Liberals love to brand conservatives as voters who despise the poor and support the rich. That's about as inaccurate as saying all Democrats are big spending liberals. What concerns conservatives about raising taxes is that, when the government gets their hands on more money, they want to create another give away program.
I would like to propose a compromise between the two diverse positions. Since Bill Gates and Warren Buffett bemoan the fact that government doesn't tax them enough, let's by all means raise their tax rates. However, let's make sure we're taxing the truly rich; Obama's proposal to raise taxes on anyone who makes more than $200,000 dollars for an individual and $250,000 for couples is ridiculous. It simply does not take into account the cost of living variances in different parts of the country. For example, since New York City residents pay exorbitant city, state and federal taxes someone living in New York and other high costs cities have far less net take home pay than someone with that same income in Iowa or Phoenix. A couple making $250k in New York city is not rich!
Instead, if we are not going to do away with the IRS and implement a VAT only tax (see my blog from yesterday), then at least raise the parameters of salaries to a more reasonable $500k per year and raise the taxes for those folks accordingly.
It should be noted that the top 20 percent of high wage earners pay 70 percent of all taxes today and only the top 50 percent of earners pay all of the income taxes taken in by the government! I've seen thousands of posts on message boards that scream "tax the rich!". Those posters are more than likely, not only not paying any taxes, but are in fact, getting all of their payroll taxes back plus very generous Child Tax Credit checks which rewards "breeders". Don't believe it? Just google "Tax Revenue By Income Bracket".
While raising the taxes on the truly rich, let's also move to lower the corporate tax from the current 35% to 25%. Our corporate taxes are the highest of any major economy and is the reason why many companies are leaving the U.S. Yes, I've heard the news on the General Electric tax story but, if one truly understands financial accounting, they would know that General Electric's business sucked badly since 2008. Most corporations indeed do pay 35% on their revenue and it is creating conditions for corporate migration away from the U.S. That costs jobs, folks, and we don't need to be losing any more jobs. Keep in mind that the workers on those jobs pay taxes! By reducing the corporate tax rates you create jobs and actually boost tax revenue! One caveat: I do agree with Democrats that we need to get rid of some really stupid business tax loopholes and put everyone in business on a level playing field!
Finally, you know that tax on the rich I just suggested? Put a condition on approval of any tax hike; that condition would be that all revenue from these tax hikes go to pay down the deficit! None of that tax money could be used to support any other program except paying off the national debt!
As I related in my blog yesterday, if the U.S. were to downsize the IRS and simply implement a VAT only tax the government could capture all of the funds now being hidden from view by tax cheats. It would also force tax cheaters to contribute some measure of support to government programs. It would also make better citizens of folks so accustomed to gaming the system.
Now, get back to that 1040 and get your checkbook out.