Comment: I am wholly in favor of a National Sales Tax as outlined by Rep. John Lindner (R-GA). Overall, the government will save billions in paperwork and administrative burdens placed on the IRS and the citizens of the U.S., and since every citizen and non-citizen above the poverty level, and those engaged in criminal activity and tax evasion will now pay on taxable items they purchase. Even terrorists operating in this country or with this country will have to pay taxes on their purchases, thereby supporting the U.S. economy. The current IRS employees can still be employed in a new capacity - managing the huge influx of funds and reserves and monitoring expenses, and they will be needed to collect the tax from the retailers. (Tax professionals will still be needed for business taxes and can expand into estate and financial planning.) With that said, if you feel that to implement such a system would need to be phased in over a period of time, say 2-3 years, I would like to suggest the following phase ins until a national retail tax system can be implemented that will be fair to all. 1. Implement a two-tiered flat tax system for those above poverty level - 15% for those below $100,000 per year and 27% for those above; no distinction between singles, married couples or any other classification. 2. Allow deductions for real estate interest on primary residences only, regardless of the tier.. 3. Allow for substantiated deductions of any donations regardless of the tier; i.e., the taxpayer must provide a receipt from the charitable organization for any donation claimed. 4. Eliminate federal withholding from paychecks. 5. Eliminate taxation on interest earned on deposit accounts (savings, certificates and interest-bearing checking accounts). Eliminate tax on dividend distributions of $1,500 per stock or bond fund. Above that threshold, levy a flat tax. 6. Eliminate any taxation of Required Minimum Distributions (minimums adjusted upward to allow for higher costs of living to maintain a decent lifestyle) from a retirement account, regardless of whether it is a traditional or Roth IRA or other retirement umbrella as a 401K, etc. for those who have retired. This strategy will assist the baby-boomer generation and beyond to support themselves on less Social Security as the SS deficit continues to grow. 7. Simplify Schedule D. In it's place, institute a simple form with a two-tier system. For capital gains amounting to less than $10,000 per sale, no tax should be levied. For capital gains greater than $10,000 per sale, levy a reasonable flat cap.gains tax rate, regardless of the length of time the security was held. There are no write-offs for losses or a flat percentage allowed for not to exceed the cap. gains flat tax rate . 8. For full-time and part-time small businesses with gross earnings equal to or less than $100,000 a year, design a simple Schedule C with a reasonable two-tiered flat tax: for businesses that supplement an owner who also is employed, the flat tax can be higher than for those who are subsisting solely on the small business proceeds. This will also allow small businesses to grow to larger businesses and employ more people and reduce dependency on government supplementary programs and generate more tax as people have more money to spend. 9. Raise the amount of tax-free monetary gifts from $11,000 per year to $25,000 per year. I hope this has been helpful. Leslee McDermott lmcares4u@earthlink.net |