Fair-Flat Tax Combination
We believe the U.S. should adopt a Fair-Flat Tax Combination. This is a combination of a smaller sales tax and a smaller flat income tax than propsed by others. The FairTax could be set at 20%, instead of the intended 23%. The Federal Flat Income Tax could be set at a fixed percentage of annual gross income over $100,000, whether that entity is a person, corporation, small business, etc.; any entity whose income is over a hundred-thousand dollars annually must pay at a fixed percent income. This would eliminate the current federal income tax, capital gains, and the corporate tax. Both taxes used together would be very simple for people to figure out, economically beneficial and sufficient to fund the government.
There will be no loopholes with a Fair-Flat Tax system. This is the simplest plan to remedy our federal fiscal crisis. Currently, corporations pay a disproportionately smaller amount of taxes relative to their profits. In fact the majority of taxpayers pay over 5 times more than corporations.
A Fair-Flat Tax would simplify the tax code and make an even playing field for all Americans. Corporations in America are currently paying the least percentage of their income on taxes, roughly 5%. If they paid the same percentage as everyone else, the Federal government would actually receive more revenue. If BP pays 5% of their gross ($284 Billion in 2007, Smith Barney), other taxes would not be necessary. Creating a Flat Income Tax for corporations would benefit the middle class, who are currently paying almost one third of their income on taxes. The current tax system penalizes the middle class by making them carry the majority of the tax burden. Meanwhile, corporations are rewarded with tax cuts and loopholes. This is widening the gap between the rich and the poor. The U.S. should profit from the success of corporations that earn large yields in the Stock Market and profits in their business. We want businesses to succeed so that we may as well.