Interesting comment by Alan on taxes. This is not simple. Simple is saying everyone pays the same amount. That could be 2%, 5% or 10%...that's simple.
We could simplify the tax code tomorrow and the economy would skyrocket. OK, everyone earning over $500,000 pays 35% straight up, regardless of income source – paycheck or capital gains. Anyone making $200 – 500k pays 25% straight-up. Anyone making $100k – 200k pays 17%. 50k – 100k, you pay 10%, and if you earn less than 50k you pay zero. Add a VAT and you’ve just funded universal health care.
The problem with this line of thinking is it's too simple. For starters, putting $500k as the top bracket is a silly. Someone making $220k in Buffalo, which is typical of a C-Level executive these days, would need to make $500k in NYC. That's almost $30k difference. There would need to be several additional brackets going up. Triggers at $1M, $5M and $10M to start with.
But beyond that, the idea that someone earning less than $50k would pay zero is downright insulting. Everyone should pay something. Even if it's the tiniest of fractions...something so that everyone can participate. But the idea that a couple could bring home $99,999 a year and pay zero in taxes is insulting. Hell, someone making $49k a year and no taxes is bad.
Then you have the poverty guidelines that say a family of four making $27,000. Kids are expensive. Children are estimated to cost their parents anywhere from $100,000 to $500,000 from the ages of 1-18. Add in the cost of schools, say $20k a year for K-12 in public schools and you have another $260k in costs that are picked up by taxpayers. Perhaps having multiple children on a low income is not ideal. But in the very least we should not be rewarding it.
I am not talking about punishing those who are poor and having kids, rather, we should be rewarding those who do not have children. If you're a DINK in Amherst, you're paying the same freight as a couple with 1-3 kids but you're not putting any additional costs into the system. You should get something back for that.
This rewarding the wrong side can be applied in many places. From health care to starting a business, we need to start rewarding those who are doing the 'right thing' or 'better thing' than those who are on hard times.
For people who say we shouldn't kick those who are down... I agree. There should be a program where if you make less than say $50K a year you should be able to 'skip' pass on paying taxes for a couple of years until you get back on your feet. If you find yourself doing better but want to purchase back a year, simple refile your taxes and pay the year(s) you skipped.
The idea that some should pay nothing is what makes so many want to kill any tax reform before it gets started. People can talk all they want about the wealthy paying more and they should but everyone needs to pay something.