Trump Proposes Much-Needed Tax Reform Plan

Here are two stunning figures: The Top 1% of taxpayers pays 39% of federal taxes. Meanwhile the bottom 50% pays 3% of federal taxes.

These might sound like made-up figures, but they are not. And they mean that roughly 80 million people who are working and earning a paycheck then pay virtually no federal taxes or no taxes, or they take rebates from the federal government in the form of the Earned Income Tax Credit, which is a fancy name for welfare.

Meanwhile tens of millions of people are not even working but are taking hundreds of billions in welfare, food stamps, housing subsidies, etc. Yet the socialists claim that America is “unfair”.

They are correct. America is “unfair” to hard-working people who play by the rules and pay their taxes. It gets worse. Look at this from CNSNews.com:

Americans on average spent more on taxes in 2016 than they did on food and clothing combined, according to data released this week by the Bureau of Labor Statistics.

The same data also shows that in three years—from 2013 to 2016—the average tax bill for Americans increased 41.13 percent.

In 2016, according to BLS, “consumer units” (which include families, financially independent individuals, and people living in a single household who share expenses) spent more on average on federal, state and local taxes ($10,489) than they did on food ($7,203) and clothing ($1,803) combined ($9,006).

The average tax bill for American “consumer units” increased from $7,423 in 2013 to $10,489 in 2016, according to data released this week by the Bureau of Labor Statistics.

… From 2013 to 2016, overall personal taxes climbed from $7,432 to $10,489—an increase of $3,057 or 41.13 percent. Federal income taxes climbed from $5,743 to $8,367—an increase of $2,624 or 45.7%. State and local income taxes climbed from $1,629 to $2,046—an increase of $417 or 25.6 percent. Other taxes climbed from $60 to $75—an increase of $15 or 25 percent.

This is shameful. At the same time those honest and hard-working middle-class people also have to deal with a horrendous tax system every year.

Wealthier people can afford accountants and lawyers to do their taxes. Many middle class people cannot. They are subjected to a brutal and confusing 2 million word tax code that has built up over many decades.

On August 30 president Trump gave a fantastic speech in Springfield, Missouri to announce his new tax plan to lower rates and simplify the tax system. He said:

“The foundation of our job-creation agenda is to fundamentally reform our tax code for the first time in 30 years… We have totally surrendered our competitive edge to other countries. We are not surrendering anymore… Millions of Americans have watched that prosperity slip away in the rear view mirror… we must reduce the tax burden on our companies and on our workers.”

On the other hand Obama watched jobs slip away and raised taxes wherever he could, exacerbating the problem. So let’s look at both issues of tax reduction and tax simplification:

Tax reduction: We need tax reductions badly. Tax reductions increase economic activity and create jobs. That is why the American economy has moved significantly to the low-tax South. Or on a local level, just look at how much shopping takes place on ‘tax-free days’ in your town, i.e., business activity spikes significantly when taxes are lowered or eliminated.

Meanwhile liberal, high-tax states like New York, Illinois and Connecticut are suffering with economic stagnation and ongoing budget problems.

And if you look at highly-taxed nations in Europe or Japan you see stagnant economies with high unemployment, low growth and little hope for jobs and advancement for tens of millions of people. France has high taxes on almost everything and has about 75% the average standard of living that America does.

President Trump wants to lower the US corporate tax rate to 15%. Today it is the highest in the world at 35%. Even ultra-socialistic Japan lowered its rate when it realized that it was pushing business away.

Since the rate was raised under Obama hundreds of companies have moved out of the United States as a direct reaction. This high rate also stops companies large and small from bringing trillions of dollars in wealth back to the US.

Trump also wants to lower individual tax rates. This has both a moral component – that people should be allowed to keep more of their hard-earned wealth – and an economic component – it is good for the economy when people keep and spend their own money.

We also need to restrain or cut tax rates on “the rich” since this causes strong economic activity. Here are some examples:

The three biggest economic booms in world history were set off by reductions on tax rates for the wealthy – in the 1920s, 1960s and 1980s in the United States.

When president Ronald Reagan reduced the top tax rate on wealthy Americans by 60% Democrats claimed that it would reduce revenues to the US Treasury by a significant amount. But the opposite happened. The increased economic activity from the tax reductions increased tax revenues to the US Treasury by 91%

Or think about this example: A multi-millionaire lives in a town. If the federal government taxes him heavily, that wealth goes to Washington. If he keeps his wealth, he may either spend it, or invest it, in his town, helping out the town’s economy; or he may keep some of it or all of it on deposit in the bank in his town. The bank then has that wealth to lend out for people in the town to buy homes, start businesses, etc.

On the other hand, a special federal luxury tax on yachts imposed in 1990 was supposed to bring extra revenue into the US Treasury. Instead rich people stopped buying yachts. This not only resulted in less money for the Treasury but the loss of thousands of jobs in the yacht-building industry.

Tax reform: We need to eliminate the IRS and the 70,000 page tax code and all of these oppressive tax forms along with the $12 billion annual IRS budget.

Starting every January 1, taxpayers live under a dark cloud, with taxes due by April 15. This must end. This is a huge drag on our economy. The Tax Foundation reports:

The time it takes to comply with the tax code imposes a real cost on the economy. Individuals and businesses need to devote resources to complying with the tax code instead of doing other productive activities. For example, a business owner who needs to file a complex tax return each year may hire an accountant or tax lawyer to do it. This tax professional may cost $70,000 a year or more. This is $70,000 that this business owner cannot devote to purchasing equipment or hiring workers. Economists refer to this as an opportunity cost, and it results in lost productivity.

Put in dollar terms, the 8.9 billion hours needed to comply with the tax code computes to $409 billion each year in lost productivity, or greater than the gross product of 36 states.

Note: That $409 billion is not to pay the taxes, but just the cost to the economy to fill out the forms… Amazing.

The two major alternatives for paying taxes are:

*Flat Tax: You take your income, multiply it by a percentage and pay that rate. No deductions or other nonsense. No tax forms necessary. You could do your taxes in three lines – income, percentage and tax owed.

*National Sales Tax: This would be a federal tax on every purchase of goods or services. Under NST federal taxes would be collected automatically with every purchase, like a state sales tax. There would be no need for the IRS, or tax forms.

Nikitas3.com supports the National Sales Tax. Everyone would have to pay taxes on every purchase. Taxes then could be forwarded to the government by computer from the businesses that collect them.

(Please bookmark this website and send this article by e-mail to your friends. And please recommend this site to all of your friends via Facebook and any other means. Let’s make Nikitas3.com the #1 conservative site by word of mouth. And if you would like to contribute to Nikitas3.com, please click the link at the upper right where it says “support this site”. Thank you, Nikitas)

This entry was posted in Current Events (More than 1,000 previous editorials!). Bookmark the permalink.