Comment: Attached please find my comments on what a new tax system should look like. In an attempt to simplify the tax code we should try and keep the comments about this new system to a minimum. With that spirit in mind I am submitting a loose guidline as to what the major points of a new tax system should include, and what the overall feel should be. AMT We need to get rid of the AMT. Since it is not pegged to inflation it is useless. I don’t believe any further discussion about this is necessary. Rates The new tax system needs to have a greater spread in the tax rate so as to shift the tax burden back on those that can better afford the taxes. • 10% for low <$20,000 • 20% for middle $20,001-$50,000 • 25% for upper middle $50,001-$100,000 • 30% for upper $100,001-$200,000 • 40% for wealthy $200,001-$500,000 • 49% for ultra wealthy >$500,001 These numbers are rough estimates, but the overall message is consistent with our current system. The minimum costs of living (ie. cars, food, gas, etc.) are all equal and therefore people who make more can afford to pay more into the system. One of the largest hurdles of changing a tax system is going to be convincing the public that they aren’t paying more than their share, and that others aren’t paying less than they should. I believe it would be impossible to enact a wholesale shift in the tax system without create serious unrest in the country. That is why the spread needs to get larger, and place more taxes on the upper end of wage earners again. I think that many Americans believe that they can make $100,000 (AGI) a year although most don’t. Switching the brackets to give lower tax rates to the masses would be a boon, and still leaving that elusive $100,000 a year income level at a reasonable tax level would not pout off the dreamers in our society that just know next year is their year. Tax Deductions So that we may encourage the “ownership society” that President Bush espouses, we need to keep and perhaps increase tax deductions for small business owners. America’s innovation and economic prowess is rooted in entrepreneurialism. With mega corporations basically hijacking this country with their sweeping decisions on the amount of health care they will provide; how many tens of thousands they choose to layoff; or which country they choose to run to in order to escape paying their taxes, we need to shift government support back to small businesses. It is better for the country to encourage small business and therefore promote an “ownership society”. Basically a new tax system should keep the same feel as the current on, but strip out all of the so-called band-aids of the last thirty years. Removing the AMT, or at least reconfiguring to serve its original purpose and then pegging it to inflation is a must. We need to place the tax burden back on those who can really afford it primarily by changing the income brackets, and placing the burden back where it belongs; on those who can afford it. Finally, encouraging small businesses with tax incentives creates a vibrant, thinking, responsible society. Sincerely, Jesse Harris, MBA Small Business Owner |