BILL MASTERSON JR.: Simple tax reform is needed

2013-01-03T00:00:00Z 2013-01-03T07:14:04Z BILL MASTERSON JR.: Simple tax reform is neededBy Bill Masterson Jr. nwitimes.com
January 03, 2013 12:00 am  • 

Like almost all Americans, I have watched the president and Congress argue and point fingers over who is protecting whom. What has been particularly disturbing to me is how the White House has pointed at the “entitled 2 percent’ers,” claiming they need to pay their fare share.

Well, I went online to check government websites to see what those “2 percent’ers” are paying and this is what I found. In 2009 there were 137,982,203 tax returns filed and based on the average gross income the average tax rate was 11.06 percent. Not so bad. But the total paid by the top 1 percent paid was 36.7 percent of all the taxes paid. The top 5 percent of taxpayers paid 58.7 percent of all income tax. The top 10 percent paid 70.5 percent and the top 50 percent of taxpayers paid 97.7 percent of all money collected.

So half of all the taxpayers in America pay 2.3 percent of the total tax. And this is with the Bush tax cuts!

Hmm. I don’t know about you, but if half of our taxpayers are paying more than 97 percent of the government’s bills and they want them to pay even more, it doesn’t take a rocket scientist to see the disaster we are heading for.

It used to be that America was the land of opportunity. Will the new sign hanging out front read, “Come to America and do nothing and we will take care of you”? Underneath it might state, “But if you work hard and try to earn a good wage the government is going to take half of it away from you."

Where’s the motivation?

I’m sure the powers that be in Washington can give me a good reason why this won’t work, but why can’t tax reform be as simple as a flat tax across the board? Using the same numbers with a flat tax, everyone is taxed at that 11.06 percent on every dollar they earn. If you earn $1,000 per year, you pay $110.60; if you earn $1 million, you pay $110,600 in tax. Eliminate all the tax loopholes and all deductions that Democrats say the wealthy use to not pay taxes. There could be variations where the first $20,000 of all income is not taxed if we wanted to ensure the working poor are given every opportunity to retain as much money as possible.

This has nothing to do with Medicare, welfare or any other government service. These programs continue as they operate now, but what Congress debates is the total tax percentage on all Americans.

What about our elected officials? A flat tax forces them (both Republicans and Democrats) to work within a budget affecting all voters and eliminating the blame game. If Democrats want more services, then the total price goes up to all taxpayers. If the Republicans want to cut taxes, then it comes at the expense of the Americans receiving those services.

I think it has come time that if you like what they are doing in Congress, vote for them in the next election. If not, boot ’em out. It eliminates us voting for the person who can spin their position the best into a verse that they are doing what’s right for the country.

So how does this improve our bottom line, you might ask? Well, we can start by greatly reducing the Internal Revenue Service. The IRS budget in 2013 is $12.8 billion. Yes, $12.8 billion! Automating tax returns where companies send the 11.06 percent directly to the government greatly reduces any and all auditing.

Like I said, I am sure there are a lot of complicated reasons our elected officials will give why a flat tax won’t work. What is not complicated is that America’s appetite for the current dysfunctional system and the Congress no longer exists.

In researching this column, I did note that Congress gave itself a raise, but the Senate, obviously from embarrassment during the fiscal cliff negotiations, killed it. Even so, why did they consider a pay raise given the financial condition of our nation? It is, unfortunately, the way of Washington.

Bill Masterson Jr. is publisher of The Times Media Company. Follow him on Twitter @nwi_BMasterson

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