2006/12/18

Our tax code

This is from an email I wrote where somebody who obviously didn't know what they were getting themselves into asked me what I thought of the tax code. I figured I would share, tell me what you think:

I don't mind paying taxes as long as I support where the money is being used. Right now,in many ways, I don't. Therefore, I suggest we allow every taxpayer to set aside up to some percentage of their taxes for certain programs. For example, I might set aside 10% for education, 10% for the environment, 10% for NASA and science research, and 10% for developing world aid. Everybody could do this at their will with their 40% (or some other logical percent). With the other 60%, the government can do with it what they will, or rather, need to. They could use this for supporting our highways, paying governmental employees, supporting our defense budget (way overboard in my mind),and other issues. I can imagine other people devoting their full 40%to the military, and that is their right. People say they value education? Prove it. And for elected officials, their allocation decisions become public record.

How does this help? It means if I think the president appoints a leader of the EPA who, in my opinion, leans toward helping big business instead of the environment I can drop my percentage to 0%.It basically gives me the ability to vote each year on the government and the budget based on who is leading the program. I have written to my congressmen, it doesn't work. This could also help keep us engaged in our political process, which I think most Americans are not including myself. I can already do my taxes online with my SSN and an IRS code, this could be done. There are probably a lot of privacy issues here, but nothing that we couldn't figure out.

I like the concept of taxing everything that is a luxury, and I define luxury very broadly. Tax TVs, computers, video games, cable (cable is a luxury not a right or a need, regardless of what people say),cigarrettes, alcohol (and I like a drink so I'm not pushingprohibition), etc. very highly . Do not tax food, clothing under a certain price, and housing because as you mention this effects the poor. Everyone has to eat, have shelter, and wear clothes. Leave these free of taxes. I think we generally don't always make the correct distinction between our needs and our wants. Personally, I like the graduated income tax and believe the wealthier should pay more.

Also I saw one interesting thing last year that would at least simplify the current system. Over 50% of the population does a basic tax filing using a W2 and the 1040. The government already has all the information you need to fill out this form in the W2 and through the taxes you have already paid. Most people do not itemize deductions because they do not have enough. Why not send out completed W2 forms to everyone and, for the minority of people who need more analysis, they can buy a computer program (heavily taxed,see above...) or go to an H&R Block around the corner. This would save people hours.

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