As both the Democrats and the Republicans agree, America’s Tax code need to be reformed. Yet when looking at the President’s and the House’s Budget Plan for 2012 do we see any real reform? What can we expect from the two parties and what do we really need?
The Republican’s have started out by saying they plan to block some tax breaks that exist and close some loopholes. They plan to lower the top rate to 25% and even to lower the corporate tax rate, which is one of the highest in the world. Yet do they go into the specifics? No. The phrases are merely Republican bate for the faithful. A way for the House to claim that they plan to fix a problem and make things better for everyone.
The President’s New plan is of course, raise the top rates, let the Bush tax cuts expire and “soak the rich.” Anything new here? Nope been done many time in the History of the United States. America’s top tax rate has even gone higher than the President is proposing several time in the history of the US. Which is pretty good when you figure that income tax has only been around permanently since 1913. Did the President target corporations like GE which paid no taxes last year and yet made a nice profit? Nope. Only wants to target those mean rich people who make more than $250,000 a year.
That this nation has tax issues is obvious. The rich in this nation, like CEO’s can make up to 9.5 million dollars a year. The average household in the nation makes less than $50,000 a year. Yet we also need to keep in mind that the top brackets pay the majority of taxes in this country. In 2002 the top 5 percent of taxpayers paid more than one-half (53.8 percent) of all individual income taxes, but reported roughly one-third (30.6 percent) of income, according to the Treasury Department. The Treasury Department also says the top 50% pay almost 94% of the taxes for the country. So the rich are paying somewhat a good share. But history has also shown that when the top brackets go up, revenue goes down. The top bracket though needs to be adjusted.
A working person who makes along with their spouse a total of $250,000 is not the same a someone like the President of the United States who reported a combined income with his wife of 1.7 million dollars. There needs to be a change.
On the corporate front the whole system is a sham. GE and other mega companies report record profits and pay no taxes. With tax incentives, rebates, and other sweet corporate welfare, these companies are getting out of “paying their fair share.” It is time both parties realize that a fair tax on all America is beneficial to all America. Corporations and Individuals. We need a tax policy that will be fair and still promote growth in both the individual and business community. We cannot sit back and say soak the rich, because as we do, revenue goes down. We cannot do business as usual for the top of the heap either. Close loop holes that allow companies and ultra rich to get away without paying.
But what will we get? The same old situation. Maybe it is time for the flat tax!