Wednesday, January 25, 2012
Taxes 1% VS 99%
As I think it Over ...
Taxes - When is Buffett and his secretary going to release their tax returns. His secretary pays 35.5%. I do not believe it until I see it.
My tax programs computes 2011 federal income tax of $12,506 for a joint
return, taking the standard deduction, no dependents with a salary of
$100,000. That is a tax rate of 12.5%. There is no other adjustments to income. This would be a high tax since most people filing a joint return at that salary level would probably have mortgage interest and property tax, contributions, health insurance and medical bills as deductions. If single the tax would be 19%.
The current tax rate of 15% on Capital gains is also high. Buffett wants to set it to an higher rate that was used in the past. Well do not forget that there were more ways then to shelter income from tax so the rate was not really as advertised. If the capital gain was the result of the sale of a business or business stock, the profits that were earned that produced a capital gain were also taxed.
I believe that the 12.5% is too high for federal tax. I would think that a 5% federal income tax would be more realistic. And everyone should pay the 5% of earned income. It would not matter if you earned $1 or Billions.
Many of the functions of the federal government today are functions that are rightly functions of the individual citizen with maybe a few of the items the function of the State and Local governments. One size fits all is what governments do but it generally does not work. To be fair everyone should pay the same rate of tax. Then we would have everyone doing their fair share.
For every function of the governments we must ask if it can be accomplished without government involvement. I include government contracts. Just because a government contracts out a specific function does not make it an individual citizen function, that remains a government operation.
What do you Think ...