Monday, November 10, 2014

Business Tax

I agree that the federal tax code for businesses need to be reformed.  I have a suggestion.

Treat all businesses/organizations of all kinds the same.  Do not allow any kind of non-profit or special categories with one exception, a narrowly defined concept of religion/churches that would not be taxed as long as they stay out of the public square.  From GM to Frank's Corner Deli to PACs and Planned Parenthood all organizations that have income are taxed the same.  We can have one kind of business/organization/entity and then we can have one kind of form.  GM, a corporation would file the same form as would Frank for his small business.  Of course Frank would also file for his personal income.

All income/money/anything of value of any kind would be taxed.  The gross is what taxes would be based upon.  However, there would be two deductions.  First, dividends paid out would be deducted from the gross.  Second, wages and benefits would be deducted.  We tax money one time and one time only.

The business tax would then shift from being a tax on profit to a tax on gross existence.  I'm not sure what the percentage should be so I'll suggest 3%.

After the two deductions possible, any organization owes the Feds 3% of last year's gross annual revenue.  

There would be no deductions for anything else other than dividends and wages.  There would be no depreciation or any other kind tax manipulation.  Everybody pays, even charities, politicians and private schools.

This approach would probably reduce the code for businesses down to no more than 200 pages (it is government after all).

No comments: