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%.

Government Budget Solution

There are certain taxes that are raised for a specific purpose. Examples are Medicare, Social Security, Disability, Unemployment, 911 system, Transportation etc. Each of these classes of taxes are to be kept in separate accounts and budgets, accounted for separately and only used for their intended purposes. What is not to be spent in one year would be carried over to future years. Food safety should have its own separate tax as should such other functions as the SEC. All regulatory functions would have its own separate industry tax budgets and accounts. Some of these areas are not the function of government and should be phased out, such as Medicare and Social Security. Others are not the realm of the federal government and should be managed at the state and local level. Other things that the governments do should be phased out and picked up by private organizations or not done at all. 

Here is something that I sent to the President in 1983.

January 27, 1983

The President

The White House

Washington, D.C. 20500 

Dear Mr. President: 

I would like to offer you my suggestion for the reform of Social Security and Taxes.  First, let me describe the program without any of the problems of changing over from the present social security system to my proposed one. This proposed deferred income plan is designed to provide income in retirement years, survivor’s income, and income for those periods when the wage earner is unable to work due to disability or periods of economic unemployment. Each employer and employee would contribute 10% of wages (20% total) to a special income (interest, dividend, etc.) earning accounts (investments held in the wage earners name by private financial organizations, banks, mutual funds, etc.) .The maximum wages subject to the 10% contributions would be 10 times the minimum wage. (The minimum wage to be set at the estimated cost of a family of four at a moderate standard of living for one year. This total cost would be divided by 2080 annual work hours to obtain an hourly rate.) The contributions would be included in income when computing Federal, State and local income tax. (See tax plan below.) The payments from the account to the wage earner and survivors would be free from Federal, State, and local tax.