Interesting idea in today’s WSJ … introduce an alternative maximum tax.
Here’s the gyst of the idea:
We need an alternative maximum tax as a simple, rough-and-ready way to limit the economic damage of increasing taxes.
How much is the most anyone should have to pay? When do taxes indisputably start to harm the economy and produce less revenue — when government takes 50% of people’s income? 60%? 70%?
I like half, but the principle matters more than the number.
Once the country settles on a number, each of us gets to add up everything we pay to government at every level: federal income taxes, yes, but also payroll (Social Security, Medicare, etc.) taxes, state, city and county taxes, estate taxes, property taxes, sales taxes, payroll taxes and unemployment insurance for nannies, household workers, or other employees, excise taxes, real-estate transfer taxes, and so on and on, right down to your vehicle stickers and those annoying extra taxes on your airline tickets.
Once this total hits the alternative maximum tax, you’ve done your bit and federal income taxes can take no more.
You compute federal income taxes as usual, but then you get to reduce the “tax due” that the total is less than the alternative maximum.
For the dude’s supporting argument, see the the article America Needs an Alternative Maximum Tax
The plan has some holes, but it has potential …
Tags: Alternative Maximum Tax