive. One recent OECD study showed that the top ten percent in America pay a larger share of total taxes, 45.1%, than do the top ten percent in any of the 24 countries examined. In Germany they pay 31% of the taxes, in France 28%.
But the best thing about tax reform is that it kills corruption. So if you ask me what kind of tax code I am in favor of, I am in favor of almost any new tax code that fulfils one requirement: It should fit on two pages.
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Although I agree that the tax code should be simplified to avoid corruption, why should it be simplified in a regressive manner? When people like Mitt Romney are paying 15% effective taxes, I hardly think they should be rewarded by being incentivized to take their money out of investments.
90% of Americans pay between 0% – 15% effective tax rate.
Don't go throwing up facts to people like Jose...
Be sure to add in Fuel (Gasoline), Social Security/Medicare (Payroll Taxes), excise taxes (e.g. tobacco and alcohol), estate, etc. taxes. Almost no one pays 0%, and even the most frugal working poor pay Payroll Taxes.
I can always tell when someone doesn't pay thier own taxes, Everyone pays more than 15% taxes. The payroll tax is more than that with your part and the employers part. The Employers part you pay too, if you didn't earn it they couldn't pay it. Hidden tax so your politictions can lie to you.
0% tax?... unless you're retired and you never buy anything (including food), have no property tax, pretty much just stay home and turn into skin and bones. You pay taxes.
Don't know the exact percentages, but somewhere close to 50% end up not paying taxes. The real shame is there are people out there that do not have a job, pay no income tax in, however file their taxes and get refunds. Too many people in this country expect handouts. I work in a grocery store and watch people with food stamps buy better food (steaks, ground round, name brand food), then use their cash to buy cigerates, alcohol, etc. Some, not all eat better than working class people. Food stamps should be treated more like WIC, only certain items are eligible.
Pay attention, people. The subject is Federal Income Tax (FIT). Yes, almost 90% of income earners pay less than Mittens and Buffett. Yes, almost 50% pay nothing. Yes, those who pay FIT may be paying other taxes, but that is irrelevant as paying other taxes does not absolve one from paying FIT any more than paying one's electric bill does not absolve one from paying the water bill.
Zacharia FINALLY gets something right- a consumption (sales) tax is the most fair system and a two page code will tend to keep our national politicians at least somewhat honest. Where Zacharia is wrong is his implication that income tax and VAT could co-exist but, just like what happened in Europe, having both will only lead to higher rates on both.
Another benefit of consumption tax replacing current US FIT is that the complete waste of productivity in calculating FIT is eliminated, which results in that effort being focussed on more productive endevours.
It's actually about 0-12%.
http://www.taxfoundation.org/news/show/250.html#table8
As for people not paying 0%. Think of it this way. Many people pay a negative tax rate on individual income. Here is an estimate using all sources of federal tax revenue to determine % contribution to ALL federal taxes. (Note, this does exclude state taxes).
http://www.taxpolicycenter.org/numbers/displayatab.cfm?Docid=2435&DocTypeID=2
Note the estimate for the bottom quintile (bot 20%) is 0.0%.
Oops, meant to say, does NOT include state taxes.
Clarification to my previous post- Almost 90% of income earner pay a lower income tax RATE than either Mittens of Buffett.
where did you pull these number from, most I have seen have 66% pay less than a 15% in federal taxes...but we need to get rid of all these loopholes and just set a set rate
some say noone pays zero tax. UHM not really. Look at EIC. Some folks pay ZERO income tax and get a check of $3500 a month and get food stamps and get free medical and get subsidized housing and .....
Oh please, marginal tax rate of 90% on any income earned over 1 million dollars, UNLESS the money is invested into productive investments. IE NOT Financial speculation. If the rich will not invest their money in the economy then the government must with increased taxes on those with so much they just sit on it, literally.
It's true that flat tax has been beneficial to the new democracies in Eastern Europe. It worked well as they didn't have any tax code before. Flat tax attracts foreign investments and helps their domestic business thrive.
Young people who are too lazy to learn how to work (or to even work) should not be receiving government benefits for doing so. They should no be getting thousands of dollars when they did not even pay any taxes. This needs to stop. Make them a part of America, not an overhead.
The unemployed getting unemployment checks (thanks to Reagan) pay up to 25%. How is that fair?
We already pay on average 9% sales tax (state wise) and now you want to add another 15% to that? You really think removing the income tax will balance that out? LOL Have you not met any American?
This is an important discussion.. But people always seem to get wrapped up in the "Who isn't paying, which income group is cheating the system," tangent. Really, enough. That conversation leads to nothing but finger pointing, and is a diversion from problem solving.
Tax reform shouldn't be about "going after this group," which seems to be all Democrats/Republicans do regarding this discussion. Democrats will highlight the loopholes and credits specifically provided to the wealthiest and corporations resulting from lobbying in DC, while Republicans will mumble about low income workers who aren't owing income tax in April, or receive FIC instead.
Like Zakaria said, it the solution is a bipartisan one, which is to simply simplify.
BTW, I wouldn't even bother with 'statistics' on taxes.. The system is so complex and tangled that heritage, taxfoundation, government PR agencies, etc all 'cherry pick' individual tax elements and broadcast them to push reasoning for one party's agenda or another.
Why does not a citizen show the good that our taxes do in our societies, versus of only emphasising the negatives.???
Only illegals pay 0% tax. FICA is 6.4% on all income up to 100,000 per year.
and 90% of facts people post on a cnn forum are lies
That's the whole point – with 70,000 pages of rules & regulations, anyone with enough money/time/brainpower can find a way to "lower their tax burden" and effectively pay less tax. Going to a flat income tax means everyone pays "their fair share" – if it's 10%, then everyone pays 10%. Adding in the VAT means that I get to keep most of what I make – and I mostly pay taxes on what I SPEND...which is my CHOICE. The VAT doesn't really cover things like food and other necessities; but all the other "stuff" – so if I choose to buy it, then I pay the tax. If I want to sit in a tent on my land and not spend any money, then I don't pay as much in taxes. It ultimately puts the responsibility and burden on the people spending money. It's a very libertarian idea – that people have the right and freedom to decide when and how they pay taxes...through their spending choices.
Simplify and lower the rate for everyone, while increasing revenues - http://thetransactiontax.org
There is nothing fair about a transaction tax period. It's an absolute attempt to steel peoples savings, their business and their grocery check. For example, seniors that have saved 50 thousand over a lifetime and can't afford to gamble in the stock would be taxed when they buy that less than one percent CD and then again when they cashed it then again when they made a deposit into their checking account and again when they bought another CD for 45 thousand and then again and again. Stop the steeling and propose some fair and honest system.
Art,
I think your example can be simply fixed. A CD is, in reality a loan, designed so that you receive a certain return for not using your money for a period of time. A bank could structure a holding account where you allocate a certain percentage of your deposit as liquid (checking/debit), semi-liquid (savings), and locked (CD), each would have a rate of return and you would be taxed on the interest earned. So your $50K of locked funds could earn 1%, or $500 in interest and be taxed at 0.35% or $1.75 when the $500 was deposited to your account. I think moving allocations around in your account should not amount to a transaction.
The Code dealing with personal 1040 tax returns is simple and concise. Where all the complexities come in are with businesses, especially very large global businesses who have had over the last 50 years packed the Code with some much special interest legislation it has become a behemouth.
Jose – These fools that are commenting on your post don't understand what regressive taxation is. Fareed is suggesting a 20% national sales tax. These people don't understand that the lower your income, the more you'll pay in sales tax, proportionally. It's sad that these people are so mislead by partisan politics.
Also, Fareed is claiming that the top 1% in the USA pay more in taxes compared to European countries. If that were true, there would be no reason to remain in the USA. Fareed is asking for a flat tax, and using a national sales tax. He talks with his pass the butter voice, but in the end he sound like any other believer in neoliberalism. As it stands, capital gains are not going to be taxed at this going rate. And the 1%-ers are making the lion's share of their income through investments. They don't pay their fair share in taxes, and they reap the benefits of a stable nation to do business in, then they don't create new jobs.
I say, let them take their money, and their corporations to Europe. But then forbid them from doing business in the USA. Other businesses will take their place, and they'll survive paying a reasonable tax. Take Romney for example, I don't think he should pay 35% in taxes, but he shouldn't be paying 13% either.
You're not understanding what a consumption tax entails. Essentials (food, medicine, etc) are typically not taxed at all, so someone living hand-to-mouth still pay very little, if anything, in Federal Sales tax.
Also, nothing could be further from the truth than your claim that "(the 1%) don't pay their fair share in taxes". The top 1%'s average effective tax rate is FAR higher than than that of any other income group below that. This is an inescapable fact. There is absolutely no data to support your claim. None.
Proportionally, 20% is...20%. If you exempt essentials such as food and medicine, then poorer people would pay a lower effective tax rate.
BLA BLA BLA you sound to complicated, CONSUMPTION TAX IS THE WAY TO Go.and as far as the corporate investing and manufacturing product outside U.S.A. there product should be ban for sale in the usa. keep it simple and criminalize tax evasion....for real!
Mike Rotchitches thats exactly what I was thinking to. People think that think this propose idea of using a flat tax is free, or that this consumption tax would create a level playing field is crazy. It's the middle and lower class consumers that drive the economy, not the 1% of also 340,000,000 people. the mid and lower class people consume more and by more new products all that this tax would do is make it hard on the everyday person to buy common goods and needs.
http://www.fairtax.org
Eliminate IRS and income tax.
The "Fair Tax" sales tax is a very interesting proposal. Please read and endorse.
http://www.fairtax.org/site/PageServer?pagename=HowFairTaxWorks
Dan, I would suggest you read the actual fairtax legislation, rather than the propaganda from their site. The legislation as has been proposed several times actually exempts business; corporations and the 'capital gains crowd' from nearly ALL taxes. Several financial experts have pointed out that the way the legislation is written, the adjusted rate would need to be in excess of 50%. BTW, the 'fairtax', which should more appropriately be called the FRAUDTAX, does not exempt groceries.
TNPatriot's criticism of the Fair Tax mentions that the Fair Tax taxes groceries, but conveniently excludes a discussion of the prebate; since he did not mention this, and yet is suggesting reading the proposal, I can only assume that TNPatriot has read it, but neglected it intentionally. That's rather deceptive.
I've always had a problem with the name "fair tax." It's a bit presumptious. The consumption tax/sales tax may be your opinion of what's fair, but that doesn't necessarily make it right. Call it what it is and let the people decide.
if you eliminate the IRS who is going to collect your "fair tax"??
http://www.fairtax.org/site/PageServer?pagename=HowFairTaxWorks
The FairTax is a national sales tax that treats every person equally and allows American businesses to thrive, while generating the same tax revenue as the current three-million-word-plus word tax code. Under the FairTax, every person living in the United States pays a 23% national sales tax on purchases of new goods and services. This rate is equal to the lowest current income tax bracket (15%) combined with employee payroll taxes (7.65%), both of which will be eliminated.
How do you square this with Aces Full comment that 90% of americans pay less than 15%? Who has the right set of facts?
The 1% pay a disproportionate amount of taxes – which is fine with me. However, it bothers me that almost half the United States pays ZERO taxes. That is wrong – all of us, no matter how poor, can afford a few bucks. Everyone needs to have skin in the game.
Oh shove a sock in it. Even the poorest pay social security and medicare from the first dollar of income. They pay sales taxes. Property taxes either directly or through higher rents charged by their landlord. Gas taxes. Sin taxes (alcohol, tobacco).
When the income tax was first introduced only the very wealthiest owed anything at all. And there weren't any Glenn Beck-trained sheeple to bleat out brainless nonsense like "skin in the game."
@ MC- Paying one tax for one purpose does not absolve someone from paying another tax for another purpose any more than paying the electric bill does not absolve someone from paying their water bill. Property, sales and sin taxes aren't even Federal taxes and don't have a single thing to do with the Federal Gov't. The Federal gas tax goes toward paying a small portion of road mantenence, not for Federal Gov't. Social Security and Medicare payments are to cover a specific benefit that the poor benefit from far more than the wealthy. (If you think the poor proportionately pay too much for SS, I would stand shoulder-to-shoulder with you to eliminate SS entirely so this baseless arguement is eliminated entirely.)
Federal Gov't needs to be paid for and everyone needs to pay their fair share. Right now, almost half of income earners (who are also voters) are not paying anything, much less paying their fair share. If you can't grasp that concept, then tell your water company that you don't need to pay the water bill because you already paid your electric bill and see where that gets you.
Bann – I agree 100%. EITC has turned into a massive giveaway.
You are right,that is why the best form of tax is CONSUMPTION TAX. and criminalize tax evasion for real...
Income tax, when it was first placed in law, was indeed meant to target larger income individuals (someone above already stated this). Look at the history of the income tax and you'll find that the percentage of what specific income groups pay has been consistent throughout it's existence.
And yes, paying one form of tax does exempt you from another if it conforms to state/federal categories. Have an issue with this than you should be upset with certain groups avoiding payroll just as much as the other side of the fence avoiding income tax. Income tax is not the only federal revenue. It accounts roughly for 38-40% of Government revenue. Payroll tax accounts to another 28-33%. Some groups, most their taxes pour into income, others, like lower income, hourly pay (weekly,biweekly paychecks) pay into payroll (as do their employers, whose pay for staff is determined by subtraction of what they pay in payroll as an employer).
This "target one group who are cheating the system" rhetoric is getting old.. It's fabrication generated from partisan PR stooges that identify and cherry pick info for one party's agenda or another. But ultimately, every income group feels like they're getting socked by the Man. No one's 'living the gravy train' as your partisan pundits want you to believe. They just want to incite to further extremist ends.
everyone pays some from of taxes,and I think the common mistake here is that everyone mixes up income tax with all the other forms of taxes out there. Almost everyone pays in on sales taxes, or property taxes. Remember that only the first 300,000 of your earned income a year is taxed. After that it's not taxed, so how many people do you know make 300,000 by themselves a year, let alone how many people do you know make six figures a year by themselves. This is a joke no body looks up any of the facts and then if they do they push only one side of the argument out there. However, I love how so many people think that this is just an easy situation to fix, if it was so easy don't you think everybody would catch on and have the same concerns and not be so divided on this issue? I would love to know how many of the people on this forum have ever taken a class in college. Let alone any kind of business, political science, financial math or economics. If they have I'm sure they are the ones with the more in depth post; because these class aren't easy and require you to have a true understanding of how thing in this GOLBAL ECONOMY work. Please, people don't push ideology. Research facts and info form non basis sources that don't come form .com's sites.
It's quite easy to avoid the regressive effect of a flat tax. You simply exempt the first X dollars from taxation. Most flat tax plans do have such a provision.
Or..... you can exempt necessaries like groceries and gas...
Even if Mitt Romney only pays 15% effective taxes, I promise you that his 15% is still a larger amount than my 25%. My 25% amounts to the small 5 figures. His 15% is in the low 7s.
And you think its right to pay 10% more in taxes?
Jose, This is populist rant. You must remember that Romney already paid taxes on his fortune. He is paying taxes again on that money. Now he is only paying taxes on the passive income.
MItt Romney pays 15% to the fed... what about the state? What about in property taxes? A ridiculous percentage of americans pay somewhere in the neighborhood of 40% in one form of taxes or another. The federal tax code is a joke.
One area that needs to be changed is do away with being able to charge off mortgage interest on second home. That will improve the lack of taxes. Second, get tough on these free loaders.
Tax and job policy should consider the effect on the American "circular flow of spending " ! It seems your jobs policy and tax policies contradict each other ! A flat tax will decrease domestic jobs of all kinds period !
IF you look at the CFS in 1968 you will find import taxes and quotas in place that generated tax revenues and limited debt owed to foreigners! Restoration of import taxes would bring American manufactuing back and the related jobs and tax base !
If you look at the laws in place under Truman and IKE you will find gifts had to be given to the US Treausury ! All outside income should be given to the Treasury now !
Your policies will further destoy the US !
This is why foreigners are not allowed to be President !
One problem with VAT taxes. America is run now (whether we like it or not) on consumerism. If you increase the cost of goods wouldn't that drag down the consumption of some goods?
Perhaps I'm ovethinking it...
A flat tax makes a lot of sense to me. I would think it would be easier to create a budget without giving back some of the money taken in? Though there is the interest gained on the taxes held back until the end?
During the best time in the American economy (1949-1970's) the tax rate on the top 10% was quite a bit higher than now, and the Middle class incomes were outpacing inflation (which they are not now). This created a situation where the Largest part of the population drove the economy with consumption. Now we have the larger part of the population has decreasing returns on income, therefore less to spend and pulling the economy down.
The 1% or even the top 10% cannot drive a consumer based economy.
@ The Transaction Tax Dot Org - Yeah, I'll be sure to add in all those other taxes ... when we're talking about them. We're not. We're talking about the income taxes.
Furthermore, adding them in really accomplishes nothing because practically everyone pays sales taxes, payroll taxes, etc. Adding those extra taxes is like having a conversation about food and nutrition and then chiming in, "Don't forget that people need water, oxygen, and sanitation, too!" I mean, yeah, of course, they do. So what? We're talking about food, not air, water, and sanitation.
Finally, regarding the poor paying payroll tax, yeah, they pay those payroll taxes. You betcha. And then they get 'em right back with the EITC (Earned Income Tax Credit). As a matter of fact, in 2008, 24 MILLION people claimed the EITC and got back all or a portion of their payroll taxes.
So don't let's act like we're adding something to the conversation by providing inane and pointless information, shall we?
Fareed Zakaria knows little and talks alot. Firstly he should be sent back to mumbai from where he came. Secondly every human being dislikes taxes, and especially a muslim like fareed zakaria. The reason being, muslims like to rob others. Just look at their profits that they put on their loans, it is approximately 15%/month, and they call it halal. That is the reason fareed zakaria has chosen a topic of taxes, so he can propergate his islamic beliefs.
Jose – You may not like Romney but he only pays 15% because the majority of his money is from capital gains that has already been taxed ONCE so all capital gains are twice taxed. Is that fair?
Have to disagree on this one. While I do think we should simplify the tax system, a more regressive tax structure would be disastrous. The German and French systems are more regressive, yes, but that works because they already have low enough income inequality that they don't need a more progressive system to keep inequality in check. I honestly don't care for the fairness or justice arguments made by the left regarding income inequality, but I think it still must be addressed as a practical matter. Following the financial crisis aggregate demand in the US is too low, and if we shift more of the tax burden onto the middle class and the poor aggregate demand will go even lower. In the future a VAT may be feasible, but for the time being the US must maintain a more progressive tax system than other industrialized nations.
This is true. The second piece of a national sales tax is that you also distribute a lot of that money to those who are on the bottom rung. The poor can't afford to pay more taxes on scarce income unless the government is also going to supplement them to a greater extent than it already does.
In Europe, VATs make a lot of sense because there is a built in assumption in most of these places that no matter how bad it gets for you, you'll never be without a roof over your head and food in your stomach.
IMO, to get where Zakaria is talking about, we'd probably need to move in two stages. Stage one would be getting rid of tax deductions and moving marginal rates lower across the board. Step two would be moving to an actual flat income tax, getting rid of payroll taxes, introducing a VAT, and adjusting social safety net to compensate.
Step two is a lot harder than step 1, and step 1 isn't exactly easy.
...or without healthcare.
yeah truth...you know what ..a super country with out much of its people suffeed from insured health care system rather work hard..high rate of tax systems...in turn costs a lot of money expenditures for its people to recover its food claims thru food stamps..all overall most the system , america planted shoud undergo ..recession
that's what i was thinking, listening to all the tax reform ideas.
we need more taxes. i think everyone who is serious agree with that.
i'm still not sure about making it completely flat tax, though.
we have some of the rich individual and business getting away with tax credits and deduction through lobbyists.
we have some of the middle and low income people who got tax exemptions that distort markets, especially of housing for the sake of "social safety net".
meanwhile, we have a huge inequality in income, public education and access to colleges, public transportation, health care, etc. tax expenditures used as social safety net is distorting and confusing.
however, those these european countries have simpler, lower but nonetheless progressive income tax as well as national sales taxes (high gas tax). why cant we adapt the bowels-simpson idea of lowering income tax rate with carbon and other taxes while treating capital gains as regular income and getting rid of most tax deductions and corporate loopholes.
I agree with Ben ! Regressive taxes have skyrocketed since 1970 causing a lot of these problems !
I agree with Ben ! Regressive taxes have skyrocketed since 1970 causing a lot of these problems ! More regressive flat taxes will destroy domestic jobs and prosperity !
Very simple solution to regressivity of VAT + FICA withholding, with a flat tax:
have the flat tax at say 20% start at a relatively high income level, for example $60,000. So everyone below that just pays VAT and FICA, no income tax.
Charlie
We already let 50% of people off without any fed income tax.
Who is "we" and where did you get that information.
You know, I need to educate myself?
"We" is the American people via their elected representatives. Sources are numerous; you should learn to use Google. Here's one: http://usgovinfo.about.com/od/incometaxandtheirs/a/whopaysmost.htm . And while the bottom 50% aren't quite at 0%, it's very close. However they DO pay payroll taxes.
Tampax, is Google where you get your information?
Are you aware that there are places where information is correct other then the Google.
Get out of your cave and use other search engines. Believe it or not, it is a good thing to access a variety of information to research a concept.
Patrick – are you that clueless – Google is used as an INDEX – when you go do the library (if you do), do you start looking at every single book until you find the one you need, or do you use an index? Here is another example from CNN:
http://money.cnn.com/2011/04/14/pf/taxes/who_pays_income_taxes/index.htm
Now, you can also go to IRS.gov to get more of the detailed information if you wish to do your own analysis.
Abdul, habibi you are very very funny.
Try another search engine other than Google.
Use Google and type "10 top search engines."
Education can be liberating.
Very, very funny.
And thousands of that 50% are millionaires
Ahh, the ol' "Look it up on Google!" argument. The unfortunate thing about Google's rise to fame is that it has now become a catch-all end to any argument whenever someone who doesn't really know what they're talking about wants to make everything THINK they know what they're talking about. Just let Google do the debating for you! All you have to do is provide a random link!
I could not agree more; it is immoral and criminal that the aveage citizen needs a "Tax Expert" to determine their taxes; and the notion that "unearned" income is something special that needs lower taxes is so corrupt as to make one speechless! Clearly, what is needed is a 2 page tax system and that is probbaly one too many! First eliminate entirely the current payroll and income taxes and use a very simple and skewed income redristribution on the order of 1-10 Million 10%, 10-100 Million 50%, over 100 Million 95% on a strictly individual basis. Then fund the govt exclusively from a VAT that excludes food and direct person to person sales in several categories such that the total VAT is around 30% of GDP plus the fees for \business services! Single Payer Health Care 10%, single payer Social Security 10%, Free education 7%, War 1/2%, defense 1%... Removing medical costs from Car, home, and business insurance will save billions, eliminating "claims" processing trillions, ending the multiple "pension" system from all govt(State and local, and FED) as well as from business will revitalize everything. And using the VAT criteria for imports will help level the playing field for foreign goods! We can liquidate all trust and foundations used to avoid taxes and pass their greed to the next generation and use the monies to eli9mionate the national debt; clearly the "death" tax must take all monies beyond a nominal "starter" boost of say a Million or so! If the brats can't make it with daddies money. connections, and traini8ng; then who needs them???
So, basically force the rich and successful, who use the fewest public services, to support the poor and unsuccessful, who use the most public services. That's fair. While we are at it, why don't we just put all our scientists in work camps and force them to work for the good of the public.
"So, basically force the rich and successful, who use the fewest public services, to support the poor and unsuccessful, who use the most public services."
Good god, another imbecile heard from. The rich are the ones who have MOST benefited from public services.
@ MC- EVERYONE is equally free to use the infrastructure. If someone doesn't, it is because they chose not to. Nothing would be greater than more people using more infrastructure to produce more, but far too many choose to not live up to their own potential. The fault for that does not lie with the wealthy. There is absolutely nothing stopping any American from earning more by working harder, faster, longer, smarter, or take risk, or any combination thereof.
Any tax that doesn't start at dollar 1 is not flat. See http://thetransactiontax.org for a single rate tax that can simplify and raise revenue, while dramatically lowering both the rate and the total paid by a wage earner.
This makes no sense to me. How are you going to collect a tax on a point of sale transaction and ask the dude how much money he makes in order to determine the tax rate the register will charge. Just exempt things like groceries, utilities and gas. Yachts and Jets will still carry the same 20%. That is a de facto progressive VAT.
It sound good,the problem is that is,if you live on option no matter how insignificant it may sound it lead to misinterpretation and corruption,therefor whatever system is in place need to be without option...
seppe, until you learn to write in English, don't comment.
that's not a terrible idea. though i dont know about 20% or 60,000. i heard that it have to be more like 30% to replace the current income tax and maybe income of 100,000 or so can be taxed on their income.
in eastern european countries using flat tax with exemption for the bottom income, actual taxes they take in is about the same rates as progressive tax systems expect for the top income.
with exemption for the lowest income earners and additional income tax on the top, i can go for flat tax. then it isn't regressive.
Why is CNN allowing this muslim leftist Zakaria polute its daily headlines is beyond me.
How dare you sir!
And you're an islamaphobe.
Great acting. Bravo!
So you got on the phone with all your girlfriends and you decided to pretend so that the girls could scream "islamaphobia".
hehehe...
First of all, I think you people with more knowledge than I about taxation have covered this topic very well !
Thanks to You all, as well as Fareed.
My Second comment is this: Ted, You are an idiot ! and a Rude one at that ! Here's Ted's comment Folks :
"ted:Why is CNN allowing this muslim leftist Zakaria polute its daily headlines is beyond me."
Now, While I don't know how Ted stumbled onto this discussion,but my instincts tell me that he thought he was going to Fox News ! So, Ted, You bigoted Jerk, FYI; Fareed Zakaria is one of the most knowledgeable Journalists working today. In addition to his award-winning GPS Program, Fareed writes for Time Magazine, and other publications, and is a highly respected American. Mr. Zakaria's religion, whatever it may be, has never interfered with his objectivity, and has nothing to do with his popularity. Sorry for the Big Words Ted, but that's the way we Normal Americans write and think, whoops, "Think" is probably a concept you have yet to discover too. Now, as far as Fareed being a Leftist, my more liberal friends think he's really too conservative, and I think it's a Non-issue. Now Ted, it's time yopu got off of Mom's computer, and turn on your AM radio and listen to some Rush Limpballs ! By Now, See Ya !
Thanks! Exactly my sentiments.
Well said.
Absolutely marvelous.:)
hoosierherm, you have said it all. Well said buddy.
Here here well said
Ted, You are an idiot ! and a Rude one at that ! Here's Ted's comment Folks :
"ted:Why is CNN allowing this muslim leftist Zakaria polute its daily headlines is beyond me."
Now, While I don't know how Ted stumbled onto this discussion,but my instincts tell me that he thought he was going to Fox News ! So, Ted, You bigoted Jerk, FYI; Fareed Zakaria is one of the most knowledgeable Journalists working today. In addition to his award-winning GPS Program, Fareed writes for Time Magazine, and other publications, and is a highly respected American. Mr. Zakaria's religion, whatever it may be, has never interfered with his objectivity, and has nothing to do with his popularity. Sorry for the Big Words Ted, but that's the way we Normal Americans write and think, whoops, "Think" is probably a concept you have yet to discover too. Now, as far as Fareed being a Leftist, my more liberal friends think he's really too conservative, and I think it's a Non-issue. Now Ted, it's time yopu got off of Mom's computer, and turn on your AM radio and listen to some Rush Limpballs ! By Now, See Ya !
Herm- This really isn't the best way to score a date with Fareed.
Agreed! This guy advocates lost of ridiculous stuff. He knows very little of what he talks about, and always compares us to foreign policies.
For Instance, he advocates eliminating the natural-born requirement for presidency. 1) I give you President Albert Fujimoro of Brazil, he fled the country after being indicted. 2) POLITICALLY – can you imagine the political uproar and constant political questioning of his loyalty if we actually had a foreign president. IT would never end considering how HOT our political discussions are. We absolutely would not need that distraction. Zakaria is nuts.
You realize Fujimori was born in Peru, right? You also realize he was the leader of Peru not Brazil, right? You really should learn your history at geography before posting lies.
Wrong and wrong. YOu have no real facts. Wrong country. False info. Worthless post.
Beechwwod1, you need to read before you post. Maybe you could learn something from the Captain!
Problem #1: Fujimoro was the leader of Peru, not Brazil.
Problem #2: He was born there...hence a true native and not a naturalized citizen.
Problem #3. Richard Nixon...native born, un-indicted co-conspirator, and generally corrupt President.
So... exactly how does your idea change anything...other that the history you obviously slept through?
But if we allowed foreign-born citizens to become president, Bill Maher and Jon Stewart could run for the office.
I'm not or Islam at all,but he makes a lot of sense anytime i've listened to him. He seems to be a kindhearted intelligent man.
woops ,sorry for the misspell. I meant to say "I'm not for Islam in any way". and ,by the way, I'd love to see no taxes at all. We are the ones that have earned it. Let us keep it.hahahahhahahaah
I agree with you partially,CNN it's not doing a good job,but Zakaria makes more sense in this case...
What part about SPENDING IS THE PROBLEM don't you understand? Do you even know how highly taxed these other countries are? VAT, Income and Payroll taxes.
Just because you put it in all caps, doesn't make it gospel.
Federal tax rates are the lowest they've been in 50+ years (and back then, the government didn't have programs like Medicare!). So, extraordinarily low tax rates are also a problem.
What part of that don't you understand?
Interesting point – Denmark (Income Tax can reach 57% and VAT 25%)
Tax revenue as a percentage of GDP 48.2% - http://www.investopedia.com/financial-edge/0911/Countries-With-The-Highest-Taxes.aspx (US 24% about the 26th highest out of 28 developed countries).
Happiest country on Earth – http://www.forbes.com/2010/07/14/world-happiest-countries-lifestyle-realestate-gallup-table.html (US is number 14)
Only one problem: real tax reform takes money out of the pockets of politicians, especially Republicans... so until the Republican presence in Congress is reduced, no way in hell will there be any meaningful tax reform...
Did you have to pay a VAT when you were brainwashed?
hehehehehehe...
You should really head the proverb "that it is better to be silent and thought a fool than to open your mouth and have it proven". You do realize it was the democrats that were propping up Fannie / Freddie before the fall when Bush / McCain were looking for more oversight, don't you? You are problem OK with the union bosses buying off politicians as well. The thing is, BOTH parties are corrupted by special interests – it is only fools like you that see it as a one-sided issue.
I'm gonna' open my mouth and look like a fool,but i would vote for mccaine if he were running.Most didnt because they didnt want the war to continue,but it has anyway,hasnt it.Id rather fight them there than here, but would love to have more of our military on our borders and going after our own homegrown druggies.etc.Illegal immigrants that drain our system and other vices like that. If the government would allow us to rear our own children instead of interferring on every front,maybe we wouldnt have to worry also about so many being incarcerated.I mention that because I saw no area to place our input on that topic.
The complex tax code is desired by both major parties, it's how they get funding to stay in power. http://www.thedailyshow.com/watch/tue-december-13-2011/exclusive-lawrence-lessig-extended-interview-pt–1
As long as the Political Parties can keep us believing its all the fault of the "other party" we loose. They are both corrupted by our current tax system and campaign finance.
George Washington warned against political parties - http://www.thirty-thousand.org/pages/Baneful_Parties.htm
Agree. Except that the "two-pages" criteria can further be simplified to one word: 9-9-9 ! Thank you Mr. Cain for putting spotlight on it.
nine-nine-nine is 3 words, how's that for some common sense?
Technically it is one word repeated three times.
9.99. That's the price of a pizza.
hehe...
Once in awhile Fareed does come out with a good idea. Problem is this idea has been around for decades and nothing has ever been done. Why does he think that suddenly Congress would change their corrupt and self serving ways? Gaurenteed it won't happen if we have a split house and presidency as is now the case. And of course we have the new menace of teabaggers and occupiers to keep the status quo going.
Can you restate what you think is the idea; and, then explain the resolution you are proposing?
I BELIEVE THAT THE OVERALL OBJECTIVE WAS TO PROVIDE THE MOST STABLE ENVIRONMENT IMAGINABLE FOR THOSE THAT NOT ONLY DESERVE IT, BUT ALSO FOR THOSE THAT WE WANT TO DESERVE IT AS IT SHOULD BE CONSIDERED A PRIVELAGE AND HONOR TO BE ABLE TO ENJOY LIFE. IF THE THINGS YOU DO EVERDAY ARE UNENJOYABLE THEN SOCIETY ISN'T IN THE CORRECT SHAPE TO BE EDUCATIONAL AND MEANINGFUL FOR OURSELVES AND THE NEXT GENERATION.
SOMEONE, habibi, we do not understand what you are saying. Restate.
The American tax code is deceptively progressive though – the richest Americans pay a lower tax rate than many middle and upper middle class families. At least a consumption tax would be proportional to the amount of money that one spends. In addition, if we increase the amount of tax burden on corporations by eliminating business tax loopholes, then we can reduce the tax burden on families.
Just can't hide stupid. Our fed tax rates are as follows.
•10% on taxable income from $0 to $8,700, plus
•15% on taxable income over $8,700 to $35,350, plus
•25% on taxable income over $35,350 to $85,650, plus
•28% on taxable income over $85,650 to $178,650, plus
•33% on taxable income over $178,650 to $388,350, plus
•35% on taxable income over $388,350.
Except that most of the wealthy get a substantial portion of their income in stock options and capital gains specifically to avoid high tax rates associated with direct income. This is why Romney only paid 15% on his income last year when he made millions.
Capital gains are taxed 15% no matter how much you make. I would guess that a majority of the super wealthy make most of their money from capital gains, not taxable income.
The key is "Taxable Income".
Those figures are on TAXABLE INCOME, not on total income. So those are the rates AFTER all of the loopholes that are given to the rich. YOu need to measure EFFECTIVE TAX RATES to have a fair comparison.
except at the rates you quote people with a child or children qualify for earned in come credit at about 50K income level. It is possible to receive more than you pay because a credit is much better than a deduction. So you go out and buy a truck average cost 40k, or your new electric car and add that vat tax to that along with the state county and city sales tax and figure out if you can still afford to buy it. Vat is stupid for america . We are not these smaller countries – land wise – they keep pulling out as an examples. They are a poor fit to our system and how we look geographically. Put in a mass transportation system like these other smaller countries you chose to cite as examples and you jmight could start to consider similarities. Farad, get out of NY once in awhile it is not the center of the universe – its a big country and different where ever you go.- and the metro isn't always available . Before I offended anybody from NY – love the city to visit. Good people. Good beer. The government takes in enough already. Flat tax. Flat tax. Flat tax. Set a rate for income levels. Quit there.
Remember that these are progressive rates, so that someone in the 2nd bracket still pays 10% on their first $8,700 so EVERYONE'S effective rate is lower than what is posted there. Want to compare effective rates? Look here:
http://www.taxfoundation.org/news/show/250.html#table8
The rate of progressivity is less than would appear from the posted rates by income level, but it is still absolutely progressive in the aggregate.
Worst case, you have a standard deduction of $5,950. This means anyone making less than this pays NO income tax (like they could afford to). They still pay social security and medicade. With this considered, you can make nearly $15,000 (over $20,000 if your married) before you get to the 15% bracket. If you can itemize, the sky is pretty much the limit.
Last week there were several stories on CEO bonuses and salaries. What was notable in most all examples what how these huge payouts are/were structured. The vast majority was given in stocks or stock options (which are taxed at your aforementioned 15% when they are cashed in). It was a relatively small portion that was paid out in cash, which would be taxed according to the rates Dean stated. IRS pursues cases where heads of small businesses pay themselves a one dollar salary but heavy up on the dividend or stock component.
Bruce – do you even KNOW of any of these "magical" loopholes that you are talking about, or are you just spouting talking points you heard from Madow? Many "loopholes" are just regular tax deductions (home mortgage interest, taxes paid to your state, etc) and other are ones granted by the Feds to promote what they want (ie: the "Green Energy" tax cuts that allowed GE to pay no federal taxes).
OH MY GOD! This must be a sign of the end of the age.
I agree with Zakaria. He's right.
I shall now go be nauseous.
No, it's a sign that you are getting smarter. Congratulations – this is a big day for you!
Zakaria is wrong only about 95% of the time. This is one of his successes - maybe. It reminds me of the Two-Page Simplified Tax Form, though, the one that asks on Page One how much money you made, and on Page Two says, "Send it in."
Zakaria is a hack bent on making us like Europe. The problem is we aren't Europe, thank God. Fair would be a flat tax with few deductions. All progressive tax systems are unfair by definition by forcing higher producers and earners to pay higher rates. that said, he might be on to something here. One rate on income (only one) and a VAT might be more fair.
You make it sound like europe it's a dirty word , THAT IS AN INSULT! let me remind you that America was discovered by european and build by european ....
We only need a one line tax code. Everyone pays 18% of their gross income with no exemptions allowed for anything.
If I live in a Company house, drive a Company car, eat in the Company dining room, go on Company retreat vacations and receive $1 in gross income per year, does that mean I pay 18 cents tax? (with no tax law, only my gross income is taxed)
No, US income earners are NOT taxed on gross income- they are taxed on Adjusted Gross Income (AGI), which is total (gross) income less all deductions. Most of the company benefits you list are considered income and are taxed as such.
And then when everyone pays 18% of their income, all the small business owners & self-employed people will find fraudulent ways to declare less income... fraud will increase dramatically. A VAT or national sales tax would eliminate a lot of that (since many of the transactions are charged and easier to scrutinize).
There he goes again presenting facts. But hey, go ahead and shoot the messenger while continuing to vote democrat or republican against your own interests.
doofus, you are not making any sense.
Regroup.
uffda...
The downside to the consumption tax is that lower income people spend a much larger proportion of their income overall. For example, a person making $10 million/year might only spend $2 million/year. That's a lot of money, and a lot of tax, but he's only getting taxed on 20% of his yearly income. On the other hand, someone making $20,000/year will spend $20,000/year and is therefore getting taxed on 100% of his income.
I suppose you could level things a bit if you treated stock purchases the same as other puchases and applied sales tax to them also. Not only would it subject a much larger percentage of the very wealthy's income to taxes, but it would also make stock purchases more deliberate and less volitile. People would make more long term investments to avoid more sales tax, as opposed to going for short profits.
If you have less money, you should be consuming less. Spending more than you can afford will never help anyone get out of poverty.
Below a certain level of income, one has to spend all of it just to survive. It has nothing to do with spending it wisely when all the money goes to food and shelter.
Also, that excess cash will EVENTUALLY be spent, and it will be taxed at that time...
Most consumption tax schemes allow for this by exempting essentials like food, medicine, etc, from the tax. Most consumption tax schemes also refund any consumption taxes paid by those under the poverty threshold.
Holy S**T!
I actually agree with something you wrote.
2 pages, EVERYONE pays a 19% consumption tax.
AMEN!
I generally agree with much of what Fareed Zakaria writes. But here I disagree somewhat. He is right to say that a long, detailed, complex tax code is a sign of special interests who pay off politicians to insert loopholes and other favorable treatment. But another reason a tax code – or any regulation – is complex is to prevent corruption. To make it clear what actions merit what type of tax breaks. If a rule is written too simply, then people or investments not intended for deductions will get them. A good rule must be very specific and well written to prevent corruption and to prevent benefits going to the unintended.
Thanks.
Complexity does not prevent corruption. It allows loopholes to be hidden everywhere. OUr tax code is about as corrupt as it gets. THat's why the lobbyists spend so much money to get the loopholes.
Income tax simplification:
1. Eliminate AMT.
2. Eliminate all itemized deductions for individual returns.
3. Add a couple more brackets for highest incomes.
4. Adjust rates to taste.
i like this, but i think you need to expand it. Everything counts as income
1) healthcare you get from work: taxable
2) Children: no tax deduction. people without kids should not subsidize those with kids
3) mortgage? no tax deduction. renters should not subsidize homeowners
4) charity? no tax deduction
5) non-working spouse: no deduction. why should singles subsidize married people\
6) Dividends, cap gains, etc. pay same tax
Bottom line: if it is income you pay same tax as everyone else with same income. government should be trying to encourage or discourage any of this. let people make their own lifestyle choices without that interferance
How about getting rid of the marriage penalty – why should married people pay more than two single people living together?
Harion – The way i would like to see it is every single person would be taxed on their earnings (meaning anything you received as compensation would be taxed – a company car, company healthcare, cash, etc). So a woman would earn x amount would be taxed on that amount whether married or single. her husband or boyfriend living with her would be taxed on the amount he earned. if you want to be married, that's fine but it doesn't help or hurt your personal tax situation at all. If your spouse decides not to work, great for you...but you aren't getting a deduction for that. If you have kids, great for you...no deduction. you are taking care of grandma....no deduction. you are taxed on your individual income.
From the guy who brought you "Senior Stress Month" last July, comes a new proposition the entire 99% will hate: FLAT TAX.
Seriously, this guy deserves a pay cut. And a wealth tax.
A VAT may very well make sense. But, implementing it fairly is a big problem. It will hit those about to retire very hard. They have spent their lives paying income taxes under the old system, and then will have their expenses increased by 20% or so just as their income goes away and they are living on savings. This never seems to be mentioned by the VAT fans. A tax rebate for retirees? So much for the 2-page form!
It would be nice
No deductions for children. Time to stop promoting 19th century family planning tax breaks that turned into a welfare scheme. I know an unemplyed guy who has 6 kids with 3 mommas who makes as much on his refund as I pay in taxes each year. Makes me furious.
Why all this anger at consumption? "Third, American’s consume too much, often using credit and leverage to do so. A consumption tax would moderate this behavior. Government will always get less of a behavior it taxes and more of what it subsidies." Do Americans consume "too" much? Who is to say? I feel I only have one life to live and my goal is to consume as much as life as to offer before I die....travel, food, movies, books, M&Ms, clothes, etc. Why does Zakaria (or anyone else for that matter) think what gives me enjoyment should be reduced? Is it because they enjoy different things? Also, I enjoy buying things on credit and using leverage. Why would I ever pay off a low cost home equity loan, mortgage, or student loan when I can earn much better returns elsewhere? Does Zakaria know what is the best amount of leverage for me to have? It certainly appears that way. Seems like the hight of arrogance to imply that you know what level someone else should consume at or borrow better then they do. Can someone please explain what part of this statement by Zakaria they find so appealing?
AJ: You have entirely too much already. I want several of your books and ALL your M&Ms. Fork 'em over.
Signed,
Zakaria
when my wife says i am eating the M&Ms "like there is no tomorrow"....i point out articles like this! LOL
If Americans did not over-consume there would be no big retail stores like K-Mart and Macys.
Yep, 1 for the idiots aka tea party and the 2nd for normal people.
Your comment exposes you as the only true idiot....
Some writers herein are penning "we are the United States, we can't be like other countries. We can't have a health system like others. We can't have a tax system like others, etc etc etc". ..... WHY the hell not. ???? What sets us apart from the rest ?
They certainly look human to me. In fact, most of our lineages came via them. Nearly all inventions came from, or had its roots, in them.
"Something unpleasant is coming when men are anxious to tell the truth.” – Benjamin Disraeli
A simplified tax code will never happen.
A huge industry is built around the fact that our tax code is confusing and overly complex. One way or another, that industry and it's lobby muscle will see to it that the status quo is untouched.
Be not afraid or defeated!
The Transaction Tax or APT Tax could fit on 2 pages. It is a very small tax (about 0.35% from each of the payer and the payee) on every movement of money (transaction) in the economy. It is collected automatically at time of payment or deposit. There are no exemptions, loopholes, refunds, etc. It replaces all other Federal Taxes; income, payroll (SS/Medicare), fuel, excise, inheritance, etc. One tax / one rate.
A wage earner who doesn’t save any money making $50,000/yr. in wages, interest, profit, etc. and spending all of it, would pay $350 in taxes (with no paperwork). If he saved half of that, he would pay $175 (plus 0.35% of interest/dividends paid on savings). Compared to the current system:
Income Tax Before Deductions and Credits (Current System) $8625
Social Security and Medicare if income is all wages (Current System not counting current payroll tax holiday) $3825 [double if self employed]
Add in fuel, excise, and other federal taxes.
At first look this appears to be a regressive tax, but it’s not, since high net worth/income individuals or companies have many transactions that are currently not taxed or are deferred, e.g. equity swaps, carried interest, foreign currency exchanges, etc. which would now be taxed as a transaction.
I ran a spreadsheet comparing 20 turns of $100 Million (stock trades, etc. – e.g. buy $100 million sell it at a profit, immediately reinvest all of it, repeat).
The left column is simply compounding "carried interest" on 1% return on investment
The center column is the total transaction tax at .35% on the sale, and associated buy.
The 3rd column is the value of the portfolio after the transaction tax.
Current System Transaction Tax Value after Transaction Tax
$100,000,000.00 $350,000.00 $99,650,000.00
$101,000,000.00 $704,525.50 $100,646,500.00
$102,010,000.00 $711,570.76 $101,652,965.00
...
$119,614,747.57 $834,372.67 $119,196,095.95
$120,810,895.04 $421,358.20 $120,388,056.91
Current Tax System
Profit Before Tax $20,810,895.04
Capital Gains Tax $3,121,634.26
Net Profit $17,689,260.79
(If it was earned income with no deductions, the tax would be around $5.6 Million)
The Transaction Tax
Net Profit after accrued taxes $20,738,056.91
Total Transaction Tax Paid $14,590,448.04
There are an estimated $1000 trillion transactions/yr in the US economy.
There's one problem with your math.. you assume capital gains tax under the current system, but you do realize that you need to hold the investment for a year before you are taxed at the capital gains rate. 20 "turns" at that tax rate would take over 20 years.
Chris – there are special rules if you invest in like investments which defer the tax. E.g. if I buy 100 shares of a stock, sell it when it rises to a certain price point, and repurchase it at a lower price in a short time frame, it isn't taxed. This is, of course, a very simplistic model, but even running it paying earned income rates, you would still be considerably ahead profit wise under The Transaction Tax.
If they were paying 35% income tax on each turn, the results would be:
Net Profit $13,099,791.55
Total Income Tax $7,053,734.02
Use the calculator at thetransactiontax (dot) org to see what your tax burden would be and compare it to your federal return this year. (Remember, this is the only Federal Tax you would pay, no more Payroll, Excise, Income, Inheritance, Fuel, etc. taxes).
Main objections:
1. De-motivates campaign contributions from those looking for special tax treatment in the tax code since the tax is on the movement of money not income, profit, consumption, etc. and is the same for everyone. (Though I would raise it for money leaving the US economy and exempt it for money coming into the US economy.)
2. Tax accountants and attorneys would need to cross-train. It is estimated that hundreds of billions of dollars are spent each year on tax planning and management.
3. It provides sufficient revenue for the government to operate without a deficit to the budget and surpluses could be used to slowly retire the federal debt and make investments in education, infrastructure, and healthcare to have an educated and healthy population to build the nation. Additional surpluses could be reserved for future economic needs. Investors would have to invest in private equities with studied risk rather than enjoying the security of the government’s ability to collect taxes to pay interest on the debt.
VAT is regressive. In parts of Europe where VAT are used. Capital gains are not taxed via VAT. It's clear that in the USA, capital gains will remain the sacred cow. And VAT fraud is rampant in Europe. I think you're taking it for granted in your calculus that capital gains will be taxed. This isn't likely to happen.
Mike – The Transaction Tax is not VAT. Nothing is exempt, not capital gains, not income, not charitable contributions, not mortgage interest, ... nothing. It is collected when the money enters or leaves your account (higher if cash). Look at the table I put up - the net profit for the investor was higher than gross profit minus capital gains, yet 460% higher revenue was generated via The Transaction Tax. Visit the sites http://thetransactiontax.org and http://apttax.com to learn more.
Yes there will be monumental resistance but if enough people understand it and then work to find candidates that will make it happen it will improve things dramatically.
There's nothing "ironic" about the fact that a VAT is regressive. It's called "economics". There are ample ways to simplify the tax code that do not move us to a regressive system that perpetuates income inequality and capital hoarding.
That said, something has to give because the tax code IS the root of all evil in our government!
Not necessarily regressive if the VAT raises capitol and ends corruption. Without corruption by monied interests, perhaps the goals of our government will shift to helping the people – education, environment, infrastructure, jobs, training, research, space exploration. We've abandoned these aspects of our system in favor of curtailing favors to corporate interests and the banks.
The rich live on DIVIDENDS. Nobody has mentioned that. Dividends are taxed at 15%.
Dude, the rich live on clipping coupons from tax-exempt munies. Tax rate: 0%.
2 page? This administration can get it down to 2 lines:
How much did you earn?
Send it in.
I am open to the possibility of replacing our current taxing system with a flat tax (on income or sales). But would strongly resist having both a national income tax and a national sales tax. Uncle Sam is morbidly obese, spending $1500 billion annually he doesn't have. He does not know how to say NO. So the American people must clearly and firmly tell him NO.
I see no relationship between a flat tax and lack of corruption. I agree that removing the exemptions makes sense but how does a progressive tax cause corruption? A flat tax (whether income, VAT, or sales-these are all flat taxes) benefits the rich and hurts the poor. This is fair? This is the American way? I don't think so.
It's not just exemptions, it's exclusions or special treatment. E.g. a person renting a home cannot deduct the rent, but a business can as a "business expense". Many financial transaction don't incur any taxation. See my post above.
A sure sign of the apocaplyse. I almost agree with Zakaria. But if we are adding a VAT or national sales tax, we must eliminate the federal income tax. Fareed, look up the fair tax, others have been working on this path for several years now. But it will never pass because the libs have created a society with too many moochers already.
Hey dingdong, what are your sources?
Who are the "others?"
Your article shows your complete ignorance of the complexity of todays economy and financial instruments. We don't live in a simple world of cash in and cash out. There are complex transactions for which the amount and timing of the tax requires many rules. Think before you write to appeal to the masses.
I come from a Eastern European country with flat tax and very high corruption. I have lived in US 13 years now and can say one thing – the American people are robbed daily because of the laws that are made just for the rich. I believe this country is much more corrupt than any other 'known-for-its-corruption" country because it is done legally like Fareed says. But that is exactly why this will never change. The rich will keep getting richer and these lobbyists will make sure of that.
And to misinformed people like Ted – Fareed is from India. Don't confuse names with race or religion. Idiot!
So you say you are European and you go to America, presumably for a better life. You live there for 13 years enjoying the freedom, healthcare, free speech,... And now, you repay your new country with slimy stabs in the back and trying to sow dissent.
You should go back to wherever you belong, because it ain't here. That's for sure.
Shut up. He's just telling you his experience. Dont be such a pig headed elitist.
Cliff, Abdul, hehehe...
A two page tax code will never happen, and the notion that we have one that is so short shows that Zakaria doesn't know much about taxes. Of course the code doesn't need to be like a phone book, and there needs to be less loop-holes, but lets not go to one extreme in order to get away from the opposite extreme.
It won't change as long as people follow the political party leaders and candidates. Once people quit listening to what they want to hear and study different ways to study problems to find the best and then demand it through the ballot box, then change can happen.
A flat tax would be great every one pays the same percentage no matter what they make and no tax exemptions, and it fits on one page.
Fareed, One big flaw in your argument. Reforming the tax code would be up to those very politicians that rely in the current code for their payola. Kinda like asking bank robbers to reform bank security, eh?
Find candidates, regardless of party, who will commit to reforming the tax code and vote them into office. If they don't succeed replace them.
I'm absolutely floored. Zakaria finally articulates an opinion that doesn't have more holes than Swiss cheese! Give credit where credit is due...Zakaria finally supports an intelligent idea! Way to go Fareed!
A flat tax could have some very drastic unintended consequences. People may start barter trading and practically stop the tax revenue flow which may leave congress out in the cold and they may become burglars.
Tax avoidance should have such a high penalty that nobody is tempted. If the rate is so low it is "rounding error" (e.g. The Transaction Tax at 0.35%) it is painless to pay (and automatic).
Having spent months haranguing with ATT folks, a few years back, I find it funny the malarkey hasn't changed. While the technological ability to invoke the tax is possible it is a huge undertaking fraught with possible errors along the way. Not being current I wonder what has happened to the "cash" transactions argument. Originally Dr. Feige proposed a punitive rate for dealing in "cash" as it subverts the process. Of the non-business class who is most likely to be "innocently" dealing in "cash"?
Like it or not, barter transactions will increase. In the US it is often not so much the money saved but the pleasure gained from beating the system. This is also a flaw in Zakaria's thinking.
If memory serves me, the elimination of FICA, Excise, etc., taxes will be phased in over not necessarily a short period of time. State income taxes was another huge hurdle dependent on numerous variables.
Feige originally envisioned, preferred, a worldwide ATT. Absent that any number of tax avoidance vehicles are available by trading and earning vast sums overseas, bringing home only that piddlin' amount one desires for living standards.
As with most "simple answers", simplicity is in the eye of the beholder.
Pardon me, I stopped too soon. One other issue in the ATT and Zakaria's ideas, and I can hear the cries of "serves them right", is we employ, publicly and privately, tens of thousands of folks working in tax related professions. These are, generally, well paid individuals who will not take kindly to jobs at the local Walmart.
The barter system has always been active.
Ask Harlon Katz to research barter sites using Google and other search engines. hehehe...
Asking the crooks to beef up security seems a little silly. Congress passes at least one tax law per week. Every one of them are to help some friend or business.
We will never get honest government as long as we are the United
States of Graft and Corruption. Revolution is the only answer to such a corrupt system. We will never vote our way to an honest government.
Targeted taxes pick winners and losers. One simple, low, rate.
"Simple" tax laws is a code word for regressive taxes. Make the poor pay more, the rich less, increase the staggering rich/poor devoid. You can close the loopholes without making it very "simple" and hence grossly unfair.
I understand that our system is more progressive than many other tax systems, but the proposed tax code here is regressive. The flat income tax would be neutral, but raising taxes via the sales tax system creates a regressive system as the tax on every item is a larger % of poorer American's income than it is on more wealthy American's. Further, the argument that the revenue is more stable is just bogus. A decrease in income leads to a decrease in spending, which would decrease tax revenues proportionately. The only real positive that comes out of sales taxes is that it's easier to track and the government won't miss out on revenue from fraud.
I'd agree except a flat tax is only simple until you try answering one question: What would be considered income?
From there it just get's more complicated. What about child support payments? Does the Father pay tax on the income used to make a payment? Does the Mother have to pay the tax on the payment itself? Would I pay tax on business dinners the company pays for me? What about hotel/flight when traveling to do company business?
If you quit taxing people's income and consumption and simply tax the movement of money, at an extremely low rate, with no exemptions or loopholes, those questions go away.
What about the cost of goods sold? What about supplies and salaries paid by businesses.
Under The Transaction Tax, those don't matter when it comes to taxes paid. It's simply an extremely small tax rate every time money changes hands. You buy supplies, worth $1000, your account is automatically debited $3.50, the seller is automatically debited $3.50. You pay someone $100,000 in salary, you are automatically debited $350, and the person being paid is automatically debited $350. That's it, no profit/loss/expense/gain calculations - no income tax, no payroll taxes (which currently require $7650 for the employer and $7650 for the employee), etc. no forms to fill out and file, no tax specialists to pay. (If we included health care under the tax, that would save around $8000-10,000+ a year in benefits expense for the same employee.)
There is another great advantage for such a tax code. Legislators will save the huge amount of time they now spend on tax debates and wrangling.
Some interesting points, but all superflous until the huge lobbyists representing the legal and accounting "professions" are neutralized/eliminated. Of course we need a simpler tax code. That's been the case for decades. But when a serious discussion arises, it only causes the lobbyists coffers to swell. Those responsible for writing the laws do so only after they protect their own interests.
I think mr Zakaria is comparing oranges to apples abit to be honest, in the case of germany for example the income inequality is much smaller and the "band" for what you consider middleclass encompass most people, yes there is still super rich and dirt poor people but far more are simply considered well off than in the USA. Add to this germany also has stuff like socialized medicine which provides a safty net without more added cost for a family. The examples mr Z also put up is missleading at best: yes more wealthy americans pay more % wise then wealthy germans but thats only because there is far more wealthy americans and more poor who cannot pay taxes at all, it shifts the burden. Germany does not have that isssue to the same extent, since most people are decent off they all can pay taxes.
If one started to nest into the root causes of it you somewhere get to the part where in the usa working without a collegge degree simply tends to be to underpaid, when a job pays 8$/hour in the usa but 16$/hour in lets say sweden, the same job you can see why one country works and the other does not. It comes into how capital is piled and dispersed, how capitalism works in reality only for people with a capital they can risk (which excludes the clear majority of american families) money makes more money but only if you have the money to start it more or less. It comes down to how labour is vallued, minimum wage etc etc.
Personally i dont think there is a or even a 100 quick fixes to get the country on the right keel, usa needs a cleanslate and reboot more or less in its financial and political system.
The Federal Income Tax Law was never ratified by enough states to make it legal. No one realizes this.
Your left antenna is bent.
Completely remove any income tax, and the whole bureaucracy that goes with it.
Replace with sales tax. 0% on necessities(unprepared food, rent, utilities, clothing up to $50 per single item, first car(up to $30,000, medical bills(cosmetic or not dont really care), first home up to $1.5 million). Any current or state taxes on any of the excempt items should be removed as well. Apply a tier 1 sales tax on other things, prepared food(ie all restaurants), liquor/tobacco/any other legal recreational drug, entertainment(games, cds, phones, computers, movies, concerts, you name it). Lets say any item under $5000 gets the tier 1 tax(off the top of my head cant thing of anything that would need to be an exception). Most things 99% of the people buy would fall under the tier 1 tax And a tier 2 sales tax that is DRASTICALLY higher on luxury items yachts, 2nd+ homes, private airplanes, all that kinda stuff. Apply the same tax on any imports, so you cant go across the border and buy it instead. I dont know want percentage the tier 1 rate should be, someone woudl have to crunch the numbers and find out, 10-20% is likely. Tier 2 rate should be more like 25%-1000% on a sliding scale based on the cost of the item(a million dollar item should be taxed a lot higher then a $50,000 item).
Flesh that out onto 2 pages and done!
Currently our 2-page tax code is pretty simple : page 1 for middle class who pay everything and page 2 for the rich who hide behind loop holes and built-in tax breaks.
Oh, actually I think you mean the rich who pay much, much, much higher taxes than most of us do. You've been listening to too much Occupy rhetoric!
WHY ARE SITUATIONS IN SOCIETY THAT HAVE NO PRODUCTIVE VALUE BECOMING MORE VALUABLE THAN LIFE ITSELF? WE AS SOCIETY ARE TURNING OUR HEADS EVERYDAY ON THINGS THAT ARE DESTROYING OUR LIVES AND JUST EXPECTING THEM TO FIX THEMSELVES. THESE SITUATIONS HAVE BEEN AND ALWAYS WILL BE BAD EXAMPLES OF MORALS, COMMUNICATION, RELIGIOUS BELIEFS AND EDUCATIONAL STANDARDS AND ARE DESTROYING NOT ONLY THE BUILDING BLOCKS OF THIS COUNTRY BUT ANY FUTURE HOPES OF NORMALITY OR POSITIVE STRUCTURING THAT THIS SOCIETY MIGHT NEED TO HAVE. SOMETHING MUST BE DONE. NO ONE IN THIS SOCIETY IS DOING THEIR JOB AND EVERYONE IS JUST WAITING TO DIE ITS PATHETIC. SOCIETY NEEDS A HUG OR SOMETHIN
Uh, your CAPS LOCK is on.
Herman Cain knew what he was talking about with his 9-9-9 plan, which included a 9% federal sales tax. I think it's a wonderful idea, although it's unlikely to happen any time in the near future. After all, politicians tend to look out for their own interests first.
Fareed is an advocate for the NWO: World Bank, IMF, etc.. He can't be trusted.
Taxes are like weeds - no matter what variety, they will grow. Current system is broken but in play/stable. As stated before me, it all comes down to "what" that tax is calculated on. So, a flat consumption tax of 10%. Taxpayer A, single/young, makes $5M, spends $1M to live and pays $100K in taxes versus Taxpayer B, married with 3 kids, makes $30K, spends everything he makes and pays $3K in taxes. Since this seems unfair/regressive, you start giving exemptions or exempting low income levels or number of kids and once again, the weeds are growing...... No good answers but good spirited conversations... And all this during one of the lowest income tax rate structures since the 1950's..... The future does not bode well.....
I prefer not using the word "unfair" in these discussions since its so individualized. Everyone has such a different definition. Les – In the situation you described, I don't feel your original case is such a bad outcome. Life is about choices and I feel the government shouldn't penalize or reward people's life choices nor force people to pay for other's choices. In the case you present, I don't think Taxpayer A should have to pay a higher percentage of taxes because of the life choices of Taxpayer B. Now if we feel Taxpayer B or others like him needs help, that can be handled by strengthening the safety net but I don't think we should force Taxpayer A to pay more.
But AJ, if you look at the numbers, Taxpayer A paid 2% of his gross income via the flat 10% consumption tax whereas Taxpayer B paid 10%! I think Mark Twain had it right about "lies, damn lies and statistics...." I just don't see a consumption tax working in favor of the lower middle class or hard working lower income Americans. And I agree that once you start "playing" with the rules, you're back to square one. Personally, I don't like the current system but I don't see a better one that is without it's own set of problems and faults.
Taxman – I agree with you, that the poor and middle class will end up paying a larger % of their earnings in taxes. i misread his comments on the consumption tax as a commentary on income tax. Although, i would say this that i would prefer a consumption tax that had that outcome (as described by Les) vs a consumption tax that then allowed numerous exemptions on goods and income.
I don't see what is unfair about a VAT (federal sales tax). Those with money will buy more "toys" and thus pay more in taxes. This applies to NEW goods, so if you are buying at a second hand, you wouldn't be paying the tax. The working poor don't have the disposable income will only buy what they need and pay the least in taxes, where the wealthy will be paying more. I am not sure how foreign and internet purchases would come into play on this. As for the percent creaping up, there is a tipping point where the tax becomes too much and people will stop buying. A consumption tax would slow the economic recovery, and promote savings once again. I am unsure if this is a good thing at the moment. There are already people avoiding state / federal taxes by traveling to other areas to make their purchases. I read an article the other night about southern California people traveling to Mexico to buy gas since it is in the $1.50 range per gallon. If you live near a border, you have that luxury.
Let me be first to thank the 22 year old Congressional staff members who currently write the tax code and regulations, the IRS for their incomprehensible explanations thereof and the federal tax court rulings for making the U.S. income tax system as complex as it is today, thus affording me and many other CPAs the opportunity to make a living in a completely unnecessary field, especially when those 22 year old staff members ignore the ever present "Law of Unintentional Consequences"......
300 million Americans will always find a way to outsmart 535 Congressmen.
If you were really a CPA, you would know that:
1. The Joint Committee on Taxation, which writes all tax legislation, is not staffed by 22-year olds. The JCT staff is highly educated, experienced, and dedicated.
2. Regulations are written by the Treasury.
3.
While the VAT has the advantage that EVERYONE will pay taxes, I cannot agree with it. First, America is a free country. Tax my income, not what I choose to do with it. Second, the US is a consumer economy. When you tax something you get less of it. A VAT means less consumer spending. And, most importantly, third, a VAT would be like giving a big ol' pile of cocaine to a bunch of crack heads. The VAT would just creep up and creep up. You'd never actually know how much you pay in taxes, so adding another 1% won't make a difference. It would start at 15% and be at 25% before you know it. Just a bad idea.
The tax code is complex for one reason: accountants are the only people who can scrw lawyers and most Congressmen are lawyers. Think about it. It's true.
I am totally in favor of a simpler tax code. But I am not in favor of a regressive system that would shift more of the burden on those who make the least. Given the potential for wealthy investors to shop internationally for products or services with lower taxes, how patriotic of a system would that be? One could simply make his money in the US and spend it elsewhere and generate tax revenue for that country. Would investment income be treated as income or would it be considered a purchase of financial products? I am in favor of leveling the playing field and removing so many unfair exemptions that penalize people like me for not having children or for being a renter instead of an owner of property. I have friends at work who make more than I do but who actually get a tax refund in the thousands where I am left owing several thousand more to subsidize their refunds. That's not fair, that's not right.
I agree with you. This is a free country. You are free to make your own choices about how you live your life. Your choices in life should affect your taxes. That includes how you spend your money. Tax my income, not what I choose to do with it. No VAT.
Typo: Your choices in life should NOT affect your taxes.
With the VAT, you will never know exactly how much you pay to the federal govt (unless you tally every receipt for an entire year). That is a very dangerous thing for a taxpayer.
Julnor, you don't know how much federal tax you're paying now. I didn't agree with Ronald Reagan on much, but he spoke the truth when he said this: "Corporations don't pay taxes. Only people pay taxes." And unlike Romney, Reagan didn't believe corporations were people. The point is, all corporate taxes, of all kinds, are passed through to the consumer. No difference from the VAT. You may or may not have a point about the danger of not knowing how much tax you are paying, but in that regard, a VAT is no better or worse that our current system.
You are correct that corporations don't pay taxes, they merely collect them. However, that tax is extremely indirect and based upon how well a company is run. A VAT is a direct tax on me, one that would be far more onerous. If a company makes 10% profit on a sale and they pay 35% tax, that's still only 3.5% and typically it would be far less.
And you can choose not to buy that corporation's product!
Once upon a time, the corporate income tax generated a significant share of tax revenues; now, it’s bumping along in the 2%-of-GDP range. Yes, the marginal rate of corporate income tax is high, at 35%.
http://blogs.reuters.com/felix-salmon/2011/11/17/charts-of-the-day-corporate-income-tax-edition/
Instead of a VAT, a better suggestion is to have two new taxes. One is equal to one ten billionth of federal spending (not including SS and Medicare which have dedicated tax streams). The other is equal to one one hundred billionth of the federal debt. The first is about $250, the second about $150. They would be due on October 15 and every American 18 and older would have to pay. This is six months from the income tax and 3 weeks before election day. We need a tax that has a direct link between spending, debt and our wallets. Only then will there be an incentive to reduce both. If you get money and services from the govt and don't pay income tax, why wouldn't you want more spending?
Yeah, and ask the British how the VAT worked for the average joe.
Some states, mine included already have a statewide sales tax. Implementing a federal salex tax on top of that would just make it even worse.
http://www.fairtax.org. It would not be ON TOP of your current tax. The short answer it would be in place of the taxes you are already paying and it would be on items that would be cheaper to produce, and delivery than they were in the past.
Uh huh. Like the Chinese tax code.
Line 1: How much money did you make last year?
Line 2: Send it in.
That is the Obama tax code: make money and give it to me to waste on CEO bonuses for failing green companies.
As there is no manufacturing in US and only confined to Defense & Arms, it will not be worthwhile to have VAT. As most items consumed are imported including eatable, it is better to have LCAT (Logistics cost added tax) as Supply lines are longest for consumer good & spread all over the world. It could have been good when WWII was over & cost of imports much less due to depression in all those countries that were liberated by American forces & their economy was in shambles & in state of extreme depression. As those countries have come up by now & their economy stabilized with no war or extremism acts, now they are developed economy & making higher profits by exporting to America. With most American manufacturing off shored after WWII and consistent engagement of US forces abroad in various wars or battle operations, America lost most of its revenue & resources while other nations without engagement in any war or operation globally, saved much of their resources & went ahead to better & progressive economy. It is time that US too adapt to realistic & determined policy with new tax code conditions, start own manufacturing & add VAT like taxes till debt is paid off, economy stabilized & jobs regenerated & industry grows stable. Revision of tax code can do a lot to improve taxation code & reduce corruption loop holes and improve moral bearing in industry.
Before anyone sounds off against the US tax code, they should carefully examine foreign tax codes that often very fundamentally do not work. Our US tax code is basically voluntary and much fairer than any of the many foreign tax codes that I have examined closely. It is well delineated and people and governments arou d the world are jealous of our system. As US Persons, we should all be very cautious and careful about what we wish for. Carpe diem.
http://www.fairtax.org 20 million in research on the subject. HR 25 SR 13 are the legislation to review. be informed! If hate the current code come up a with a solution or look in to those that are out there. If you can't support the current code the don't defend it.
Wholly crap I thought I reviewed what I was typing! http://www.fairtax.org has 20 million in research on the subject. HR 25 SR 13 are the legislation you can review. Be informed! If you hate the current code come up a with a solution, or look in to those that are out there. If you can't support the current code the don't defend it.
The un – fair.tax is regressive, look at http://thetransactiontax.org - and it didn't take 20 million in corporate money to come up with it. (It is based on the APT Tax, which is based on the research of a conservative economics professor.)
"American’s consume too much, often using credit and leverage to do so. A consumption tax would moderate this behavior"
Therein lies the problem. We have a consumer-based economy, slowly clawing its way out of a deep recession. This is a recipe for slowing spending.
Now, I think slowing spending and encouraging savings and investing is a GOOD thing. A national sales tax would be GREAT. But we have to lay the groundwork by shifing our economy away from consumerism, to something else. Manufacturing? The government doesn't seem to want us doing that, and we can't compete with China and India and their near-slave wages. We're certainly not going back to being an agrarian society – we've got to get creative and find something new, something constructive on which to base our economy.
Thank you Fareed. I always read what you write and consider you the smartest, and most unbiased journalist on the national scene. I just hope our politicians read this and take it to heart.
O the tax system is corrupt in this country. I live in NY state, the motto of NY is "Tax us to Death"
If you want corruption and bribery to be continued to be legalized, support Washington DC and tax codes. If you want people to root out corruption, support lower flat tax AND closing of loopholes TOGETHER. So that corporations (INCLUDING UNION) can spend their time more productively. When a liberal like Zakaria says tax codes stink, listen to it. It means something. Ask Warren Buffet and see what he says. He may disagree this time because he cannot manipulate the system anymore.
European and canadian system of taxation dont work for free enterprise system. VAT taxes the public in general instead of taxable areas. Fareed has hidden agenda and he works for a foreign country. I wonder which one....hmmmmmmm
Some of what Zakaria writes about is very true, but the taxes levied in Europe are value added taxes and not sales tax.
So I gotta submit the author isn't as familiar with taxes as he lets on.
What we need is not a national sales tax, but a flat tax with a large personal deduction but very few other deductions.
Ah, finally something I can absolutely agree with Fareed on...
I'm in my prime working age. I believe a VAT, flat, or consumption tax is the answer. People in retirement can comlpain all they want, but it is their age group (incl my parents) that benefited the most from the gov't spending that led us to our current economic situation. To retire at 50 years old and then complain about HAVING to live on a fixed income is complete bs. Complain all you want. Get a job and pay taxes. I'm tired of funding your SS checks as I will never see a penny of SS when I retire. You should be sending me thank you notes for paying for your retirement.
better the US should have an independent media. sadly, all but one are biased towards the left.
orwellian?slippery slope? you bet.
I agree with Zakaria on this one. Folks, you need to get past your emotions and understand the fundamental point that he's making. The present tax code allows, in fact supports, ridiculous corruption and waste, and we ALL end up paying for it.
To those of you who think a flat tax is "regressive" think again. Food, essentials, etc. are not taxed now AND what is vs. is NOT taxed could certainly be adjusted as necessary. But taking consumption of non-essentials to a higher degree, changing income tax to largely a flat tax, and then taking all that money that is no longer wasted or being used for "legal" bribes and using it for better purposes would be a VERY good thing.
The big problem we've got here is that we're looking for "easy" solutions rather than the solutions that give us the biggest bang for the buck. We're arguing about how to pay for healthcare and whether we have Obamacare or not, and yet we're doing virtually NOTHING about waste and inefficiency in health care. Try, just try, to find anyone (and I do mean ANYONE) who thinks that the health care system in this country is even reasonably efficient. We'd find money beyond our wildest imagination if we could just tackle some of that inefficiency and waste. And there's way more where that comes from. Unfortunately, that all starts to hit the pocketbooks of politicians, their lobbyists and SIGs, so we're left with the "far out" solutions that we all argue about. What ever happened to the "no brainer" things that we could ALL agree need to be done? They're still out there, waiting for us...
a VAT is a way to get money from those with illegal income (recreational pharmacuticle community comes to mind). It also get money from tourists that are visiting the USA. The USA does have a big tourist industry. If I go to Europe, I am paying their VAT for any purchases I make, yet I don't reep the benefits of those taxes. OK, maybe subsidized mass transit, or if I attend a public event if I use these things. Everyone needs things and will buy locally, so they will pay these taxes. It is more fair than the income tax. The author is right in that tax income or use a VAT. If both exist, both will increase due to the government power grab.
الناشطون وصفوا الأسد بأنه حريص ويلغي ما يكتبه من صندوق الإرسال بشكل مستمر (وكالة الأنباء الأوروبية )
نشرت صحيفة ذي غارديان لائحة بأهم الشخصيات التي ورد ذكرها في ثلاثة آلاف رسالة إلكترونية حصلت عليها، والتي تقول الصحيفة إن جزءا كبيرا منها نسخ من البريد الإلكتروني للرئيس السوري بشار الأسد sam@alshahba.com. وتصف الصحيفة الشخصيات التي تبادلت الرسائل أو لها علاقة بهذا العنوان البريدي بأنها مجموعة صغيرة ولكنها متنفذة وهم كالتالي:
بشار الأسد: يقول الناشطون إن الرئيس السوري بشار الأسد يستخدم اسم "سام" (Sam) كاسم حركي في مراسلاته عبر الإنترنت. وقد لاحظ الناشطون -الذين راقبوا هذا العنوان لشهور عديدة- أن صاحبه شديد الحذر ويتمتع بحس أمني عال، ويقوم بمسح الرسائل الصادرة سريعا.
أسماء الأسد: زوجة الرئيس السوري، وتستخدم بريدا إلكترونيا تحت عنوان ak@alshahba.com للمراسلة مع العنوان المذكور والحرفان الأولان يرمزان إلى عالية كيالي معلوف. وغالبا ما خاطب sam@alshahba.comصاحبة الحرفين AوK بعبارة "عزيزتي أسماء".
ويعتقد الناشطون أن عالية كيالي الحقيقية ليس لديها حق الدخول إلى العنوان، ولكنهم لاحظوا أيضا أن صاحب هذا الحساب لا يتخذ إجراءات أمنية عالية مثل صاحب الحساب "سام". وتصف الصحيفة المراسلات بين العنوانين البريديين أعلاه، بأنها تنم عن شخصين يرتبطان بعلاقة زواج، ولكن علاقتهما ترزح تحت وطأة ضغط العمل الشديد، ولكن على أي حال فإن المراسلات بين الطرفين لا تنم عن اكتراث بالعنف الدموي الذي يجتاح سوريا.
شهرزاد الجعفري: ابنة السفير السوري لدى الأمم المتحدة، وهي في بداية العشرينيات من عمرها. ويعتقد أن الجعفري وبعد تخرجها من الجامعة في الولايات المتحدة، عملت متدربة في مؤسسة براون لويد للعلاقات العامة في نيويورك بالولايات المتحدة. وبعد عودة الجعفري إلى دمشق، سرعان ما أصبحت من المقربين من الأسد وأعلى مستشاريه الإعلاميين.
ويقول زملاؤها في مؤسسة براون إنها استمرت في التواصل معهم، واستخدمت علاقاتها مع المؤسسة لتحصل على ثقة الأسد كشخصية لها خبرة في مجال العلاقات العامة. إلا أن إحدى الرسائل التي تبادلتها الجعفري مع مسؤول رفيع المستوى في المؤسسة أظهرت دعمه للجعفري والأسد، ولكن المؤسسة بررت ذلك بأن كلمات المسؤول لم تكن سوى كلمات تشجيع لمتدربة سابقة في المؤسسة، وهي لا تعني دعما للأسد.
هديل العلي: مستشارة صحفية إلى جانب الجعفري، وتتمتع بحظوة لدى الأسد وتأخذ على عاتقها كتابة تقارير عن الصحف اليومية وطريقة تعاملها مع الشأن السوري، ووقع خطابات الأسد على المناصرين، بالإضافة الى تأمين إيصال طلبات مقابلة الأسد من صحفيين يعتبرون مقبولين لدى النظام.
لونة الشبل: مذيعة سابقة في قناة الجزيرة. تقدم دعما قويا للأسد وقد تكون من أشد المطالبين بانتهاج أسلوب متشدد إلى أكثر حد مع المعارضين السوريين. كما تقدم المشورة بشأن كيفية إبقاء الانتفاضة تحت السيطرة.
خالد أحمد: أحد اللاعبين الأساسيين في المراسلات، ويقوم بتقديم تقييمات منتظمة عن الوضع المتردي في حمص. وهو مكلف بمهام إشرافية بوصفه مسؤولا سابقا في المنطقة التي تضم حمص. ويعتقد أن لأحمد صلات بالحزب القومي الاشتراكي السوري الذي ظل ومليشياته لمدة أربعين عاما من أشد المناصرين للنظام السوري. ويردد خالد رواية النظام أن هناك إرهابيين إسلاميين مدعومين من الخارج يحركون الانتفاضة السورية.
حسين مرتضى: رئيس قناة العالم التلفزيونية الإيرانية، ويتمتع مرتضى بصلات قوية بإيران وحزب الله ويقدم النصائح والمشورة للأسد بشكل مستمر، ويدعي في مراسلاته مع "سام" بأن ما يقوله يمثل وجهة نظر إيران وحزب الله. ويعتبر مرتضى عنصرا رئيسيا في تسويق رواية النظام عن ما يجري في سوريا.
A translation would be nice. Most of us in the U.S. cannot read what you wrote. Anyone read Arabic and can translate this guys post?
The big problem here are state taxes – income and sales tax. If you add those onto current taxes, we have too much. People writing about all our tax problem and inequities ignore this, but it can be high.. FOr instance in California, the top tax brackets for income are around 10%, and sales tax is around 9 1/2%. Too much government adds up.
And California politicians want to add 3% on top of the income tax, "temporarily" (bull$4!t, when is a temporary tax ever temporary?).
When will it stop?
http://www.fairtax.org/site/PageServer?pagename=HowFairTaxWorks
The current federal income tax system is clearly broken - unfair, overly complex, and almost impossible for most Americans to understand. But there is a reasonable, bipartisan alternative that is both fair and easy to understand. A system that allows you to keep your whole paycheck and only pay taxes on what you spend.
The FairTax is a national sales tax that treats every person equally and allows American businesses to thrive, while generating the same tax revenue as the current three-million-word-plus word tax code. Under the FairTax, every person living in the United States pays a 23% national sales tax on purchases of new goods and services. This rate is equal to the lowest current income tax bracket (15%) combined with employee payroll taxes (7.65%), both of which will be eliminated.
رسائل البريد الإلكتروني كشفت عن شغف أسماء الأسد بالتسوق(الفرنسية)
قالت صحيفة ذي غارديان البريطانية إن أسماء الأسد كانت تنفق عشرات آلاف الدولارات على التسوق عبر الإنترنت بينما كان الرئيس السوري بشار الأسد منهمكا بتنزيل الأغاني على آي باد وتبادلها معها ومع الأصدقاء.
وكشفت الصحيفة عن تفاصيل دقيقة تتعلق بالأسد وزوجته أسماء، وذلك بعد التمكن من اختراق بريدهما الإلكتروني الشخصي، على أيدي ناشطين معارضين، وفي حين كانت جل اهتمامات الأسد بتحميل المواد الترفيهية وإهدائها لزوجته وأصدقائه، كانت زوجته أسماء مشغولة بالتسوق عبر الإنترنت.
وأوضحت الصحيفة أنه بينما كان الصراع يحتدم على الأراضي السورية، كانت زوجة الرئيس الأسد تنفق مئات آلاف الدولارات عبر شبكة الإنترنت لشراء البضائع، وكان الأسد يتبادل روابط لمواد ترفيهية مع أصدقائه عبر جهاز آي باد، وأنه قام بتنزيل ملفات موسيقى عبر برنامج آي تونز.
وقالت ذي غارديان إنه بينما كانت المدن والبلدات السورية تتعرض للقصف بالمدفعية الثقيلة وراجمات الصواريخ كان الأسد يرسل لزوجته أسماء أغاني لمطربين غربيين.
مطرب أميركي
وأوضحت أن المدن والبلدات السورية تعرضت لقصف شديد بمدافع الهاون في الخامس من فبراير/شباط الماضي، مما أسفر عن مقتل وجرح المئات من السوريين، وأن مجلس الأمن كان يخطط لاتخاذ قرار ضد من وصفته بالدكتاتور.
وأضافت أن بريد الأسد الإلكتروني يكشف عن أنه في اليوم التالي قام بإهداء زوجته أسماء أغاني للمطرب الأميركي بليك شيلتون، وأنه قام بإنزالها من "آي تونز"، وأن بريد الأسد لم يعكس الحالة الدموية والاضطرابات التي تشهدها البلاد.
وقالت إنه لا يبدو أن حياة الأسد وعائلته والدائرة الضيقة المحيطة به كانت تبدو وكأنها تقود البلاد الثائرة من حولهم، موضحة أن مطلع إحدى الأغاني كان يقول "لقد كنت أمشي مكسور القلب، لقد زججت بنفسي في الفوضى، فالشخص الذي كنت أمثله في الفترة الأخيرة، ليس هو الشخص الذي أردت أن أكون".
وأضافت الصحيفة أن الناشطين اطلعوا على عشرات الرسائل الإلكترونية الخاصة بالبريد الشخصي للأسد وزوجته أسماء، والتي تظهر كيف أن زوجة الرئيس كانت تنفق عشرات آلاف الدولارات في التسوق عبر الإنترنت.
وقالت إن أسماء الأسد كانت توقع على مشتريات ثمينة من الأثاث المصنوع يدويا والمجوهرات والأحذية الغربية بالرمز "AAA" وأنها كانت تشتري لها ولبعض صديقاتها، وأنها كانت تعيش حياة بذخ وترف.
وأضافت أن بعض التجار الأوروبيين لا يعرفون أن المرأة التي تتسوق من محالهم عبر الإنترت هي السيدة الأولى لسوريا، ولكن بعضهم قال إنه يعرفها أو أنه قابلها مرة أو أكثر، وأنها كانت لطيفة جدا في التعامل مع التجار.
وأشارت الصحيفة إلى تفاصيل العديد من الرسائل الإلكترونية التي أرسلها الأسد لزوجته ولآخرين، وإلى أن الرئيس السوري بدا متأثرا بالأحداث في ظل تفاقم الأزمة في البلاد.
فقد كشفت عن أن بعض الرسائل الإلكترونية التي أرسلها الأسد لزوجته كانت تقول "إذا كنا أقوياء معا، فنحن سنتغلب على هذا معا. أحبك".
كما أرسل الأسد رسالة أخرى في 23 يوليو/تموز 2011 يصف فيها روبرت موردوخ بكونه يهودي وإسرائيلي وأنه شيطان.
Thats nice,now how about in english.
America needs a one sentence tax code – either "Pay X% on all income above $Y," or "The national sales tax is Z%."
Not both, pick one – an income or a consumption tax.
Taxation is theft.
Taxation is NOT theft, it is the price you pay for you freedom and citizenship. If you don't like paying taxes, move somewhere that has none, like Somalia.
And when you have no reliable or safe water, electricity, transportation or security, see how long your business lasts. And no, stocking up on Kalashnikov's will not solve your problems.
People who deny the need for taxation are infants, plain and simple.
It is theft. It is not the price you pay for citizenship. It is the taking of property by force and without consent. Now unless the definition of theft has somehow changed, that is clearly theft.
Water, fire protection, police, etc. can all be provided without theft. People who cry for theft to have those things are uncivilized thugs and have no place in a civil society.
I'm tired of hearing about payroll taxes and the working poor. These payroll taxes are paying for their old age sustenance and medical. The poor will receive far more in benefits than they will ever pay into the system and would probably have nothing without it. The SS system is a highly progressive system in which the payout is skewed to credit the lowest range of earned income with the highest payout and the higher range of earnings with lower payout.
Fair Tax much better approach. Please read and support.
http://www.fairtax.org/site/PageServer?pagename=HowFairTaxWorks
This is tax simplification snake oil. Sorry, I recall when Fareed was sanguine and reassuring about what a good idea the Iraq war was. An income tax is the best and fairest way to collect revenue.
This is just typical smarty-pants tax code bashing. The false pied piper's tax appeal - for even someone as smart as Fareed - is this siren call of "simplicity" and "lack of corruption."
Pass a VAT and all will be beautiful with the world? Well ...
Did Fareed just say a flat tax was working well in Russia? I notice their corruption levels and tax collection problems are off the charts. There is plenty of room for corruption in a VAT or national sales tax. What is exempt, what isn't etc.etc. And Europe has far flatter income distribution, so a VAT there is FAR FAR less regressive.
In America we have wide income disparities and so need widely differing tax schemes.
Taxing a person who makes $40,000 a year and has to spend it all is totally unfair compared to millionaires who actually spend far smaller portions of their income.
A poor person could end up paying taxes on 50% or more of their income, while a wealthy person would pay taxes on only 10% or less.
Fareed's proposal is an obscenity.
Many of the comments posted only concerns income tax. Payroll taxes, which provides nearly the same amount of revenue to the federal government, should be part of the discussion. For the most part, this tax falls heaviest to working Americans. For example, a self-employed person, depending on his situation, may not have any income tax liability but will pay nearly 13% in payroll taxes. If it wasn't for the payroll tax relief, this person would pay nearly 15%, or about the same as Mitt Romney's total tax, before paying any income tax.
For a much better system that ends all the insanity and waste in the tax system, please go to Youtube and search on "FairTax Questions and Answers". You will find it very convincing if you give it a fair hearing.
Read it, don't find it compelling at all. Read http://thetransactiontax.org and http://apttax.org
It is reassuring that Zakaria is an expert on just about every subject under the sun.
The Washington elite disfavor FairTax because it strips them of the power to coerce and covertly redistribute via the tax system. The FairTax is a much more transparent, fair, and less burdensome system that eliminates the IRS and addresses regressivity. This is a vastly better system. Please take the time to consider it. Youtube: ""FairTax Questions and Answers".
Look at their web site. It only addresses regressivity at incomes of less than about $50,000. Fairtax is very regressive above that level. Regressive tax plans are rewards for the rich and increase their disposable incomes. These rewards should compel them to contribute more of their income to government services, but this doesn't happen. The GOP's plan is to let them keep their riches, which will somehow be used for the benefit of society. However, because the GOP or the rich have no theory, plan, or organiziation to do anything good with the money, it can be spent on anything. This is just a helter-skelter approach to economics, which won't do anything predictable except put even more money in the hands of the rich and provide less badly needed services for the American society.
I absolutly agree. The simpler the tax code, the less it can be taken advantage of.
Tax collection should be left entirely to the states. As such, the new federal tax code would read: Each state, district, territory or other subdivision of the United States shall pay monthly proportional to the number of US representatives (minimum 1for unrepresentated areas).
This allows Texas to collect via property tax, California by income tax, and another state to collect by a sales tax. may the states choose wisely.
Exclude food (which IS an excemption, but a very rational and effective one at making a progressive system) and we are game with a national flat sales tax and no income tax for persons (income tax for companies is a different subject, and it should be flat, with no exemptions).
But that won't fly, as many people would be benefitted by the plan as they would be hurt, so it is a politically impossible move.
A more efficient roadmap would be to close all loopholes and have to negotiate every single one that needs to be reopened in a public, open process. We would end up with tons of loopholes but only a tiny fraction of those that are there today.
I cannot even understand the grammar of some of these comments. Perhaps we need to start investing again in education with some of this tax revenue, less any argument will be one of incoherence.
Question about a VAT: If I decide to pay more for a product made in the US, I would pay more tax on it, right? How does that help keep jobs here in the US?
There are some really crap calculations here! Really? I'd give ANYTHING to pay ONLY 15% of my income to taxes. The average American pays more than 15%! Payoll including the Social Security TAX, California State Income Tax, IRS, and State Disability Insurance TAX, all of this equates to nearly 20% of your income directly off the top of your paychecks every month. Then lets do a little more here to show you how much you REALLY pay in taxes, (Legalized Extortion)! Sales Tax: 8.25% on the dollar. Federal Fuel Tax: 28 Cents per Gallon. California Fuel Tax: 37 Cents per gallon + 8.25% Sales Tax. DMV TAXES and FEES average is about $200.00 per vehicle, per year. Sales Tax @ 8.25% for Cable, Phone, PG&E, (plus their user fees). By the time you add up how much TAX you actually pay to your relative Government it's really a wonder that you have anything left to actually save and live on. Your total taxes per month is closer to 50% of your income, and at my last figure is actually closer to the 60% range. And... I really have to laugh. Our Governments are having a hard time finding money to fund their services? Bahh Humbug! They need to be chopping some of those 6 Digit Salaries at the top that are over $150,000.00 per year, and placing that saved money back into the tax reserves! Nuff Said, do your math!
Really? So the article is seriously suggesting that the way to improve taxation in America is to move to a flatter tax (more regressive), and consumption taxes (more regressive).
Zakaria, I find your foreign policy articles thoughtful and interesting. I find this article incompetent and simplistic. You aren't an economist, and your analysis is beyond superficial.
Actual dollars and cents matter to real people in the real world. A 2 page tax code that can't incentivize upwards mobility might "solve" the problems you find important but I don't think it's going to put food on the table of a poor family.
The current tax code amounts to welfare for the rich.
And suddenly Mitt Romney's wife will have to pay tax for her two (2) Cadillacs. And she will not be able to write-off the $4 Million annual gift to the Mormon Church.
Hey Zach.. you need to toe the CNN line.. they are zealots for Obamba.. you just spouted mire anti Obamba rhetoric.
The issue of a better tax code could be tied to the recent bipartasan wars in Congress. Obama has asked for an reduction in the loopholes for corporate America and the GOP( especially Tea Party loyalist ) have vehemently opposed this. If the tax codes were revamped,wouldn‘t that go against conservative beliefs the government should free reign to business and not interfere?!
I'm not sure a flat tax with no (or only a standard) deduction would be that regressive. If we also tax income from dividends, capital gains and inheritance at the same flat rate as salaries, it would increase the rate paid by the Romney's of this country, unless the rate could be lowered to less than 15%. And wouldn't that be nice!
Sid
If all the exemptions, loopholes, and other exceptions were removed from the tax code, it would be simpler and shorter. How many pages deal w/tax breaks for a couple dozen sugar beet farmers dating back to the Cuba embargo; a couple dozen Idaho wheat farmers going back to Russian grain sales; a couple dozen oil drillers dating back to the Arab oil embargo? I don't like the VAT(so-called fair tax). It's European.
"One recent OECD study showed that the top ten percent in America pay a larger share of total taxes, 45.1%, than do the top ten percent in any of the 24 countries examined. In Germany they pay 31% of the taxes, in France 28%."
This is also deception. US has the widest income gap of any of those countries. Therefore the top 10% should pay a higher percetage, which is their fair share. "Fair share" means their tax rate is according to their ability to pay (contribute). If the top 10% have 45% of the personal income, they should pay 45% of the personal income taxes. If that means a tax rate of 50%, that's the rate that they should pay.
Two Page Tax Code: Sorry, the Republicans will never allow a straight forward tax on people like Romney and the 1% Club.
The top 10% should pay(contribute) personal income taxes at a rate that they have the ability to pay, at least in proportion to the percent of the country's total personal income. However, their share of total taxes should be determined by their gross income, not taxable income.
The deductions and loopholes are highly political. Take the marriage penalty for example. About twenty years ago, the tax rate for married couples was higher than for singles. This was because of a practical purpose. Married couples lived together and shared in the cost of the home and many other expenses. So they had more ability to contribute to the government. Then politicians noticed that people were living together, without getting married, to avoid the "marriage penalty". Politicians then got on their soap boxes and promised to eliminate the " unfair" marriage penalty.
Now the situation is reversed. The marriage penalty is now the "singles penalty". Singles pay a higher rate than married couples. How is that fair? How does it relate to the original married tax rate, where it was assumed married couples have more ability to pay? Does it mean that singles now have more ability? No! It's entirely political and fueled by deception, popular opinion, scams, and market-based journalism.
This is EXACTLY what Paul Ryan and the Republicans have proposed.
Fareed,
You have been reading my comments I been writing for years. But remember, the best is the “VAT’. Also, do not let the ones who will say, “Our Income Tax actually allows the world help pay our taxes”, interfere. Prepare and make them look stupid.
The "Fair Tax" http://www.fairtax.org/site/PageServer?pagename=HowFairTaxWorks is a scam.
It's based on the notion that "fair" means the same tax rate everyone, close to a flat tax. This is regressive and is a phony definition of the fair. Fairness based on the same tax rate (income or consumption) for everyone, even with the rebates, is pure deception. It's shamefull that politicians prey on the public's ignorance by trying to convince us that just because the percent numeral is the same for everyone, that it follows that it is fair.
The only fair system is one where people pay according to their ability to pay. This means a low rate for low incomes and a high rate for high incomes. Deductions, exemptions, and other loopholes should be delt with so that the tax rate reflects the ability to pay personal income taxes. If the top 10% have 45% of total income, they should pay 45% of total personal income taxes. That would be fair! "Fair Tax" doesn't approach this. The Fairtax web site tries to justify their theory by claiming that the revenus will be the same as with the current system. It completely ignores the regressivenes, where the rich will retain more disposable income and the middle class will retain less.
Mr. Zakaria, the problem facing America today is not the complexity of the tax code, but what that complexity serves: the increasing concentration of wealth.
The concentration of wealth is the cause of all our problems.
A tax code that does not address the concentration of wealth is simply part of the problem.
A flat tax contributes to the concentration of wealth.
A progressive tax, which will essentially cap income and wealth, is what is needed.
"The U.S. tax system is not simply corrupt, it is corrupt in a deceptive manner that has degraded the entire system of American government."
The first and best reason for tax code reform.
Fareed Zakaria... I find it hard to believe that I agree. The current tax code is nothing but a scam. A flat National Sales tax is needed... ZERO income tax. We are a consumer society so lets tax at the point of consumption. Let the savers save with a whole pay check and let the millionaires pay taxes on their jets and yatchs. Penalizing and demonize folks who actually make money in this world economy is no way to run a country. A progressive income tax is the worst kind of tax as it gets progressively higher and puts unfair tax burden on the top end earners. It's not their fault they make money... do we all not want to acheive success?... you get to a point where the earners would rather earn in other places and this pushes foriegn invest away from the U.S.A. and makes U.S. investorts look for havens.
Income tax is not a penalty. It's a contribution to government that is needed to secure freedom, health, saftey, etc, for society. This contribution is largely determined by a democratic process in USA, which partly determines it's fairness. Rate-based fairness is phony. Those with ability to pay more should pay more.
right on brother!
Bunk. Big government Nanny State Bunk.
Just like your payment to the mafia for them to not torch your business is a contribution.
"Fairtax" completely ignores its regressivenes, where the rich will retain more disposable income and the middle class will retain less. What's fair about that? If Zakaria wants to do something useful, he needs to expose the DECEPTION of rate-based fairness.
Why lower income tax? Eliminate it all together. Replace it with a Value Added Tax. Do away with IRS no longer needed employees. This would eliminate all loopholes, be a totally flat tax, and make the rich pay a more fair share. Since they buy more, they pay more. The very poor would get stams with which thys pay a reduced tax, only until they get themselves out of the rut through training in technology. We save money, help the poor get better jobs, help the industry with a better labor force and eliminate a bad tax code. Farid: why so timid? Why not go all the way?
I would echo disbanding the IRS, if another tax collection method is used. However, I don't think any politician would want to be a part of laying off the bureaucracy that is the IRS. Those lay offs would add to unemployment numbers... bad for reelection. Are there enough brave souls in Congress to bite that bullet? Maybe not now, but if we vote in ones who pledge to do so, maybe by the time our kids have kids we won't be zoo overburdened by complexity... it's a dream, huh?
I worry that even a revised simplified code will only become bloated over their lifetimes.
sorry, new keyboard
Actually, I don't care how many pages are in the tax code, the part that burns me is that the gummint already gets copies of absolutely every report I get (W-2, 1099, etc). They already know absolutely everything they need to know to compute my taxes, so why am I required to do it for them, just so they can nit-pick and say I did it wrong in case something doesn't match? I just want to send in one of those postcards Ronald Regan talked about that says "Yep, you know everything – I had no additional sources of income you don't already know about".
Tom,
They need you to verify that the W-2 is true and correct. The system is self-assessment.
What you and everyone else needs to understand is what was written in the Current Tax Payment Act for withholding at source.
Ignorant people should be taxed at a higher rate. They can start with Palin and her merry little band of baggers.
Do we really want to copy the European systems? They are going broke and bailing each other out. The VAT tax is a ripoff IMO and regressive. So, Fareed proposes that we copy it? I live in Washington State and we have a sales tax and property taxes but no income tax. The politicians here keep saying that an income tax is more fair, balanced and progressive than our sales tax is. Truth is they just want more revenue. But the people keep voting no to a state income tax here. Some form of flax tax might be OK but the VAT tax is a very bad idea. Usually proposed by those in government that really just want more of the average citizen's money.
I forgot to mention that in our neighboring state, Oregon (to the south of us) they have an income tax but no sales tax. So, their politicians keep saying that they need a sales tax because their income tax is unfair and does not produce enough income during downturns in the economy. Many in our state see the irony these opposite arguments between the two states. Truth is both states would like to have an income tax and a sales tax. More revenue is really what they want. I doubt the legislators and that concerned with fairness.
The principal problem with a VAT (national sales tax) is that when levied on necessities (food, clothing, medicine, fuel) it is terribly regressive unless some sort of exemption process based on income is applied, thereby negating much of its possible benefit.
Bingo. Necessities have to be accessible and affordable to all; how to make that happen with the least interference from government is a tricky question. VAT is very appealing to me if this concern can be addressed intelligently.
Seldom do I agree with what Mr. Zakaria has to say, but he finally gets it right. The US must move to a consumption tax, a national sales tax, and abolish the FIT. We must find a way to capture the unpaid taxes and stop putting in place killer taxes on certain industries. And giving away money to those who donate funds to the criminals......er I mean politicians.
A national sales tax is so much more efficient. Productivity would increase greatly as we eliminate the need for tax lawyers and many accountants. The IRS would be reduced by 70%, and April 15th would disappear as well.
Have you ever stopped to think why we file taxes in April and vote in November? If we voted in May, one month after filing our taxes, we would never vote for the worthless bums in office. With elections in November, seven months after we had to pay taxes, we have mostly forgotten about the gross amounts that we pay.
We must move away from the FIT and to a simple national sales tax.
I'm not in favor of a national sales tax in general, as I think the last thing the government needs is more money to waste. However, I do agree with Fareed that we need a massive overhaul of the tax code and I would be willing to accept a national sales tax if it was part of a much simpler tax code, so long as it did not significantly increase my taxes in general. For example, if we were to replace the income tax with a national sales tax of say 15%, that would be fine with me. But if we are going to keep the current tax system and then add a national sales tax on top of that, no way!
Ah, one of the liberal left propogander machine mouthpieces spews his dribble once again.
Rick... typical bagger. Doesn't know how to spell. " PROPAGANDA "
Please see my post above suggesting that ignorant people be taxed at a higher rate.
I have never seen such an uninformed article from Zakaria. Progresive taxes built this country in the 50's and 60's. Quality of life and progressive tax systems go hand in hand. Suggesting that countries in Europe are more regressive demonstrates absolute ignorance on the subject.
How much better would life be if we weren't stolen from (taxed)?
FairTax = HR 25 & S 13.
Zakaria is a lame brain.
I agree! Our tax system is WHY to complicated, but that is the way our government likes it. That way, they can put in as many loop holes for those they want to give breaks to. A simple system is way to easy and makes to much sense. Our current government does not have the capability to see this or the will to change to an easy, simple, and short tax system that saves Americans money by decreasing the size of the IRS, and a fair system to where EVERYONE pays their fair share regardless of income, influence, or connections. Sorry, our government is broken and no longer effective so it won't happen.
I actually disagree. The current income tax and its exceptions are largely what encourage philanthropy in our country. We would see much less of it with a sales tax.
Sam l – I think I see your point but if you want to encourage philanthropy why not advocate for minimizing taxes and then let people contribute their windfall to whatever charity they want? Answer: You want to force other people to contribute instead of letting them decide for themselves. The people just cannot be trusted.
That complicates the issue. If you want to be philanthropic, you can do it on your own.
Tax code for personnel income tax.
Total all imcome, earned and un-earned, Send in XX%.
All of you worried about copying someone else, consider this: Knowing that nothing is perfect, if you have to choose a system, wouldn`t you choose the system which will cost less to maintain, while decreasing or eliminating all loopholes? If your answer is no, perhaps you should ask Scotty to beam you to anther Planet.
So far so good Fareed...but I notice that you stop before giving us your the rest of your opinion, which is to implement a VAT so that everybody pays, except that then there will be some convoluted refund= give away = vote-buying-pay-off to the "dis-advantaged" poor souls who can't afford to pay the VAT. And then we are right back where we started with coruption – except that now we have an additional revenue stream that can be corrupted and will simply feed the bloated fed gov.
Also, instead of payroll deductions, citizens should have to pay their taxes at the end of the year in a lump sum payment to the IRS. This will bring much needed focus to exactly how much money each individual pays in taxes. Right now people get their "refund" and think its a bonus because they never really know how much they paid out all year long. Sure its on your pay stub, but it doesn't really sink in until you have to write out a check.
Paying taxes is never hard for those who can afford it. Do you expect the guy living hand to mouth to write a check just to feel some political pain?
You say that 50% of the people don't pay income tax. This shows that you do not know how the tax works.
The income tax is a hidden tax passed on to the consumer by the business community.
When a business figures its costs in determining the pricing of its goods or services, the income tax it projects it will pay is one of the costs.
finally something Zakaria and I can agree on.
2-page tax code (The 1st page being a picture of something)
Flat 10% across the board!
No tax breaks for rich OR poor.
Noo more social engineering by means of tax break rewards.
ex:
1) Have more kids and get more money from the government!
no breaks for anyone means no possibility of corruption.
Where on the 2 pages are you going to have the information for filing the hundreds of possible miscellaneous reports such as form 8938 (foreign financial assets) or form tdf 90-22.1 (foreign bank accounts) or even schedule C for self-employed persons including tip income?
Yes, by all means, let us follow Estonia and the Czech Republic into a brighter future. Coming soon from your government: The Tax Code for Dummies (that's you). Complete with scenes like, "Hey, you, the mother of four whose husband just got killed in that car accident that took your legs! Yeah, you! No exceptions, pay up or move out!"
I dont know why you people are arguing about this. the people who would be the ones changing the tax system are the same ones that have EVERYTHING to lose by changing it (politicians). Nothing will happen, whine all you want but career pol's are not going to do something to destroy everything they've built for themselves.
Fareed writes: "You have to understand, complexity equals corruption."
Of course it does, that's why the US tax code has been written that way. Like the designers have told us in other segments of our daily lifes, "let the industries regulate themselves" because that is what works best – yeah, for the industries.
The funniest thing about the US tax code, which isn't funny at all, is that there is not one single person that understands it all. Again, by design. Take real estate, take health care... there isn't much left that the so-called "job creators" (mega-corps, the super-rich, and their lobbyists) haven't messed with to make American lives more difficult and more expensive. The entire point of US-style capitalism is the transfer of wealth. And when it comes down to it, comparatively speaking, taxes are easier to figure out than most of the other stuff.
This is an impossible dream. There is no way the corrupted congress will vote themselves out.
The goal for filing income tax ought to be the back of a post card, i.e., total income x 15% = tax due. No national VAT.
A flat tax and consumption tax is not "regressive." It is equal for all. If all income is taxed at the same rate for all Americans, then we tax all Americans equally. What is wrong with that? Last I checked, I don't get an extra vote for my higher tax bracket.
What's wrong with it is that we'd still be taxed!
Taxes are necessary to operate the government and provide services. The extent, distribution, and efficiency of those services is another debate for another time.
My statement is simply that equal taxation is not "regressive." That is an evil sounding word applied by pundits wishing to push an agenda. Consumption taxes are inherently equal. If person A buys a widget for X cost, they pay the sales tax on that widget. If person B buys the same widget as the same price, they pay the same tax. You can't get much more equal than that.
Yes, there are income inequalities in the world and in the US. So what? That is how the world works. Attempts to equalize income by takings of property (including wealth) smack of Marxism. We all should know how well that tends to work out.
How do you expect to drive on roads, have lightpoles maintained or fund a military if no one is taxed?
Government is evil and unnecessary. Everything should be private. Government is based upon the initiation of force, which makes it no better than someone who robs you at gunpoint.
"Perks" can be taxed. If a corporate exec has the prestige of a private jet perk, that perk has a reasonable dollar value. It is a known fact that dollars do not need exchange hands for a valuable perk to exist. Another kind of perk is the prestige and fame that comes from being a major news anchor or commentator. To the people who pursue such careers, getting the attention they personally crave is worth more than gold. It could all be evaluated, assessed for income-related purposes, and taxed. The value could be, literally, in the millions. Tax it.
Zakaria is, "in favor of almost any new tax code that fulfils one requirement: It should fit on two pages". The 2-4-8 Tax Blend with the same rates for rich and poor meets the test.
For the first time in history we have the technology which can fairly and easily tax net wealth, raise more tax revenue and jump start the economy. While a 5% individual net wealth tax could replace current revenue, a modest 2% wealth tax combined with an 8% income tax would produce the same revenue and permit workers to take home 92% of their income – (real consumer power). Rich and poor would pay the same rates for the fairest system on the planet.
Business tax reform is also needed to shift the economy into high gear and to raise some additional revenue. A 4% tax on $10 trillion in sales would yield another $0.4 trillion in revenue and permit a reduction of the corporate income tax rate to 8% (with no loopholes).
Capital gains, estate and gift taxes would not be necessary. Qualified retirement funds would retain a tax exemption until withdrawn so that seniors could preserve a modest retirement.
Two pages is WAY too long. Want a simple and fair tax code? How about this.
Every person gets a personal deduction (figure $20,000, adjusted for inflation each year).
All income is treated the same, regardless of source. (I.e., capital gains and dividends are the same as earned wages, including any from foreign investments and business dealings. Corporations are now considered people, so all rules apply to them as well.)
15% tax on income above personal deduction up to $500,000 (pick a number), then 30% on all above that. You get credit for any taxes paid to a foreign country, but you don't get out of taxes altogether.
Businesses deduct reasonable costs of business (wages, materials used in manufacturer, etc., pretty much like now, but upper management pay in excess of 10 times the lowest worker hourly wage is not deductible. You can still pay it, just can't deduct it as a reasonable cost of business.)
If I write small, I can even fit it all on a 4×6 note card.
The other nice thing about a tax on consumption that isn't mentioned in the article is that a consumption tax will be able to tax black market money. If I make my money on the black market, right now, I don't pay any federal taxes. Only state and local sales taxes when I use the black market money to buy things. A national sales tax would collect billions on currently tax free money.
My respect for Frareed's intelligence dropped a notch today when he stated that the US tax code is more progressive than Europe's because the richest 10% pay a larger share of total taxes than they do in any of the other nations surveyed. This is a failure of logic, as it neglects the fact that the US also has the least equal income and wealth distributions among those countries. Our richest pay more taxes because our richest are MUCH richer. Note in the list of countries, among the least "progressive," by Fareed's definition of spreading the tax burden, are Scandinavian nations where income equality is highest in the world. Anyone not grasping this concept?
The US tax code IS more progressive than Europe's. It relies more on income tax, which is progressive, than consumtion taxes, which are regressive. High income earners bear a higher percentage of the tax burden in the US because more US government revenues come from income taxes. It's not a failure of logic, it's logic.
In this case the word "progessive" doesn't mean "liberal," it means that higher tax rates apply to higher tax bases.
Income inequality isn't something that governments should be "fixing" anyway. More government means more corruption and less freedom, even when the additional government is created in the name of "equality" or "fairness."
Mike, thanks for your reply. I see what you're saying; my comments pertain to income, not to taxation. You're clarifying what FZ said, that our tax policies are more progressive, whereas I was introducing income and wealth distribution into the discussion. I still think his list showing the share of total taxes paid by the top 10% in 20+ nations is deceptive for the reasons I stated - they leave one with the impression that the reason for this discrepancy is entirely due to tax policy. It isn't. If we had a tax system identical to that of Sweden, the richest 10% would still be paying a much larger share of total taxes than they do in Sweden because our richest are much richer relative to theirs. Inequality of income/wealth always results in inequality of tax revenue. Whether or not governments should address income equality is a huge issue so I won't get into it here.
Can someone explain this claim that 50% pay no taxes? I ran a business and had to withhold income and submit tax payments for every employee, no matter how much they made, to cover FICA and federal payroll taxes. Even unemployment benefits are taxed. So, who exactly are these 50% – or is that claim just cherry-picked political spin? Thanks for any clarification.
For 2009, approximately 47% of American taxpayers paid no personal income taxes. For those taxpayers, any taxes withheld would likely have been refunded when a return was filed. It is important to keep in mind the difference between "Taxpayers" and "Americans." You can find the stats on the National Taxpayers Union web site among other.
The claim is that 50% of Americans pay no income taxes. Income taxes and payroll taxes aren't the same thing.
As usual, Zakaria's preferred solution involves more government. Giving government another tax to raise only creates more opportunity for corruption and as Zakaria points out, a consumption tax is highly regressive.
What's even more interesting is that Zakaria recognizes in this piece that the complexity of a government program leads to government corruption, but he still wants the US to have a Medicare-style health care system for all Americans. Why doesn't he see the opportunity for corruption in that idea?
I got the impression that FZ was arguing for LESS government, by simplifying the tax code, getting rid of the schemes used for corrupting policy and policy-makers; he came out in favor of a flat tax! That was startling for me, as it is generally considered to be a very conservative point of view. As for a VAT tax, raising and lowering it would affect so much and would be so blatant, and it would affect everyone, it's simply not possible to use a political toy. Once a rate is established, changing it is a monumental feat. Lastly, I don't think a VAT tax would be regressive at all if certain necessities are exempt. At the very least, food should not be taxed. Of course I'm just guessing, it would be another matter to prove my assertion by crunching numbers!
I agree that a flatter tax code is generally a conservative point of view, but I don't think many conservatives would agree that we should add a consumption tax to a flatter income tax.
I don't think I would agree with your point that changing a VAT rate would be very difficult, though "difficult" is a relative term. I think changing the rate would be easier than establishing a VAT in the first place, and I think raising a VAT rate would be easier for most politicians than cutting spending.
I agree that a VAT could be made less regressive by making certain things exempt, but then you create the same opportunity for corruption that already exists in the tax code. Politicians will trade VAT exemptions for votes, and the people who lack political influence will end up paying a disproportionate share of VAT.
The problem is, simplicity also results in corruption. Simple solutions usually end up getting really complicated as people start to ask exactly what parts mean, and find ways to make sure that their wealth falls outside the 'simple' rule.
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Thank you, Farheed, for pointing out how the current tax code is a form of corruption. This is the first time I have heard this association, but I agree completely.
Another aspect of the current tax code is that tax of time on me as a business owner to do the financial tracking, reporting, research and time with a tax agent. I am further taxed the cost of the tax agent because I can't possibly know all that I need to for doing the taxes. I favor the flat tax VERY much.
I thought that there is a law against double taxation; but it seems to me that there is double, triple or quadruple taxation on an individual's income. When the federal government gets paid, say 30% of income (for a renter), then self-employment tax, gas tax and phone tax, aren't these all going against the same income?
I disagree that a national sales tax is the way to go, You make business owners tax collectors and put a whole new burden of tracking and reporting on them. Also, you provide a strong incentive for smuggling. With income taxes, income is also used as a basis for loans -; loans for housing or business or stock margin limit - so there is a counter-balancing force for income reporting. I don't think there is any counter-balancing force for trying to buy things without paying sales tax. I'm familiar with the academic position that VAT is the best taxation strategy but I don't agree. It's a case of ivory tower thinking that does not consider all forces involved, does not consider common sense.
I would like to see a law that sets a ceiling on taxation.
Sarah, Sara habibji, nowhere in the 4 times Fareed wrote the word "corruption" did not say that "the current tax code is a form of corruption."
1. "And then there are countries like Russia, the Czech Republic, Estonia that have innovated and moved to a flat tax, with considerable success.
You have to understand, complexity equals corruption."
2. When John McCain was still a raging reformer, he used to point out that the tax code was the foundation for the corruption of American politics.
3. For those who despair at the role of money in politics, the simplest way to get the corruption out of Washington is to remove the prize that members of Congress give away – preferential tax treatment.
4. But the best thing about tax reform is that it kills corruption.
Reread the article, and, if you need help understanding the meaning implied, ask me.
Fareed, in suggesting the tax code causes corruption minimalizes the issue. Agree the tax code is an easy vehicle for corrupt people to practice corruption but if one is inclined toward corruption another vehicle will surface whenever one is eliminated.
Many of the supposedly "corrupt" provisions in tax law were not established to enable corruption. Though an arguable issue, in itself, many provisions were put there to incentivize presumably preferable behavior or to mitigate perceived unfairness or, most importantly, to close loopholes. It is the province on Congress to write equitable tax laws and the province of business and wealthier individuals to find ways around those tax laws.
The concept of progressive taxation is justified in the works of Adam Smith, considered by most the founder of "free market" economics. One has to ass-u-me Fareed is familiar with those works but his premise belies that assumption.
I chose your response to reply, lucky you, because you mention you are a business owner and you complained that self-employment taxes are "double taxation". If your business reports as a Sub-S Corp and you are a shareholder-employee you do not pay self-employment taxes on the net profits of your company. Yes, you do pay FICA on your wages along with your company but it has long been the practice of Sub-S companies to hold down wages to shareholder-employees to minimize total payments into the SS system. Of course many other, personal type, bennies are available to you. Does your company provide you a car? Do you belong to social organizations the dues for which are paid by your company? Are those "heinous" fees you pay your tax agent packaged such that the business deducts the entire fee? Your non-shareholder-employees enjoy no such benefits.
Leading to: the bulk of the work your tax agent does is involved in calculating your business net income and that responsibility will not go away, even under a flat tax. The actual tax calculation is a piece of cake once your net profits have been ascertained, even under existing tax laws.
All in all, is it possible: Thou "doth protest too much"?
Although I agree 90 percent with this author. My opinion is the government will reform the income tax, start VAT. We will rejoice. Several years later the tax code will again start to morph into the monster it is now. So then we will be in the same situation we are in now, however have a VAT on top of it. Congress and the A...holes in government cant stop spending. The VAT will just drive us poorer while they keep spending.
1) Tax all income equally, capital gains at the same rate as other income
2) Put a tiny tax on stock transactions
3) Eliminate tax "holidays" and off-shore tax breaks
4) Eliminate tax welfare for huge corporations, like Boeing and the oil companies
5) Allow the Bush tax cuts for the rich to expire
Then we can simplify the tax codes.
Simplicity may be fine for the simple minded but this is a complicated matter not to be taken simply.
So if the U.S. switches to a consumption tax rather than an icome tax, what happens to us retired folks who paided income taxes on the money we saved for retirement. We will be taxed again as we spend it.
You are so funny habibi.
Simply too funny.
One thing that concerns me with a VAT or any form of Federal Sales Tax is that since I'm retired most of my income comes from money that I have already paid Federal Income Tax. Therefore I would be subject to double taxation at a time that I can hardly afford it.
I agree, but it shows they care nothing about seniors!
Why would anyone listen to Fareed's advice? Don't we have enough nuts spouting off about things they know nothing about (He is right in line with Sarah Palin as far as common sense goes).
You are right, let's all go back to Pakistan, Lebanon, Jordan. hehehe....
The tax code should be one sentence, not two pages. Everyone should pay a flat 15% of their income in taxes, with no deductions. That way, everyone pays their fair share. Then the rich can't complain that the poor pay nothing, and the poor can't complain that the rich find loopholes to get out of paying taxes. I know everyone would complain that their special tax benefits is gone, but that is a sign the system is fair.
Thanks Aaron. You worded it better than I.
@D... Should everyone pay 15% no matter how many children you're supporting. If your child has a very expensive health problem, should you still pay 15%? without any medical deductions?
Is that what they charge in your home land, Iraq?
A flat tax rate would sure hurt charities.
yeah, we would not want to hurt the Red Crescent. If we could not send money to our Jihadist friends, then what the hell are we doing in America.
A flat tax sounds easy and fun, but it raises taxes on the poor and lowers it on the rich. If that is what you are after, fine. The same is true of a national sales or VAT tax. Can you image asking Americans to pay 19% more for everything they buy? Can you say recession? You can make the middle class pay more taxes only if you raise their salaries. Most Americans haven't had a real raise in 30 years.
A flat 5% tax on net wealth would produce sufficient revenue to replace all current federal taxes. For the first time in history we have the technology to apply a wealth tax to rich and poor. Fair enough?
See more details at http://www.TaxNetWealth.com
@ Patrick... If your comments are directed at me, I'm not from Iraq, I'm from Massachusetts. My comments are meant to show how a flat tax can be harmful to some sectors of our society.
Yeah and the rest of the girls you hang out with, they are from Texas?
Fareed seems fond of the VAT concept and his argument implied that it would eliminate the corrupt practice of politicians handing out tax breaks for favors. Beware what you wish for. A VAT would become a bank check that Washington politicians would increase every time they had a pet cause needing funding. Secondly, they would be in back rooms trading votes for VAT increases and thus create a new political commodity.
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who is "them" habibi
Heard your essay (or whatever it was) while on the treadmill so came here to see if I heard right (I did). Everyone knows our income tax system is too complex. However, using that as a cover for pushing your right-wing tax philosophies that would further enrich the very wealthy at the expense of everyone else, is unforgivably partisan. With your lack of logic and unskillful manipulation of numbers, you really need to get a job at Fox News. Either that or CNN should stop pretending it's non-partisan.
Fareed,
Don't rely on OECD reports. It's just a club of capitalists.
That doesn't mean your conclusion is wrong.
If corporate taxes were abolished entirely the reason, `double taxation' for lower rates (0% / 15%) on dividends and capital gains would disappear. They could be taxed fully. Then people that are in a 10% tax bracket would pay 10%, and people in a 35% tax bracket would pay 35%. With just lowering corporate tax rates we just join the game all other nations are playing.
The tax code would be greaty simplified implicitly, because many current regulations would no longer be relevant.
If everyone gave 2.5% on net income to poor relatives, everyone would be taken care of. By the time people take out deductions, and some don't file, the end result is not more than 2.5% anyways. And people are more willing to give to their own relatives. Those who don't have relatives or choose not to give, can give to the government to pay for government programs, while property taxes and sales taxes can cover the cost of the roads etc. The 2.5 % would be required to be reported and verified.
Yeah, it is time to squeeze the congress.
We need more discussion on this. Please get Simon Johnson and David Walker on to discuss their ideas, and the political realities. These men a sane, savvy, have great ideas, and no agendas other than wanting this country to move constructively forward. I love the article.
With respect, this is total nonsense. The complexity of the code does not come from the rates (which are a few lines of the code) but from the fact that we tax something called "income" and income is a complex concept. No code that taxes income can be shorter than the rules for determining income, and in the GAAP manuals, that runs to several volumes. We add thousands of pages of handouts, tax subsidies, loopholes for favored friends of the politicians, etc. But that is a separate problem that has nothing to do with the rates.
Hear, hear!!!!
Estonian tax laws are only some 30 pages. The main point in such law is that everybody unerstand what to do. The law can be described in few sentences. All pay tax 22% if you have income more than minumum taxation rate fift of average wage. All business dividends is also taxated 22% reinvested profit is not taxated. Most of people (more than 80%) will do it in Internet spending less than 30 minutes of time.
50 TRUCKS A DAY CROSSING FROM SYRIA TO HIZBOALLAH ECEVRY DAY SINCE MARCH 1 , ALL THE WEAPONS . CASH COME FROM IRAN AND SHIIA IRAQI GOVERNEMENT, AND THE HEAVY WEAPONS FROM RUSSIA SALE TO SYRIA , SYRIAN SENDING THE WEAPONS TO HIZBOALLAH AS A BACK UP PLAN TO BASHAR AL ASAD RUN, WHERE IS USA , UN AND NATO FROM THIS, THOSE WAR CRIMINALS KILLED MORE THAN 14,000 CIVILIANS TO DATE, WHY IS THE SILENT ....SYRIANS ARE STILL KILLING CIVILIANS DAILY, WHY THEY SEND WEAPONS TO HIZBOALLAH ALONG WITH CHEMICAL WEPAONS WE SEE IT ON THE GROUND EYES WITNESS SEE THAT THE TRUCKS GO AL BEQAA VALY AND SOUTH LEBANON , AND ANY BODY STOP THOSE TRUCKS WILL BE SHOT DEAD....SOME OF THE WEAPONS INCLUDE KATIOSHA ROCKETS, K47, HEAVY GUNS. ANTIAIRCRAFT WEAPONS, ANTI TANKS, MINES, LAND MINES , POISON GAS, AND SMALL UNMAN AIRCRAFTS. SCUDS ETC.....SYRIA MUST BE STOPED AND HIZBOALLAH MUST BE DEALT WITH , IRAN PREPARING THEM JUST INCASE THEY GET ATTACKED.
Build more prisons. More prisons being built employes builders. Built prisons employ guards, parole boards and admin type people. Let the Feds do all prisons that way they spend our money that they'd blow on all sorts of wasteful projects and grants. However, make prisoners make things, repair school buses and federal cars. Let them learn a trade and not a degree.
After reading over half of the comments.... Everyone has an idea of what's "right" for America tax-wise, with so much of what's right based on probably iffy statistics and ideas. And that's the problem. We'll never get to an agreement on solving our current Tax Code problem. Every one has an opinion and their opinion is always better than your opinion.
Instead of arguing the merits of one plan over another, why not simply state what the goal should be for OUR Tax Code? Simplicity? Fairness (blind to how much one makes as well as NO preferential treatments)? Minimize both the regressive and progressive aspects? Cost to accomplish, to implement?
The real problem isn't the Tax Code per se... yeah, its who we as a nation elect as our Representatives, Senators and our President and the demands that we the voters place on them. Revolutionize the Tax Code and soon enough, "adjustments" will need to made... We're such a needy and whiny nation.
It's a constant argument that we should have a 2-page tax code. It's also a stupid argument. There will always be a need for an IRS and there will always be a lot of complexity in the tax code. It's easy to say "flat tax" and think that's all you need. But much of the tax code is concerned with determining what are deductions. Now, you're going to say "but, with a flat tax there are no deductions". That's nonsense. A large percentage of people in this country has small business income they file on their income tax. That would remain. If you have an eBay business and tell a $1000 item, you deduct the cost of buying that item and pay taxes on the profits. I travel for consulting and deduct the travel expenses. As long as businesses and individuals pay taxes, there will have to be rules to define what is the part of their income they pay taxes on. Those rules will continue to be complex since they have to stand up to court scrutiny.
BTW, I hope everyone knows that "broadening the base" means lowering taxes on the right and raising taxes on everyone else.
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