I am offering 7 suggestions on how to Reform our broken tax code, help balance our federal budget and help fund Medicare and Social Security. Everyone needs to pay some taxes each year. We need to make all citizens stakeholders in what is going on in Washington D.C. No one should get benefits that our country provides them and in return pay no taxes.
1.) Limit the Earned Income Credit to no more that 90% of total tax pay-out per person. What I mean by tax-pay out is how much total taxes a person pays out. For example a person pays out lets say $500 in federal withholding, $1296 in Social Security tax and $576 in Medicare tax. The total E.I.C. credit that they could receive would be 90% of the total of these three combined or $2135. Under current law this person could receive a refund upwards of $6000. This person would receive the benefit of this huge refund plus all other benefits that they might be receiving through the year and have no net taxes of any kind paid. My suggested reform of E.I.C. would make them at least a partial stakeholder and not just a taker. (This would save approximately $30 billion)
2.) Increase Medicare and Social Security pay roll tax. I suggest a small and modest increase in the withholding of these two taxes. I also suggest to not limit the income taxed for Social Security but to tax all of earned income for Social Security. I suggest increasing the Medicare tax rate from 1.45% to 1.9% and Social Security from 6.2% to 6.5%. This would increase over a years time the withheld tax for a person making $100,000 a year by $750. (This would bring in about $6 billion more a year)
3.) Means Test Social Security and Medicare. I suggest adding a means test to qualify to receive Social Security Payments and Medicare coverage. Did you know someone like Donald Trump gets Social Security Checks every month. There needs to be established a fair upper income limit on receiving these benefits so the country can continue to provide the benefits to those who truly need them. (This would save about $70 billion a year)
4.) Add a 1% no tax liability surcharge to all returns. If a person ends up with no tax liability after completing his return. There should be added a 1% no tax liability surcharge. This would mean at least everyone pays at least 1% of their income in taxes. This would make all adult citizens in the nation at least partial stakeholders in the national budget debate. ( This would bring in about $50 billion more each year)
5.) Eliminate some credits and deductions. For example eliminate the Educator expense deduction, the Student loan interest deduction, The Hope and American Opportunity credit, the Energy credit, and the Daycare credit. (This would save approximately $15 billion a year)
6.) Increase the tax rates of those with incomes of $200,000 or more by just 1%. ( This would bring in about $15 billion)
7.) Institute a national sales tax of .5%. No one would even miss the .5%, but it would sure make a difference in the federal budget. ( This would provide about $75 billion in additional revenue)
All these suggestion have a combined savings/increase in revenue of approximately $245 Billion. Combine these with budget cuts elsewhere in federal budget to arrive at balance. These are just suggestions I am offering. In no way am I saying I know it all, just offering some suggestions to the debate.
Related Posts:
Top 5 End of Year Tax Tips
Top 5 Things Wrong with the Tax Code
1.) Limit the Earned Income Credit to no more that 90% of total tax pay-out per person. What I mean by tax-pay out is how much total taxes a person pays out. For example a person pays out lets say $500 in federal withholding, $1296 in Social Security tax and $576 in Medicare tax. The total E.I.C. credit that they could receive would be 90% of the total of these three combined or $2135. Under current law this person could receive a refund upwards of $6000. This person would receive the benefit of this huge refund plus all other benefits that they might be receiving through the year and have no net taxes of any kind paid. My suggested reform of E.I.C. would make them at least a partial stakeholder and not just a taker. (This would save approximately $30 billion)
2.) Increase Medicare and Social Security pay roll tax. I suggest a small and modest increase in the withholding of these two taxes. I also suggest to not limit the income taxed for Social Security but to tax all of earned income for Social Security. I suggest increasing the Medicare tax rate from 1.45% to 1.9% and Social Security from 6.2% to 6.5%. This would increase over a years time the withheld tax for a person making $100,000 a year by $750. (This would bring in about $6 billion more a year)
3.) Means Test Social Security and Medicare. I suggest adding a means test to qualify to receive Social Security Payments and Medicare coverage. Did you know someone like Donald Trump gets Social Security Checks every month. There needs to be established a fair upper income limit on receiving these benefits so the country can continue to provide the benefits to those who truly need them. (This would save about $70 billion a year)
4.) Add a 1% no tax liability surcharge to all returns. If a person ends up with no tax liability after completing his return. There should be added a 1% no tax liability surcharge. This would mean at least everyone pays at least 1% of their income in taxes. This would make all adult citizens in the nation at least partial stakeholders in the national budget debate. ( This would bring in about $50 billion more each year)
5.) Eliminate some credits and deductions. For example eliminate the Educator expense deduction, the Student loan interest deduction, The Hope and American Opportunity credit, the Energy credit, and the Daycare credit. (This would save approximately $15 billion a year)
6.) Increase the tax rates of those with incomes of $200,000 or more by just 1%. ( This would bring in about $15 billion)
7.) Institute a national sales tax of .5%. No one would even miss the .5%, but it would sure make a difference in the federal budget. ( This would provide about $75 billion in additional revenue)
All these suggestion have a combined savings/increase in revenue of approximately $245 Billion. Combine these with budget cuts elsewhere in federal budget to arrive at balance. These are just suggestions I am offering. In no way am I saying I know it all, just offering some suggestions to the debate.
Related Posts:
Top 5 End of Year Tax Tips
Top 5 Things Wrong with the Tax Code
No comments:
Post a Comment