Daily Archives: January 1, 2013

JUST PRINCIPALS OF TAXATION

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The truth is that for anyone working for a wage there shouldn’t be tax deductions for anything such as house depreciation, health expenses, charitable contributions and all the other excuses for keeping tax accountants busy with make work schemes.  There can be a yearly adjustable national sales tax to support all the growing numbers of unemployed and destitute and a flat tax of some percentage on all gross income earned. The tax code could be so simplified that even those living in bunk beds in overcrowded urban apartments and working for a fixed wage should understand how to calculate their taxes.

There should be no capital gains or inheritance taxes for private individuals or capital gains taxes for businesses as long as the capital gains are obtained legally.

A tax which is a fixed percentage of the gross income can be charged for monopoly businesses and non-monopolistic businesses should pay minimal tax percentages if they pollute the environment with toxic chemicals.

In a conglomerate business if one part is a monopoly or if one part pollutes the environment with toxic chemicals then it should be charged a fixed percentage of the gross income.  Non monopolistic, non-toxically polluting businesses should be encouraged to grow freely with no percentages of gross income being taxed until they too someday become monopolies and then they can be taxed at an appropriate rate.

Two or more non monopoly businesses may conspire to set prices for the same basic product in effect creating a monopoly situation.  If this can be proved in court then all those businesses would be required to pay a percentage of their gross income to the government which would assume that they were in fact monopoly businesses.  Price setting would be a crime punishable by taxation.

The IRS should still be in a position to audit a taxpayer or a business so that there can be a check on whether any illegal money is being laundered.  Illegal syndicates should be vulnerable to charges of tax evasion to keep clandestine criminal activity to a minimum.

Having a cashless society will minimize cash laundering and it will make the hiding of illegally obtained money more difficult.

IRS rules for business deductions would be greatly simplified if the tax is a fixed percentage of gross income and this could greatly simplify the unnecessary bureaucracy of the IRS and the unnecessary complexity of accounting rules which primarily deal with depreciation and business expenses.  The IRS should not be totally eliminated as long as there is crime in society but the rules of the IRS can be greatly simplified and should not be a compilation of thousands of pages with special deductions for special interest businesses.

The truth is that a flat tax on gross income is the most efficient and just form of taxation for both individuals and businesses.  Three different flat taxes on gross income can be imposed on individuals, non-monopoly polluting businesses, and monopoly businesses.  Individuals should have the second smallest flat tax and monopoly businesses should have the largest flat tax.

Non monopoly non polluting businesses should have no tax on income so that they can compete and grow to become efficient monopolies and then be taxed.  Non monopoly businesses would still have to report their profit to the IRS and prove with actual receipts how their income was gotten if they become audited.  This is to avoid businesses from becoming money laundering organizations for illegally obtained money.

Non-profit businesses or organizations can continue to exist but the laws governing their status should be updated so that their existence should be justified as being for the general welfare such as a charitable purpose, a disease foundation, or one dedicated to improving the environment.  Managerial rates as high as 80 or 90% for non-profit organizations should be a red flag that they are not ethical organizations and that the leadership is in it primarily for personal gain.

The truth is that companies manufacturing or promoting solar energy should not be taxed at all nor subsidized by the government.  No other renewable energy source research or businesses should be subsidized by the government. All other renewal energy sources are a waste of time, energy, and money in the long run.  They just never will be efficient long term sources of energy and as non-polluting as the sun.

The government may only actively promote solar energy research with taxpayer’s money but it should not subsidize other renewable energy sources such as alcohol production which is not cost effective and even environmentally harmful.

The government is not smart enough to promote or subsidize an efficient renewable energy source which is also cost effective in the long run.  Solar energy is the only exception where government participation in solar research should not be harmful or very wasteful for the long term.  The only danger that the government involvement poses in the solar energy field is that it may pass laws that permit or mandate that only inefficient solar cells are to be produced thus eliminating the incentive for further solar cell research into higher and higher efficiency.

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