Monday, February 27, 2006

income taxes

IMO any finite amount that’s mentioned in any tax regulations and laws should be indexed. Due to the inflation of the dollar over the years, specific un-indexed amounts result (over the years) in greater tax amounts and rates being paid by lower income earners. This is particularly important in regard to deductions per dependent and the amount ranges of tax brackets. They also affect the application of the alternate minimum tax.

I’m not opposed to bracketing, (progressive) taxes out of principle, but because it induces increasing complexity and unanticipated inequities. Each real or perceived inequity induces another tax exception or additional loop hole. That’s a significant cause of our tax complexity and inequities. If we could, a flat tax rate for all types of income tax is preferable.

Each instance to “fix” a specific inequity, generally results in the creation of new inequities. Tax regulations should be drafted with a “broad brush”. Minute micro-fixes don’t work. When congress heeds the lobbyist’s pleas to alleviate their client’s tax burden that they perceive as excessive, the “fix” is an inequity upon another lobbyist’s client. Lower income taxpayers are not large contributors of political funds. Congress is not amiable to the pleas of non-contributors that are not organized into strong voting blocks.

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