Is America Ready for a New Tax System?

During tax time every year many of us wonder why we have such an inefficient system for collecting taxes. There are other ways of imposing a tax and not bending to special interest groups.

The first one that comes to mind is the Flat Tax. A Flat Tax is as easy as it sounds, take your income and send a flat percent of it to the federal government. This idea has a long history of followers, it’s most famous is former Presidential candidate Steve Forbes.

With a Flat Tax there would be a level of income that would be exempt and every dollar over that limit would be taxable at a flat rate. There would be no other exemptions or deductions allowable.

Example: All incomes over $50,000 would be taxed at 15%.

If you earned $45,000 your federal tax bill would be $0.00.
If you earned $55,000 your tax bill would be $750 ((55,000 – 50,000) x 15% = $750).
If you earned $10,000,000 your tax bill would be $1,492,500 ((10,000,000 – 50,000) x 15% = $1,492,500).

More information can be found here.

Another idea is implementing a National Sales Tax. This tax would be implemented at the retail sale of all items. No one would be exempted from this tax. Items purchased as necessity would be allowable for a refund of the taxes paid.

This system would be easily implemented in 45 states (sine they already collect state sales taxes) and the transition for the remaining states could be done quickly.

A better description of this can be found here with the actual legislation found here.

This form of taxation is gaining momentum…can true tax change be possible?

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