Simple Tax Plan

Our current tax system is the result of lots of politicians over the years tweaking things that constituents wanted imposed over the idea that we should tax income and profits.

Now the progressive income tax is by its nature a way to redistribute wealth since those who make more money pay more for benefits that in many instances are either the same for all are geared for the unfortunate.

The main advantages of this system is that it is complex and creates a lot of jobs in interpreting and enforcing it while still not creating enough revenue to pay for what we spend.

Of course there are also payroll taxes to pay for social security and various other taxes that come into effect after certain events, like estate or capital gains tax.

Now there is talk about reforming this into something simpler, but all the talk I see is related to basically keeping the current system.

I should note that the states and local governments also have a tax system which is more varied.

Problems with our current system, besides its complexities, is that it can be gamed with the right expertise, funding of charities and political campaigns is partially subsidized by the government, it makes us less competitive, and lets the government subsidize certain things without appropriating funds, using tax breaks.

Now what the government should and should not subsidize should be something that is clear to the American public and not hidden in some mysterious legal code.

The solution is pretty simple but unlikely to happen because the current system has its advocates.

Tax items sold in this country no matter where they originate.

Yes a national sales tax, exempting perhaps basic necessities needed to survive.

That part would help the less affluent who don't have money to spend on luxuries.

Now this should be instead of the current system, not in addition to and it has a lot of advantages.

First it levels the playing field, allowing our companies to compete fairly with its competitors and it makes can be effectively invisible to the consumer if structured correctly.

Now most of Europe uses a value added tax which is built into everything you buy.  Note however that if it replaces business taxes as well as income taxes, it should result in about the same amount of economic activity until the effect really kicks in when American products become more and more competitive.

I'' talk more about this coming up but as I said it isn't likely, at least not right away since we have too many invested people in our current system and out generally incompetent government.