Dear editor,
Once we have elected representatives who truly represent the interests of the people (see my letter of August 14, 2012), I believe that the next thing that needs to be tackled is taxation in our country. Again, some of these suggestions may require amendments to our Constitution, but I believe they are worth the effort.
A. Repeal the Internal Revenue Code as it now exists in its entirety, and all other tax laws wherever they appear.
B. Create a new tax system, based in the first instance on consumption. Enact a Federal sales tax on all items, with the possible exception of basic food, clothing, transportation and shelter. Any "luxury" or other "unnecessary" items should be taxed on a progressive basis, up to 100% of the cost of the item. In that way, anyone could still buy whatever he/she wants, as long as he/she pays the tax, and thereby supports the government. People who need/want only the basics would pay a minimal tax, like today's state sales tax.
C. A new income tax should be instituted - again, a truly progressive, yet fair, tax on income, starting with an outright exemption for income lower than the poverty line up to 75% of all income over $X ($100,000,000?) per year.
1. No deductions or credits of any kind - If Congress decides that some item or course of behavior should be supported by the government, then let them pass a bill which states that "we deem [home ownership, oil drilling, wheat farming, etc.] to be critical to our country, so we sill set up a fund of $X dollars to be used to reach that goal, to be distributed...."
2. Corporations and other businesses, and their stockholders and other owners, should be taxed on annual income as if 80% of such income were distributed to such stockholders or other owners, if not actually distributed to such stockholders or other owners (if actually distributed such income would be taxed only at the stockholder or other owner level).
3. Every individual and business would have to file income tax returns (whether tax is owed or not), and receive a government acknowledgement certifying to such filing, in order to qualify for benefits under any other Federal law - If a tax return is not filed, that person or business cannot qualify for benefits.
D. A tax should be levied on all money sent out of the country. Again, it should be progressive, from a minimal tax on smaller amounts, up to 100% on large amounts sent outside the country (to avoid U.S. tax or investment laws, etc.)
States would have to adjust their laws accordingly, as they see fit.
John E. Borger
Clarendon