Donald Trump has broken with a long-standing Republican plank. It basically shakes the economic base of the GOP to the core. Donald Trump wants to raise taxes on the rich and give a tax break to the middle class. And while that is going to be appealing to a lot of middle class voters (lower class voters don’t have to worry since they don’t pay taxes anyway anymore), the once popular notion of a flat-tax, where everyone pays a certain percentage of their income goes right out the window.
Another billionaire likes Trump’s idea. Warren Buffet says it’s just what the doctor ordered. Actually it isn’t. It’s actually the total opposite of what the doctor ordered. And there are several reasons why.
The rich create the jobs in this country. You don’t find a lot of folks on food stamps hiring a lot of people. Not even to do their cooking and cleaning for them. And the rich are very protective when it comes to their incomes. If you start charging them more in taxes than what they feel they should pay, they actually do something about it. They reschedule their pay structure to lower their taxes. If you raise the capital gains, they figure out other ways to invest.
Another reason Trumponomics is off-base is that it’s a regressive answer to a progressive problem. When the rich pay more than everyone else, you have a group of people who are almost there, yet they get caught…they don’t want to take the raise offered at work because it puts them into a higher tax bracket and they end up actually taking home less money than if they hadn’t gotten the raise in the first place. Gee…thanks for nothing.
The final thing is, it doesn’t solve anyone’s problems with taxes. Everyone is going about the whole tax issue totally bass-ackwards. What you should be doing, if you’re going to want to get the rich’s money, and not kill everyone else, is eliminate the income tax. Rich people don’t make income. You think the senators in DC really give a crap about income? Nope. And so, they love the income tax because they say, “Oh sure, we can all pay a little more!” What they aren’t telling you is, the amount of money they’re making from being a senator or a representative is miniscule compared to the other income they earn. And that income is NOT considered taxable income.
The right way to go about this if you really are out to soak the rich is to do a “wealth tax”. instead of taxing income, you require every person in America to submit a net worth report. It shows all of their assets, all of their debt, and ends up with a “net-worth”. THAT is what you tax. So if you have a $100,000 job, have $1.5 million in investments, and live in a $2 million house that you still owe $1 million on, you have a net worth of $2.6 million. And just for grins, let’s say that the government is going to tax wealth at a rate of 1%. That means you are going to owe the government $26,000. Let’s say you make $40,000, have no investments, and live in a $150,000 house and have a mortgage of $135,000. Your net worth is $55,000. Your tax would be $550. Of course, the government would want more than 1%, but you get the picture.
The only other fair solution is a flat income tax. You make x, you pay a tax of y, multiply x times y and get z and send in z. Actually, you wouldn’t have to send z in because it’d probably be withheld.
Sorry Donald…on this one, you’re not in the fairway…you’re not even on the golf course!
Carry on world…you’re dismissed!