Are they really changing their spots?

I read an article about the Koch foundation and some of the changes in philosophy(?) they are making. I read this more than a few days ago so details are faint.

They are making changes to how they approach their goals and even some of the goals. Pretty interesting article, I think it was from the Washington Post. If you can find it, I recommend reading. I cannot tell how sincere some of these changes are, yet the article brought up points that are impressive and if they follow through actually could be beneficial to society overall. They talked about how they were approaching these changes, one statement said they were not rebranding, but looking for something different, cannot remember exactly.

As I read through the article it did discuss some of their more tried and true thinking and that they would still continue working to lower taxes on corporations and for them and their group.  I still struggle with lowering taxes on the wealthy. There is too much at stake to lower taxes especially on the wealthy without some balance to the whole economy. So I wasn’t too excited to hear this part of the program.

Some of where they are headed seems to be in the right direction and I hate saying that, so read on your own so you can make your determination. Still have a hard time accepting people who can donate hundred thousand dollars to affect policy can be overly altruistic without something in it for them. A few maybe, but rich people do not give money away without seeing a purpose. And for an established group to make significant changes in how they approach use of their money take some leaps of faith. We will see though.

Of course the tax discussion is something I have approached differently. Especially with corporate and taxes on the wealthy businesses I believe more in the carrot on the stick approach, versus hoping they will change their behavior because you give them something. I have discussed that before so will leave it be for now, but I did think about taxes and have some discussion points.

This is a new idea from me and I am still batting it around in my head. I am not a big fan of a flat tax rate for many reasons. There is just too many other taxes that exist for people on low incomes to see the same benefit of people with larger incomes, but having an easier tax system is beneficial. And I believe there should be some adjustment for people who give to charities and even the benefit of not paying taxes on retirement savings. Putting money aside for these two items benefits individuals and society. I am going to separate Social Security. I have discussed that before and will again.

So just as a proposal and a rough draft of one at that, I am thinking maybe a graduated flat tax on earned income only. And yes this means everyone from the janitor to the CEO’s actual wages would fall under this system. Stock bonuses, dividend income etc is different, but actual wage earnings could be a graduated rate.

The numbers are for example only and I include how to adjust for retirement savings and charity. There is a break to contributing that I use to encourage certain behaviors.

So lets say everything under $40,000 is 5%

From $40,000.01 to $100,000 is 10%

$100,000.01 to $250,000 is 17.5%

$250,000.01 to $1,000,000 is 25%

Over $1,000,000 is 33%

Now we keep the actual retirement savings from the individual as a straight tax offset up to 10% and does not count for or against if the company matches.

The change is the charity giving. Anyone can contribute up to 10% and receive the offset against their income. So if someone makes $50,000 and gives 10% to retirement and or even zero but gives the full 10% to recognized charities (and proof will be part of the tax filing) the income is reduced by lets say 12.5%  This leaves a person that makes $50,000 if contributes both maximums a taxable income of $38,750 and he would be taxed at 5%

And this charity adjustment can be adjusted upwards as the tax brackets go up. Not as much as the actual tax rate percentage, yet some adjustment can be given.

Let’s look at an example for the top bracket. Someone earns 2 million a year and gives the max for retirement for that income level, I still propose the max limits that exist now stay in effect. Seems a bit unfair for someone to get up to $200,000 reduced from their taxes so that number has to be capped. The charity giving though is different. So lets say they give the max 10% or the full $200,000 then maybe we give them a 15% credit so their taxable income based on the charity giving, plus what the current max drops their taxable income to less than 1.85 million at 33% not 2 million basically giving them a pass on $50,000 for being fully generous.

Again these numbers are for illustration purposes only. You would have to play around with this to come up with something viable to the current tax rates. And yes I know this raises the income tax rate back up for people with higher earnings. I feel this needs to be done, yet giving credit for helping others should be recognized.

So going back to the Koch foundation article where they are (and not their word )empowering people to be creative with helping others, I look to  expand this ability to help others throughout society. Not as ambitious as their ideas and many of the article examples talked about helping people become entrepreneurs, business people etc, not specifically charity, yet for the average person who wants to do something more, this gives them an opportunity to invest in their community and a bit of a carrot to find a way to contribute.

Thoughts?

Just some strange thoughts on a warm evening here in North Texas. Summer doesn’t technically start for over three weeks, but temperature wise we are well into summer heat.

Was I inspired by the article, I do not know, yet I feel comfortable playing around with ideas to make taxes easier and less burdensome on all of us fairly. Then again everyone defines fair differently.

Cheers