What can be done to simplify the existing tax structure in the U.S.? What should be done?

2015-04-01T23:04:23-04:00

I saw something interesting on one of the ongoing political threads. Someone made the statement that the rich should be taxed more, because they pay a smaller percentage of their income as taxes than do the less fortunate.

On the face of it, the statement is bunk. Tax brackets escalate -- you make more, you pay more.

However, through the magic of deductions, probably most people don't actually pay what the tax bracket indicates -- and that goes for middle class folks as well as rich folks. So it is conceivable that at least some rich people pay a smaller percentage in taxes than poorer people. The problem with making that claim, though, is there is no way to quantify it.

So... What to do about it? What can be done? What should be done?

IRS Announces 2015 Tax Brackets, Standard Deduction Amounts And More

The Internal Revenue Service has announced the annual inflation adjustments for a number of provisions for the year 2015, including tax rate schedules, tax tables and cost-of-living adjustments for certain tax items. If you're looking for 2015 tax rates, here you go!

Response by SSgt Christopher Brose made Apr 2 at 2015 1:26 AM

2015-04-02T01:26:24-04:00

I could go for that, though I don't know if 10% of everything over $25K will be enough to sustain government operations -- and I'm certain it wouldn't be enough to operate government and pay down the debt.

My idea is what I call the 20/20/20 plan.

The first $20K is yours.
Everything after that is taxed at 20%. No deductions, no exceptions.
Of the total tax intake, 20% will go exclusively toward paying down the national debt.
Commit to doing that for 20 years, unless the debt is retired sooner.

Response by CSM Private RallyPoint Member made Apr 2 at 2015 4:11 AM

2015-04-02T04:11:34-04:00

Response by PO1 Private RallyPoint Member made Apr 2 at 2015 4:36 AM

2015-04-02T04:36:34-04:00

Shut down IRS for good and only tax private corporations and sales transactions?

Riiiight, but that would make too much sense and less government misappropriation. Am I wrong? Talk to me!

Response by PO2 Gerry Tandberg made Nov 13 at 2017 8:15 PM

2017-11-13T20:15:26-05:00

A flat 10% tax on everyone. No deductions, no exemptions, no exceptions on anything earned over $12,000. Additionally, if you are a retiree, Social Security Payments should NOT be taxed. It has already been taxed as part of our gross income when we were working.

I'm a retiree. With my SSA check and a modest pension I would fall into the 12% tax bracket until I added my withdrawals from my 401K at a minimum rate of 2.5% annually, which you are required to do at age 72. Well, that bumped me from the 12% bracket to the 25% bracket. After reviewing the proposed House of Representatives tax bill I found myself still in the 25% bracket because now I can't deduct my state taxes, and will likely pay more taxes then before.

I believe most of us were expecting a tax overhaul that would simplify and reduce what we pay in taxes that would be more equatable, especially for the middle income earners; which is yet undefined. Instead what we got was an adjustment in the tax brackets that only benefits the lower income bracket up to $24,000. We need to let both the House of Representative and our Senators know that this is not what we were expecting and is not a tax break for middle Americans. It's yet another scheme that may sound good to some, but maintains the status quo. I want to see a huge reduction in the bureaucracy.

Response by Lt Col Jim Coe made Nov 14 at 2017 1:32 PM

2017-11-14T13:32:03-05:00

There are many options for taxing Americans to pay for the services Government provides. I was a fan of the "9/9/9" plan. I'm also in favor of a "flat tax," that is a single tax rate for all Americans. The flat tax would greatly simplify the tax collection system. No deductions or exemptions, just write down your total income, multiply by a percentage, send in the money. In this way, everybody has some money (skin) in the game. The flat tax would hit all tax payers with equal force proportionate to their income. The "rich" pay more dollars than the "poor". Some will protest that this unfairly taxes those who paid no tax under previous tax plans. Yes. That's true. But, all Americans would be paying some part of their income to support the services the Federal Government provides. A flat tax should allow reduction in the number of IRS personnel necessary to enforce the tax law. Also, a lot of tax lawyers and accountants will be out of business. The whole taxing process could be accomplished on-line or on a postcard. Also, change tax day and election day so that election day comes 1 day after tax day. It will put a whole new perspective on fiscal accountability for elected officials.