“Flat Tax … The Rich Will Pay More”
Ty J. Young Editorial
The Paris attacks have reminded us of how exposed we are to global events. We are living through a dangerous period in history. During this time, we need caution, prayer – but most of all – good ol’ fashioned American vigilance.
We face a multitude of issues, and none is greater than the potential of terrorism. To defeat terror will require more and smarter spending on defense and intelligence, which is money we do not necessarily have. Sadly, our budgets are in shambles, deficits remain constant and debt grows daily. America needs a spark for our fiscal future, and many presidential candidates believe our best bet could be a flat tax system.
I. Flat tax system facts:
- Easy to understand and comply with: There are tens of thousands of pages in the Tax Code, a separate court system, audits, and a number of brackets your income could fall into. A flat tax allows you to simply do your taxes on a 3×5 card.
- Eliminates the need for the IRS.
- Politicians cannot use the tax code to motivate behavior: Whether it is rewarding a donor or mandating the public buy insurance, politicians would no longer be able to coerce the public into doing something it would not normally want to do.
- Lowering taxes generates economic growth: Lowering to a single flat rate could spur massive economic growth, business expansion, and wage and job gains. That’s more money in your pocket. Businesses could plan on market fundamentals, not how to shelter income from taxation. Additional profit would be taxed at the low, flat rate. This would be a boon for American business.
- A flat tax is FAIR to everyone: Everyone pays the same rate. As an example, if someone makes one million dollars with a 10% flat tax, they are paying $100,000 in taxes. If you make $30,000, you’re paying $3,000. The rich taxpayer is paying $97,000 more in taxes than the working class taxpayer. The rich will pay more.
- Government revenue will increase: We have never lowered taxes and not seen an increase in revenue. The problem has always been the government spends more than the extra money we take in. Nonetheless, lowering taxes increases economic growth. This broadens the tax base, increases taxable activity and leads to more government money.
Some may say the flat tax is not progressive and has several negative factors. A couple of those myths are uncovered below:
II. Flat tax system myths:
- It could shift the tax burden to the poor: False. Any tax system will have a minimum floor of income which is not taxable.
- Government revenue will decline: False. Tax cuts have always increased revenue into the Treasury. The data is not in dispute. John Kennedy’s tax cuts increased revenue. Ronald Reagan’s tax cuts swelled the Treasury. Even George Bush’s cuts – at the end of the dot.com collapse, before and after 9/11 – increased tax revenue and collection.
Tax reform has become a big issue that will be facing the next President of the United States. It is not a standalone issue. We have discussed our debt, interest rates, China’s market and many other economic issues, which impact the marketplace and therefore the public finances. But reforming the tax code is a big step toward getting our financial house in order.
III. Why is this important to you?
- A simpler, fairer tax code is better for the economy: A “less-stressed” economy – that is growing – naturally puts more money in your pocket and improves your own household finances.
- Better for your pocketbook, more money for your retirement fund: Lower taxes mean more money to add to your portfolio.
- Makes America an attractive investment option: Money will flow into American businesses and stock accounts, because the taxation of those profits will be lower.
There are many ideas on tax reform: (1) A flat tax of 10%, 12%, or 16% (among others being discussed); (2) Flat taxes with different rates for income and business; (3) Our personal favorite – an actual Fair Tax – This eliminates ALL taxes in favor of a broad national consumption tax. The beauty of a Fair Tax is that it is by choice – you have to choose to buy something – and it doesn’t take money from your hard-earned labor.
Tax policy directly impacts you and your money. It is great to see politicians with engaging ideas, which shows hope and promise for the future. ALL of your money is affected by the politicized, confusing nature of our tax code: How much you can save, how much you can deduct and how much the government takes from your gains on your investments. The first step to getting your retirement safe is to keep the money you earned in the first place. A reformed tax system will help us do just that. The second step is to call us at 877-912-1919.
(http://time.com/4107231/flat-tax/)
(http://news.investors.com/ibd-editorials-perspective/101712-629790-data-debunk-deficit-exploding-tax-cuts-myth.htm)