How would you reform the tax code?

[Selatius]

I'm interested in how you guys would reform the tax code. Here is my plan. The percentages are based on ranking incomes from the smallest to the biggest both corporate and individual. We're not going to deal with nominal amounts, just percentages based on rank:

0% up to 20%: pay 0%
20% up to 90%: pay 17%
90% up to 95%: pay 27%
95% up to 99%: pay 37%
99% up to 99.5%: pay 47%
99.5% up to 100%: pay 57%

If you graph it out on paper, it would resemble an L, so I call it the "L-tax" because it doesn't rise until you hit the very end, and when it does rise, it's fairly steep. It's a steeply graduated income tax.

The only credits you can claim are if you have children and if you give to charity with proper documentation. Otherwise, there will be no loopholes, exceptions, gimmicks, etc. It'll apply to both corporate as well as individual incomes.

You only pay taxes on the portions of your income that qualify you for a particular tax bracket, so if you made 50,000, the portion that would qualify you for the bottom 20% would be exempt, and the rest would be subject to a 17% tax. If you made 20,000,000, the same would apply. There would be a portion that is exempt, while other portions are subject to a 17%, 27%, 37%, 47%, and perhaps 57% if that kind of income is high enough to qualify as being in the top .5%.

Does this seem workable? The L-tax?

[Ilsa]

1. I would limit how many children could be claimed for

a deduction and child tax credit. I see no reason why my friends should have ten babies and use them to not pay any frickin taxes while single people pay the whole freight.

[TheFarseer]

2. Keep the bottom bracket at 10%

raise the rest of them to what they were. Close any tax loop holes that encourage shipping jobs overseas. I don't feel like it was too bad after the Clinton administration.

[orpupilofnature57]

3. Makes perfect sense to me,shrubs would sh-t them selves!!

[Birthmark]

4. Here's what I'd do:

0% up to 35%: pay 0%
36% up to 90%: pay 20%
90% up to 99%: pay 70% to 90%

I would also allow many charitable deductions. I would also close loopholes in the corporate tax and raise it dramatically and impose prohibitive taxes for offshoring American jobs; and eliminate all business taxes on small business.

[benburch]

5. Steeply Graduated

$0-30K per year, no federal income tax (payroll taxes still apply!)
Every dollar over $30K, taxed at 30% up to $60K
Every dollar over $60K, taxed at 40% up to $90K
Every dollar over $90K, taxed at 50% up to $120K
Every dollar over $120K, taxed at 60%

If you make $60K per year, you pay $9K in taxes.

If you make $150K per year, you pay $54K in taxes.

If you make $200K, you pay $84K in taxes.

If you make $1M, you pay $564K in taxes.

[Javaman]

6. Here's how, have all the red states start supporting the blue states...

Instead of the other way around, as it is now. Then let's see them vote for moron again.

[evilqueen]

7. Sounds reasonable...

except that I would add a federal exemption from federal income tax for any active duty military, reserve military, or disabled (VA-determined) veteran military pay/compensation. They are already giving up years of their lives, if not literally their bodies, for this country.

Some states already allow disabled veteran's compensation pay to be tax-exempt, but not all. I would make it exempt nationally.

I would also consider making social security benefits tax exempt.

[pilgrimm]

8. I would tax investment earnings much higher than labor

Someone who works 80 or so hours a week and makes 60k, should be taxed the same rate as someone working 40hrs a week making 30k.

Someone sitting on their ass living off earnings from investments should be taxed at twice the rate as people who work.