What do you think about this?? Common Sense Tax Could Boost the Economy A new tax proposal that two economists call simple, transparent, and fair could spark new investment and job creation in the United States, they say. Our current tax system is unfair, distortionary, wasteful, and a users nightmare, according to John Goodman, president and CEO of the National Center for Policy Analysis, and Laurence Kotlikoff, a professor of economics at Boston University. Most important, its limiting our countrys economic potential. But can we have a far simpler tax system that generates at least as much revenue and is more progressive? Yes, its called the Common Sense Tax (CST). Its designed to be revenue-neutral and to kick-start the economy. The plan includes just two taxes. One is a payroll tax at a flat 13 percent rate. Todays FICA tax is highly regressive, since it levies a 15.3 percent tax on wages up to $113,700, half payable by the employee and half by the employer. To assure that middle- and low-wage workers benefit immediately, the CST levies the payroll tax only on employers. The second tax is a personal income tax with a 25 percent rate on income over $100,000 for married households and $50,000 for individuals. That would immediately end income taxation for two-thirds of American households. The CST is revenue-neutral because it taxes all income above the thresholds and eliminates all deductions and tax breaks except the charitable deduction, Child Tax Credit, and Earned Income Tax Credit, Goodman and Kotlikoff maintain in an article for The Fiscal Times. Another provision of the CST would tax corporate income at the personal rather than the business level — corporate shareholders above the threshold would pay taxes on income earned on their behalf by the corporation as it is accrued. The United States currently has the worlds highest statutory corporate tax rate. But with the CST, there would be no explicit corporate tax, which would make the United States the worlds most business-friendly country, the authors assert. They conclude: This would stimulate substantial new investment and job creation in the U.S., leading to higher wages for U.S. workers. In addition to being simple, transparent, and fair, the Common Sense Tax would improve incentives to work and save, eliminate an entire army of corporate and personal tax accountants and lawyers, and make April 15 just another day for most Americans. Most important, it would help grow the economy. The Fiscal Times calls the CST a tax reform plan that both parties can like.
Posted on: Sun, 27 Oct 2013 16:02:53 +0000
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