The taxing tax problem
The flurry of claims that the new proposed tax plan greatly favors the very wealthy over the public seems to be justified. Data shown on a recent Sunday newscast and others showed graphically who will most benefit from the new tax plan and the difference was huge.
The USA has the highest corporate tax rate (35 percent) in the industrial world. While this is high, it should be thoroughly reviewed more than it has been before changing the rate to 15 percent or any other number.
No question, the IRS code is outdated, it is old, has had numerous add-ons and changes with a huge volume of decisions and it is confusing and has to be updated. It contains too many exemptions and benefits to special interest groups, along with other outdated and complex regulations.
To simplify the code and to be primarily concerned with the corporate tax rate is not a good solution. The claims that the trickle-down effect (lower tax means lower prices) and claims that it will increase commerce and create new taxes that will pay for themselves have never been proven true. Many of us citizens may assume the tax rates as affecting primarily people's paycheck. but this is not the case. One-size tax does not fit all.
The superrich are not as affected with the payroll tax as the rest of the people are. The bulk of the superrich income comes from tax deferred income, stock options, deferred benefits, bonuses, capital gains, among others. Trump paid $31 million in such taxes in 2015 and little of that was taxes on payroll.
After every tax change, a battery of attorneys will begin work to find the best way of circumventing and alleviating the tax consequence. This is legal and they're doing their job. Greed must be a human disease that whether you own $10,000 or $10 billion, we want to add more.
We have an unsustainable debt problem that requires increased taxes and/or cut spending. Our legislature should take the time and foresee the consequences of any changes, and this problem deserves the bipartisan thinking and work of our legislatures.
William McNutt
Des Plaines