okay so not a sports metaphor being used in a political context, but...
I was reading Sports Illustrated online the other day and ran across an article discussing pitching in Major League Baseball and specifically the trouble bullpens are having both with performance and with injuries. The article was somewhat lengthy, but the point being the modern baseball officials were not getting that there is a problem that needs a new solution. The writer's concern was that teams, the league, even doctors were not getting the stress being put on the modern closer and that new tactics were needed to solve the problem, you couldn't keep doing things the same way. There was evidence this wasn't working.
This in a round about way sums up how I feel about the current tax situation in our country. Nobody seems to get we need a whole new system or at least we need new ideas to solve the current problem. Right now our senate turned down the Buffet rule, and the whole thing has become a political lightning rod. Truth be told, whether we tax millionaires etc 30%, 25% 35% is really a moot point. It isn't the percentage that is as important as what we accomplish with our tax policy. First of course we need to balance the budget so some tax policy needs to be in place that works towards that goal. Another argument for another day. The second thing that needs to be decided is how we use tax policy.
Right now we actually use tax policy to effect some behaviors, such as cigarette taxes to try and make it too expensive to continue the habit, or we tax gasoline at the pump to also try and curb use by making it expensive and also to use it to help pay for road maintenance. An aside here, we are now paying tolls to private companies to help build and maintain roads, it seems our government has gotten away with giving people money and people are being double taxed in a sense that use these roads. Which brings up another argument for another day, anytime the government decides to spend money to solve a problem someone comes along and figures out away to take advantage of it. Government should never be in charging of spending, just policy. So which brings me back in a sense to the tax situation.
So we can completely discard using tax policy to effect behavior and create more straight forward taxes to raise money or we can try to create policy that favors solving economic problems. I have alluded to something like this in previous posts and said I would come back to it. Well this won't be long tonight since I want to work on that later, but in the general sense we can create tax policy that encourages certain behaviors and especially with the mega rich and corporations. They are working the hardest to get their tax rate lowered so lets really compromise. Why don't we lower the rates for the actual people and corporations who produce economic growth, (true growth which means new industries, new jobs, new technology, exportable products, not exportable jobs) and raise the rate for those whose activity only generates income for themselves. I have said this before and continue to feel wholesale changes in the way we look at what we do is needed. The pitching article just gave me another angle to try and get people to see what we are doing now is failing, what we need to do is change, not the percentage, but the whole outlook.
Real quick, I do have an idea where we could create some graduated income tax rates for people who make between $30,000 to $1,000,000 ( and these numbers are somewhat arbitrary). Basically my idea is that if in some range around these numbers people who generate income from wages, simple investing, real estate earnings and some other non complicated scenarios can be given the option to accept a straight forward rate and just pay that, no deductions, no extra forms, even maybe just paying quarterly estimated for their wages to keep it simple for themselves. Save the hassle and expense of a long drawn out tax season for many and for the government, refunds or amounts due would be minimal depending on small variations in income for the last few months. This would not work for everybody, especially small businesses or the self employed, but for many it maybe a way to understand what they are paying and feel more comfortable about it. Yes a working idea that needs some kinks worked out, but a thought. And yes there is a graduated feel to it, so people making 30-50k would pay a lower percentage than someone closer to a million, but not excessively higher. One kink is: people use their refunds as savings and we need people to save so something could be built back in such as IRA contributions to keep people saving some money.
Another quick thought and this is where the media and the politicians are missing the boat, there is all this talk that people don't think the rich don't pay their fair share of taxes, well actually the middle class thinks much more than that. People don't think the rich are contributing their fair share to society overall, it is not just the tax situation. Lack of understanding the bigger picture is another reason Washington doesn't get our problems.
Well some quick points as I hope to actually one day put my ideas down into a real essay that isn't just hammered out when I create a moment for myself. As they say, you make your own life and opportunities. One of these days I may actually take life up on this.
Cheers
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