President Ronald Reagan was at a fundraiser and told the following joke:
There was a kid outside a Democratic fundraiser selling kittens. When the people came out, he was holding up the kittens saying, “Buy a Democrat Kitten!”
Couple weeks later the Republicans held a fundraiser in the same place. And when the people came out, there was the same kid with the kittens. And he said, “Buy a Republican Kitten!”
One of the members of the press who saw him 2 weeks earlier said, “Wait a minute, kid. You were selling these kittens last time as Democrat kittens. How come they’re Republican kittens now?”
Kid says, “Because now they’ve got their eyes open.”
Regardless of how you may relate to the joke, the fact remains that the majority of paychecks for most Americans does not stay long in the pocket of the earner. Because of the increase in tax rates and the sheer number of things that have become “taxable” in Connecticut, as decided by Connecticut’s state legislature and our local governments, less and less of yearly wages are kept by the earner. Government takes that money, via all the taxes you pay, to pay for all the things it says it needs to provide for- all the services for all the citizens. That list grows every year too.
Funny thing is, you may not use some or most of the services the Government provides and pays for with your tax dollars. It seems not very fair. However, the argument goes that taxes that are collected on everyone, is for the good of society on the whole. Like public education, for example. A senior citizen couple on a fixed income, who have no children in the school system, still pays the same as a family that has 3 kids enrolled.
Let’s refresh with the fact that government does not create wealth; it spends what it takes from you and businesses to pay for all the things it says you must have. Only private enterprises actually create wealth by building things and providing sought-for goods and services.
A smaller government will take less of your money, leaving it in your wallet to spend for what you decide, not the government, on the things you and your family need. You know best what is needed in your household.
It’s about personal choice and individual freedom, to live how you want to live and make the best decisions affecting you and your family- not how someone else decides for you.
So, what can we do about it? You may have heard that the IRS tax code is somewhere around 80,000 pages long! In the 2016 Republican Presidential debates, Sen. Ted Cruz said his tax proposal would allow ALL Americans to file their returns on the back of a postcard. I think a flat tax, without loopholes, is by far and away the fairest, smartest and simplest way of collecting tax revenue.
According to Tax Foundation, in 2015 a flat tax of 10% for individuals and 16% for businesses, the bottom-line effect would have been:
- Improved incentives to work and invest.
- Increase gross domestic product (GDP) by 13.9%
- Higher GDP would translate to 12.2% higher wages
- Create 4.8 million new full-time equivalent jobs
- Taxpayers would see an increase in after-tax income of at least 14%
Consider, why is no one else touting this program?
I believe an effective way to improving our society and ensuring personal freedoms, is to simplify many of the processes and requirements that the government forces citizens to follow. A Federal flat tax system would be one of those ideas I would fully invest time and study to make a working reality.
Secondly, think of the time and money you would save if you didn’t have to do all the tax prep, study rules changes, get professional advice or preparation assistance, etc.? Bookkeepers, accountants and CPA’s would still be needed to run and maintain accounting records used to derive taxable income and offer advice on managerial moves for both businesses, individuals, trusts and non-profits.
Reduce the restrictions on doing business and business will thrive, increasing the tax base and the economy will grow with the improved prosperity of the work force.