Friday, October 24, 2008

Increase Taxes! Make People Happy!

Today in one of my many delirious random pondering episodes (I'm going to patent that), I came up with a wonderful plan to make people happy, make people spend more money, and increase income taxes.

It needs more research before it can be implemented.  I'm hoping the next President reads my blog.

For the sake of simplicity let's say that the current tax rate per American is 25%.  I know it's variable based on your income, but I am making things simple.  It's why I will never be a politician.  Things that are unnecessarily complicated fundamentally bug me.

So, my proposal is that every working American gets an instant 50,000 deduction.  That means that the first $50,000 you earn is tax free.  Furthermore, people with dependants get an additional $10,000 per dependant.  Thus, a married couple with 4 kids could earn up to $140,000 without being taxed for their income!

This should serve several purposes.  First, it would encourage people to get jobs (even low paying jobs).  The government could safely lower the minimum wage (a law I don't agree with anyway, but that's a seperate argument).  I mean if you are going to state that the minimum wage is $10 per hour, but your tax rate is 25%, you are actually creating a minimum wage of $7.50 per hour.  Someone making $10 per hour will never clear $50k per year so they'll never pay taxes.

People won't have their incomes taxed so they'll buy more and pay more sales tax.  They'll have more money to afford their mortages and buy bigger home that are less likely to be foreclosed.  Bigger homes pay more property tax.  You'll be giving more money to local governments at the expense of the giant federal government.

But, I'd also increase the income tax rate for other incomes.  At least until the government can get their wreckless spending under control.  So, instead of 25% taxes for up to 50k, let's increase it to 35%.  Everything you make over 50k is taxed at 10% higher than before.  You still get the first $50k for free.  If you are married and filing jointly you get the first $100k for free.

I have to go research this some more!  Please feel free to point out the errors in my logic.  There are always error in my logic.

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