Tax Season Approaching
 

Remember - Nothing political here! Just reasonable ideas, please.

I got my first 1099 today and began thinking about Federal income tax reform ideas. Of course, there are the natural ones that come to mind first like institute a "flat tax" of a certain percent on everyone including corporations and of insuring that all people must file Federal income tax forms without any exceptions.

I am in favor of the idea of eliminating the deductions for mortgage interest and for charitable donations. This would not raise taxes on anyone and would garner much more money to reduce the national debt.

Any other NON-POLITICAL ideas?

Not trying to be difficult, but my first reaction is that there are some inconsistencies in your post...

How does eliminating deduction for mortgage interest "not raise taxes on anyone" and at the same time "garner much more money"?

I second that question.

Just thinking here- if there was a flat tax of (lets say)15 percent that ALL would pay-and all mortgage interest deductions were eliminated, would that be more equitable than now?

Currently, I hear around 50 percent pay no income tax and huge corporations making billions in profit pay no tax or as low as 13 percent.

Secondly, what chances are there for meaningful Federal income tax reform, regardless of which party is in control?

We are for a Flat Tax system (Fair Tax.Org)... it is fair to all and you have some control over how much you pay based on what you buy. Everyone should pay something...

The Fair tax is best. No forms, no income tax, a National Sales tax. In any case Corporate income taxes should be eliminated as the profits are taxed on the shareholders taxes. Dividends are taxed. Right now, Corporate profits are taxed twice.

What percent is right for the National Sales Tax? Is that in addition to a State Sales Tax? Are there any exceptions for people not paying a National Sales Tax such as doctor or hospital bills or is everything that has a price taxed at the same rate?

Just an observation. If you eliminate the deductions for mortgage interest ALL of the people who utilize this will pay more taxes.

Number I have heard is 20-30%. But remember, the cost of the product will be much lower as the suppliers will not have the cost of compliance with current income tax, nor the tax itself. It should be a wash for most honest tax payers. But people working for cash, drug dealers, etc. would be taxed when they spent their money. And you control how much you pay as it is a nationa; sales tax. Don't want to pay a lot, don't buy things. Plus you won't have to keep track of your income, file taxes either by TurboTax or if very complicated, CPA.

That sounds interesting. But how about deductions for mortgage interest? If they are not allowed, wouldn't the housing market suffer? Would the National Sales Tax guarantee enough money would be available for national defense or all those other important items that are now paid with with Federal income tax? Where would the government get enough money to pay for Medicare or Social Security?

Wouldn't a repeal of the Federal Income Tax require an amendment to the US Constitution? How long would it take to do that and to have 3/4 of the states to ratify it?

Lots of questions but it does sound interesting.

The best thing would be to get a copy of the Fair Tax Book by Neal Boortz.
It will explain everything.

I will pass on spending money on a tax book that has no chance of ever getting into existence. Loan me your book and I will buy you a beer at City Fire.