Okay so this is my first post at Kos. This was originally posted over at Borgger, but I thought I'd get Kossacks opinions as well, as I know you have lots to add! It's a creative commons zero license so feel free to repost/quote as much as you would like. If anybody has anything to add, please add a revision to the Borgger thread.
The Proposal: A Comprehensive, Fair, Flexible & Simple Income Tax
Regardless of debates about how much revenue Government should be raising, we all agree that everyone should pay his or her fair share. In many ways, the current structure does not provide this. So, I propose a new income tax system with the following features: Comprehensive Coverage, No Loopholes, Individual Assessment, Poverty as Lower Bound, Linear Rate Progression, Maximum Average Rate and Normalized Rate Function.
And this is why the system is so simple. Literally all that a taxpayer needs to report is one number – total income. The IRS could then look at the income distribution, figure out which percentile the taxpayer’s income is, and compute the individual’s average tax rate. The taxpayer then pays exactly his fair share – no tax preparer, no loopholes, no
distended tax brackets. It’s comprehensive, fair, flexible, and simple.
Owing to the complexity of the current system, it is very easy to hide income, either in the loopholes or overseas. There is a great article in the Economist if you are looking for more information on this. It is estimated that the IRS loses over $300 billion in revenue annually. The comprehensiveness of my proposal would make it much easier to audit fraudulent taxpayers.
From the Economist article I referred to earlier: in 2006, the top 400 taxpayers earned an average income of more than $263 million. They paid an average tax rate of 17.2% . Thirty-one of them paid less than 10% in tax. This is absurd.
The rest of the plan on Borgger.