Thursday, December 22, 2011

Simplify the Tax Code and Lower Taxes

The House Republicans and Senate Democrats are caught in an end of year situation leaving in doubt if and how lawmakers will resolve their differences over the payroll tax extension and other items before December 31st.

ARRA News Service identified that House Speaker John Boehner has written a letter to President Obama asking the President "[T]o call on the Senate to return to appoint negotiators so that we can provide the American people the economic certainty they need." Note that it was the Democrat led Senate that pushed for a 2 month verses a 9 months compromise bill and went on recess instead of waiting for the House response. If both chambers do not reconcile their differences over the bill by December 31, . . . "160 million middle class Americans will see a tax increase, over two million Americans will begin losing their unemployment benefits, and millions of senior citizens on Medicare could find it harder to receive treatment from physicians."

There is a better way. Some advocate for the FairTax. Others advocate for a Flat tax. Backers of both groups have similar objectives and points. Earlier this year, The Heritage Foundation outlined a comprehensive approach to tax reform that would provide the permanence and certainty in the tax system that American taxpayers want and the economy needs. The Heritage plan called Saving the American Dream would replace income and payroll rates with a flat tax rate of 28 percent for everyone.

Heritage’s J.D. Foster detailed their "flat tax" plan last week:
The current tax system discourages saving. It discourages investment. It discourages entrepreneurship. It causes decision makers to misallocate the nation’s resources, limiting productivity gains, wage gains, and the nation’s overall level of international competitiveness. And, it is far, far too complicated. The New Flat Tax is the remedy. It replaces every major tax collected by the federal government. For non-seniors, it is as easy as one, two, three—one rate, two credits, three deductions. For seniors on Medicare, one of the two credits—for health insurance—is replaced by an extra deduction. The New Flat Tax is simple, revenue-neutral, and will allow America to achieve its full economic potential.

The above pictured Heritage Foundation chart reveals why it is so crucial for Congress to consider reform. Without major changes or significant spending cuts, tax rates are projected to skyrocket in the years and decades to come.

Tags: chart, flat tax, Heritage Foundation, lower taxes , less spending, To share or post to your site, click on "Post Link". Please mention / link to Conservative Voices. Thanks!

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