We definitely need to overhaul our tax code. I think we can all agree on that When I hear people demanding that we raise the taxes on Business, I have to wonder about their myopic reasoning process. The fact that Business passes on tax increases in the form of higher prices and lower dividends somehow seems to escape them. Businesses do not simply eat the cost of tax increases nor does the Government only raise taxes on one business at a time which might force them to eat the costto stay competitive in the market. In light of this fact, when people demand business taxes increase, they are actually demanding they pay a higher price for the goods and services the companies provide. Nor do I believe that the Rich should be unduly penalized for being successful at their endeavors.
So where should the taxes fall? Ideally, we would all pay an equal share of our income towards taxes because our incomes were all equal. As we all know, this won't happen any time soon so instead we have a graduated tax system so that taxes do not excessively burden the lower income families. I don't agree with that. Everyone should pay the same tax rate and it should be based on goods being consumed. Food should be exempt in an unprepared state from taxation. Items processed to stabilize them for storage such as homogenized milk or canned vegetables and microwavable meals should be exempt as well. This would not extend to deli sandwiches, restaurants, or fast food (that includes coffee houses).
All other new non-food items should be taxed at their sale as a percentage of the cost (Sales Tax). This means used goods sold at Salvage stores will not be taxed. Used cars will not be taxed. Only NEW goods will get taxed; and if you can afford a $5,000 pair of shoes from Gucci, you can afford to pay the tax on it. If you can't, stick to the $50 pair--or help keep the landfills from overflowing with usable, fixable items by buying second-hand goods tax free.
The result of this would be that the costs of new goods would fall as taxes on businesses producing them would be eliminated causing their production costs to fall. Their prices would be further depressed as demand for new goods fall to combat the increased demand for used goods to save money by consumers. This also helps to bring manufacturing jobs back from overseas to take advantage of the elimination of business taxes on produced goods. This can be further encourged by increasing tariffs on goods competing with domestically produced products. I don't see a surge in phone banks returning since Service businesses would still have to pay the Sales Tax on the services they provide.
The tax exemption on investment dividends should also be eliminated unless they are held in a retirement account such as a 401k. Even then, a cap should be placed on those exemptions so that anything over a certain level of income generated by dividends is taxed so that we avoid people simply waiting until they retire to claim their fortunes tax free. Those inheriting financial instruments or non-agricultural producing property should also be taxed. This ensures that family farms can continue to operate after an owners death without the heirs being forced to sell off property or take out loans to pay taxes to stay in business producing food for the country. The catch would be that ALL of the land exempted MUST be producing enough crops to warrant the exception. One pecan tree on a 500 acre "farm" would not qualify nor a 500 acre cow pasture with one cow on it. There has to be common sense limits.
This to me is a better Tax Plan than anyone to date has proposed. Of cpourse this is my biased opinion and I would like to hear your input on the matter. If you have a better idea, please voice it. If all you have to say is "Nope, can't happen", then you are in the wrong place since the topic is how we can overhaul the Tax Code to make it fair without cutting off our nose to spite our faces (increasing taxes on businesses). Considering all I've seen from the two major candidates all translate into the 99% paying more either directly or indirectly, I can only hope a Third Party candidate will adopt this plan and promote an even tax rate for all.
Next we will have to teach the Government to live within its means...