Subject: Tax Reform Suggestions Comment: I am 55 years old, self employed for 28 years, father of 2 adult children, grandfather of 2 minor children, husband of one wife. I have served 2 years in the US Army in my youth - virtually one of America's last draftees. My recommendations: 1. The code should be simple, fair and not changed flippantly. My tax preparation fees are over $1,000 annually. I have formed an S Corp for the primary purpose of reduction of self employment tax, at a cost of $1,500. Paying "my fair share" has been an odious burden since the Social Security tax increase of 1986. I am always behind, always struggling to catch up with last year's taxes. I pay my taxes but not my own retirement. I feel like a serf. My recommendations are as follows: 1. The tax rate should be no higher than 5%. It should apply to both income and assets of all types and sorts. Valuation of real estate would be a problem that would need to be overcome, ( I own my home in California). 2. There should be a major RIF at the federal level, on an order of magnitude of 15 - 20% save (perhaps) for the military. 3. The department of education, by example, should be scrapped entirely. I have educated my two kids and gotten them through college with no debt. It is not fair for an Idaho farmer to pay for my kids public education in California. If Pleasanton Unified School District needs a buck more than they get from the State of California( which also ought to change, but is not the purpose here) it should ask me...the resident. And I am the most informed as to whether that buck is needed or not. 4. The tax rate ought to be broad: I don't care if one is a wino on the street, 5% of their welfare should go in as tax. They benefit just as much as I from the F16 that helps keep us free. 6. There should be no exemptions, deductions or the like. Why should I, a working stiff, pay tax on my income while some poor retired schmuck with $3 Million in tax free bonds pay zippo! 7. The same rules should apply to corporations: you make a Billion in "net revenues", (after employee wages) you owe 5%. 8. The one exemption to the 5% rule would be earnings from litigation - which would be taxed at a 50% rate. 9. The 5% tax rate is an initial proposal: I don't think you'll need that much, particularly when taxing real estate. Whatever the diminimus rate needed to fund the Treasury under these rules...that's the rate. That rate is then capped and can openly be changed by constitutional amendment. 10. The 5% rate includes Social Security contributions which is to be reformed to make payments on a means tested basis. MediCare likewise to be reformed to a means tested program. Why should I...the poor working schmuck be paying taxes like crazy to pay for the prescription bill of a retired person sitting on $3 Million of tax free bonds. It's nuts! 11. Every entity that has a line item in the federal budget should annually be forced to justify its existence. It should be asked initially to answer the following question: "I exist to serve by... the answer being no more than 2 words...the first of which ends in "ing". This becomes its purpose statement on which hang its mission, vision and values. It should be required to publish its wish list annually (prioritized) which would be included with the budget appropriations request, published and sent to the American people for comment. Thanks for the opportunity to be heard. Charles K. Arnold |