Tax reform tackled from all angles
People who disagree on how to make the federal tax structure better agree that something needs to be done. Republican member of Congress Vern Buchanan hosted a panel discussion in Sarasota last week to stir debate over how to best collect the nationâ€™s tax revenue.
â€œThe world has changed. Weâ€™ve got to do everything we can to empower our small businesses, medium size businesses, our pass through entities to make sure that they can compete, not just here, but in the world.â€
Some conservatives think that a less complicated tax structure would make the U.S. more competitive in a global market. Former radio talk show host Neal Boortz authored â€œThe Fair Tax Book.â€
â€œAbout 22% of the cost of every possession you have represents the taxes that were paid by all of the people that brought that consumer item to you â€“ from the cotton farmer, to the trucker, to the retailer, all of them, about 22%. You pay a dollar for an item, about 22% of that represents the taxes all these people have paid to the federal government. Letâ€™s get rid of that â€“ all of it.â€
Critics of the Fair Tax contend that it would put a greater burden on lower income and middle class Americans while leaving the wealthy with a lighter tax load. But Boortz argues a component of the theory would give people what he calls a "pre-bate" on an established cost of living.
â€œNobody pays taxes to the federal government until youâ€™ve taken care of the needs of your family. Not a penny to the federal government until your familyâ€™s needs are taken care of.â€
Another school of thought called the Flat Tax would create a uniform tax rate for everyone regardless of income level. Libertarian economist Dan Mitchell said heâ€™s had success in advocating for the Flat Tax, but itâ€™s not always an easy sell.
â€œThe nastiest, most hostel reception I ever got â€“ and I actually thought it would be a friendly reception, shows how naÃ¯ve I can be sometimes â€“ is when I spoke to a bunch of tax lobbyist for fortune 100 corporations. I thought I was going to be there hero. I was going to go in and talk about, weâ€™re going to have full expensing instead of depreciation, weâ€™re going to have a territorial tax system, weâ€™re going to have a low corporate tax rate. I figured theyâ€™d put me on their shoulders and march me out like we just won a national championship. All these people hated me. Why? Because they probably had an average income in that room of more than a million dollars each and I was going to take away the source of their human capital that was enabling them to earn those high salaries. They want the system â€“ these are the guys working for Boeing and General Electric that youâ€™re talking about â€“ they want the system complicated.â€
Mitchell added that the Flat tax would remove complication by doing away with loopholes often only accessible to wealthy individuals or corporations. That argument is meant to quell criticism similar to the Fair Tax that the structure would benefit people with the deepest pockets. Sarasota talk radio station owner Susan Nilon instead advocates for a progressive tax. That would be more similar to what the U.S. has in place now, but would put more emphasis on taxing the wealthy.
â€œEvery Congressman has a constituent. Boeing is a perfect example. The military is buying from Boeing things that we just donâ€™t need anymore. Why? Because Boeing employs an incredible amount of people in that Congressmanâ€™s town and itâ€™s going to directly affect the economy. We have a bad system, but weâ€™re not arguing over whether a Progressive Tax is better than the Fair Tax or the Flat Tax. Weâ€™re just arguing that itâ€™s not working and itâ€™s not working because weâ€™ve created this monster that weâ€™re addicted to.â€
President Barack Obama calls for progressive taxation during debates on government spending and revenue. Republicans favor deep spending cuts to put a dent in the national debt, while Obama and other Democrats call for higher taxes on the wealthiest individuals.
comments powered by Disqus