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Tax Thoughts

This is my thinking on a new tax structure with a little logic and order. I’m adding the 20% bracket to ease the transition, and I’m lowering rates on the bottom of the corporate rates because those are the people who create jobs. The big corporations don’t generate jobs, no matter what you’ve been told. Small business is where the jobs are today.

The personal rates are more in line with what people are making, and it keeps the bottom half of the working population at 15% and below. The $150K+ are the top 5%, and $350K+ are the top 1% of individuals.

Proposed Tax Rates
Rate Corporate Income Individual Income
10% $0-50,000 $0-25,000
15% $50,001-75,000 $25,001-50,000
20% $75,001-100,000 $50,001-75,000
25% $100,001-500,000 $75,001-100,000
30% $500,001-5,000,000 $100,001-150,000
35% $5,000,001-10,000,000 $150,001-350,000
40% Over $10,000,000 Over $350,000

This shows the current real tax rates on individuals, including the withholding taxes.

Single Tax Rates
Total Tax Income Social Security Medicare Taxable Income
17.65% 10% 6.2% 1.45% $0 – 7,825
22.65% 15% 6.2% 1.45% 7,826 – 31,850
32.65% 25% 6.2% 1.45% 31,851 – 77,100
35.65% 28% 6.2% 1.45% 77,101 – 97,500
29.45% 28% 0.0% 1.45% 97,501 – 160,850
34.45% 33% 0.0% 1.45% 160,851 – 349,700
36.45% 35% 0.0% 1.45% Over $349,700

This is what the real rates would be if the changes were made and the Social Security upper limit were raised to $100K.

Proposed Single Tax Rates
Total Tax Income Social Security Medicare Taxable Income
17.65% 10% 6.2% 1.45% $0 – 25,000
22.65% 15% 6.2% 1.45% 25,001 – 50,000
27.65% 20% 6.2% 1.45% 50,001 – 75,000
32.65% 25% 6.2% 1.45% 75,001 – 100,000
31.45% 30% 0.0% 1.45% 100,001 – 150,000
36.45% 35% 0.0% 1.45% 150,001 – 350,000
41.45% 40% 0.0% 1.45% Over $350,000

This may need an upwards adjustment to starting paying off the debt the Republicans have saddled us with since Reagan discovered that people don’t really pay attention to the National Debt until there is a crisis and they figure out the country is broke.

10 comments

1 Kryten42 { 10.12.08 at 12:45 am }

It’s a very nice idea Bryan. 🙂

No, really… It is! Very nice. Of course, it has 2 flaws… Well, minor niggles …

You want the wealthy to pay more tax than the poor, and you want the wealthy to actually pay tax! 😀 😉

Next, you’ll want to simplify the whole tax system so they can’t get away with paying tax in theory only. I mean, really… And here I thought you were firmly in the reality based World. *sigh*

You may as well also take away the tax-exempt status of Politicians, Religious organizations (most of whom are about as *charitable* as Chaney on a good day)… I mean… where will it end? It’s a bit… radical, doncha think? You are, after all, talking about messing about with the very foundations of *Capitalism*(tm)! You know ‘The rich get richer, and the poor can get stuffed!” system the US (and most Capitalist Nations) are based upon now. 🙂 Didn’t you get the memo?

😉 LOL

2 Badtux { 10.12.08 at 3:04 am }

OMG! You would raise my taxes! Burn the heretic! BURN the heretic!

– Badtux the Snarky Penguin

3 Bryan { 10.12.08 at 12:19 pm }

If you make $125K taxable under the current system you pay $29,110.75 for an effective rate of 23.3% [according to the 2007 tax instructions]. Under the proposed scheme you pay $25,000 for an effective rate of 20%. The folks below $8K see no change, and only the folks above $350K see a real increase. About 90% of taxpayers will see their bill go down.

Well, Kryten, if Jesus didn’t have a problem paying taxes [Matthew 22], I don’t see why his followers should. Getting something for nothing sounds criminal if not socialist to me 😈

The people who get the services should pay for them.

4 Scorpio { 10.12.08 at 4:06 pm }

If you want to ease a burden, doing something about self-employment tax might bring about growth in small businesses. There has to be a better way than the way it is currently apportioned.

5 Bryan { 10.12.08 at 5:17 pm }

Since I’m one of the people paying the 15.3% starting on the first dollar I make every year, I would love to see it drop, but the Social Security and Medicare systems depend on that for solvency and you do actually get something back for it unless Congress screws it up. I would just as soon that they stay as far away from the Social Security system as possible.

That has been the major tax I’ve paid for the past several years, because the Republicans have been so bad for business and Y2K ate the IT budgets for several years.

6 hipparchia { 10.12.08 at 11:48 pm }

i’m all for the confiscatory taxes of the mid-30s through the late 70s myself.

7 Bryan { 10.13.08 at 12:03 am }

The way they are throwing money around, we’ll get there, I have no doubt. Cutting taxes has resulted in nothing but deficits and economic chaos. One would hope that people have finally realized this, but I doubt it. Some people still think you can get something for nothing, and more of those people call themselves fiscal conservatives.

8 Kryten42 { 10.13.08 at 1:37 am }

Well, Kryten, if Jesus didn’t have a problem paying taxes [Matthew 22], I don’t see why his followers should. Getting something for nothing sounds criminal if not socialist to me

LOL The fact is Bryan, the few *REAL* followers Jesus has these days, are quite willing to play by his (or I should say, his Father’s) rules. 🙂 The problem we have is separating the few real Christians from the multitudes of weak ignoramuses and gullible fools that would much rather follow the criminal false christians, and false religions. Like the ones that essentially preach “You can sin all week, then you come and throw some money at the church on Sunday (or whenever), and all your sins will be forgiven.” types that seem to be sprouting like weeds everywhere. 🙂 I don’t remember that in Bible studies, I do remember reading about Jesus been pissed at a few that tried that, or that tried extorting money from the sheep, errr… flock. 😉

I have no problem at all with ‘Real Christians'(tm)… I think I met one, once. LOL

Most of the so-called *Charities* are either a con or so badly managed that little, of any, of the *charity* get’s where it’s supposed to. Basically, I think that if a charity pay’s wages, they should pay tax. Same for anyone who earns a wage, including Politicians. Most of these tax exemptions simply make it easier for the crooks to get away with not paying tax.

But, until you change things so that people will actually *think* for themselves, rather than believing whatever the latest snake oil con artist tells them; whether they be ministers, politicians, journalists, bobble heads on TV, the guy next door, etc.; noting will improve. People would rather be sheep. thinking just makes their heads hurt.

“Always seeking, never finding.” sums it up nicely. 🙂

9 hipparchia { 10.13.08 at 3:14 am }

fiscal conservatives, eh? maybe all this time they’ve just been confiscatory conservatives, real fast, so that it only sounds like fiscal.

10 Bryan { 10.13.08 at 3:02 pm }

Part of simplifying the tax system is simplifying the terminology, as in, income is income regardless of the source and should all be treated the same. Wages, interest, dividends, profits, et al. are income and should be taxed in exactly the same manner. That’s fair and equal treatment under the law, which is supposed to be the way things work.

It’s not the taxes, it’s the exemptions that discriminate. No more tax credits or any of the rest of the central planning that government does to affect what people do, and what choices they make.

People should do what they want to do because they want to do it, not because it creates a tax dodge. It’s a damn poor excuse for a belief system that needs a tax advantage.

Hipparchia, they are the only people who have figured out how to make money stealing from the poor.