How can we change the tax code to ease the burden on our families and promote growth and innovation?

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Yahoo! Answers Staff Note: Watch a video of Mitt Romney discussing his tax philosophy. http://video.yahoo.com/video/play?vid=39…

I want to thank the more than 12,300 people who took the time to respond to my question. The volume and the exasperation of these answers speak to the unnecessary and stifling burden that our current tax code imposes on the American taxpayer.

Answer 1

Best Answer - Chosen by Asker

Make it easier to understand and comply. It shouldn't take a college degree in accountancy and tax law to do one's own taxes. We are a simple family with no rental income, few investments, etc., and yet it is an incredible mental burden to do our own taxes. The legal language and myriad of deductions, exemptions, and exceptions are, frankly, ridiculous. Without so many rules and regulations, taxes would be easier and people couldn't cheat so much, either. And the IRS and state revenue departments wouldn't have to spend so much manpower catching cheaters.

Asker's Rating:

Asker's Comment:

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Answer 2

Are you kidding? Stop taxing people who make piddle, and START taxing the super rich more...silly that after so many millions they aren't taxed anymore! Tax the Hilton family a little harder and I bet you can pay for this WAR.

Answer 3

If you want to generate more revenue for the government, you need to cut taxes even further. History has shown us through Kennedy, Reagan, and Bush II that reducing tax rates will exploed the revenues flowing in to the federal treasury.

Answer 4

Well my question is: what ever happened to the proposed Flat Tax? It has been tossed around for years, but no progress. I think this would be so much easier for all involved. Just for argument sake if we structured the taxes so that incomes under $10,000 did not pay tax and then a flat tax of 8 - 10% on incomes from $10,000 to $25,000, and 15% on incomes over $25,000 with no deductions or reductions of the income I think this would solve so many problems.

Too many people with large incomes are not really paying their fair share, and I'm not sure I can say I blame them. I don't think it is right for the Gov. to penalize someone for being successful. Under the current system, someone that makes over $335,000 (approx, I don't remember the exact figure) ends up paying over a third of their income to the Gov. I know I'd be upset, what gives the Gov the right to take so much of their income just because they do well? Not only that, the founding fathers of our country were against a graduated tax, and yet here we sit with one in place.

Answer 5

The guy who said tax the rich more is obviously unaware of the proportion of tax already paid by upper incomes, and that low income people don't pay much income taxes and in many cases, actually receive more than they had deducted due to the EIC.

Changing the tax code without reducing spending just ends up with other kinds of taxes, or the most regressive tax of all, inflation. So in my opinion at least, the key is controlling spending. Anyone who pretends there isn't pork left is kidding themselves, but it sure helps congressmen get elected - I know it does in my district.

Answer 6

The notion that a person or family living on their own with a taxable income of $10,000. must pay between $1003. and $1126. federal income tax, or of $20,000. taxable income, who must pay between $2249 and $2626. is just mind-bogglingly outrageous or laughable, take your pick.

ADDED: The EIC takes off some of the edge, but not enough to buy one out of the Poverty Level.

I believe corporations and CEO-types are able to tuck their exhorbitant sums of money into "investment"s and loopholes that are not available to, or even known by, most of us.

The 35% personal tax rate is okay up to a certain amount of income, but not to infinity.

I say these things because the income gap in this country continues to expand.

That being said, there is just too much money being spent and borrowed by the government!

How to fix it? That's the eternal question. In a rigidly 2-adversarial-party political system that always hovers around 50/50, I don't have a lot of hope.

Answer 7

there is no hope,, none.

Answer 8

Flat tax please. That's all.

Answer 9

Like that will ever happen. An across the board flat tax 15-18 % for everyone. Rich poor and in between. lets have the wealthy start supporting this nation as well as the working man. Thanks for asking.

Answer 10

scrap the IRS!
why do we, as Americans, have to live in fear of an examination, or audit

the Flat Tax has all the trappings of the current system.

A brand new approach - pay at the 'pump'
or cash register - and use the Fair Tax!

Over 20 years ago, we asked the brightest minds ($2 million worth of our own money) to evaluate:
1. Current System
2. Flat Tax
3. Fair Tax
4. What have we not thought of (Value Added Tax?)

Overwhelmingly, the Fair Tax was the Answer.

Everybody pays - no exclusions! That's F A I R !
And yes - the rich will pay MORE!

So we eliminate the Alternative Minimum Tax, Capital Gains Taxes, Inheritance Taxes, Gift Taxes, Savings Taxes, Social Security, Payroll, and Medicare Taxes - WHILE

fully funding Social Security, Medicare, and all government programs!

So Let's repeal the 16th amendment! And enact the Fair Tax! S25 and HR 25

Just did my taxes - here's what it means for me
taxable income $23,769
Payroll/SocSec/Medicare - $3,825 - $521 refund=$3,304 paid
Under Fair Tax I would keep the $3,304 and the prebate of
$2,292 for an increase of 28.6% in TAKE HOME pay!

How would that affect my economy? An additional $5,596!
And what if my boss gave me the matching Soc Sec?
$1,497 more -
The Time is NOW

Source(s):

http://www.fairtax.org

Answer 11

The one page tax sheet. It it's that easy for millionaires, it should be that easy for the "rest" of us too. From TX.

Answer 12

Put the heaviest taxes on businesses that send American jobs overseas, or who hire illegal aliens. Or better yet: Take the businessmen who do that and put them in prison for life. Make it a felony for the guards to give them more than a slice of bread and drink of water per day!

Answer 13

The flat sales tax idea is interesting, but taxes are used for social engineering as much as anything, which would be much more difficult with a sales tax. Besides, if we have a sales tax, that just allows all those millionaires to stash all their money away and not get taxed on it, since their groceries don't cost more than ours. (Sure, their cars do, but that's negligable compared to an income tax.)

What I would explore would be doing your tax forms in advance, indicating dependents, your standard deduction for your filing status, etc. Then that equates to a certain percentage taken off your pay, and you don't have to worry about possibly owing money because you under-withheld. It's pay as you go instead of guess how much you'll have to pay a year from now and then cross your fingers that you've paid enough. (Or cross your fingers that you've paid too much, which I think is silly. I'd rather have the deductions right and earn interest off my money than let the government hold it for a year.)

Stuff like credit for moving expenses and business expenses would have to be realized in the following year, where you'd get credit from what gets withheld. (I had to move near the end of 2005 and hadn't planned on it, so in 2006 the first three paychecks don't have anything deducted to "credit" me what I'd normally "deduct" from my taxes. After that it would go to the normal percentage.)

Answer 14

I first would like to say I think Gov. Romney is a great American and will make a great future president. I would like to see the federal income tax abolished and the 16th amendment repealed. A national sales tax would replace the income tax. Sound economic policy offers the taxpayers the proper incentives. The income tax is unsound because it creates a disincentive to earn more money. A sales tax is more consistent with sound policy making because it creates a disincentive to spend. I'm also in favor of abolishing the capital gains tax as well.

Answer 15

Personally, I'd like to see one major change in the income tax code, and it will make life much, much easier for struggling seniors.

I propose that couples over the age of 65 do not pay income tax on the first $50,000 of earned income. Single individuals over 65 do not pay tax on their first $25,000 of income.

This simple measure will provide more usable income to seniors and ease the pressure on Social Security. It will provide a net effective increase in spendable money for that age group--which will of course go back into the economy directly and help boost the job base and the GNP without having to filter that money through the government.

Any immediate lost income tax revenue can be recaptured through other means, but I believe that long-range this will save on public money because of the bump in economic growth and standard of living.

People over the age of 65 who choose to work in higher-paying jobs will pay their regular income taxes on that income. And, of course, IRA money that was invested "tax-deferred" would still be taxed upon withdrawal.

President Roosevelt promised that no one would ever pay income tax on Social Security income. Seniors deserve to have that promise kept--they won World War II, beat the Great Depression, and propelled this country through the greatest economic growth that the world has ever seen.

I say let them retire and enjoy the good life. They've earned it!

Answer 16

First, shut down the un-necessary agencies (to reduce costs). Then switch over to a flat tax.

By the way Mitt, you're my current pick for POTUS.

Answer 17

Just have withholding - no taxes filed at all, except for corporate and "self employed" - similar to the method Japan had for years - and if there are special credits, people can choose to file, but if they just want to have withholding (which will be pre-set based on income / dependents), it will cut down on a tremendous amount of fraud and cheating anyways.

Answer 18

This whole idea we can offshore and outsource every aspect of our economy just doesn't wash. Paying $50k per month for mercenary soldiers, passing out tax cuts to the wealthy by selling off the debt to China, and claiming illegal immigrants are good for the economy are just some of the whitewashing going on. There is no tax cure. There are corrective economic forces shaping up. Reagan used to reflect fondly upon his boyhood growing up in the Great Depression. Such another era is upon us. It will be your job to persuade Americans that patriotism involves a lesser economic dream. Much lesser.

Answer 19

Stop corporations from spending money to find loop holes and write offs in general. Propose a flat tax of 10-15%. But the government should step in and stop corporations from using loop holes and write offs to their advantage. As well we should propose a luxury sales tax on large investments. I do not wish to penalize people for being successful, my father is quite wealthy himself, but there is a good amount of money to be made off of a luxury sales taxes.

Answer 20

The Government is a service. I would prefer an Invoice, with an explanation of the services rendered. Just like I get from my electric company or any other vendor.

And I would also like the ability to switch to a competitor if they were more effective and efficient.

People vote more responsibly when their own pocket-book is involved.

Answer 21

If your question is sincere, I will answer it in like manner.

The current tax structure is one sided, placing burdens on the lower end of the social structure in America.

Corporations shun paying taxes. They've invented phony tax schemes and hire top tax consultants that explore ways in which to export taxes due.

The way in which business gets done today leaves so much to be desired.

As Congress spends what America doesn't have (national debt), we find more and more corporations looking to save by eliminating workers and sending operations to foreign countries.

This scenerio continues since the coporations feed our elected officials, thereby making our vote insignificant.

As more and more workers get marched off from downsizing, our tax base gets more and more depleated...so the question remains...who will be around to pay up?

Any candiate who expects to turn direction on this tide that seems to be working, will have to make it perfectly clear that they are declaring war on the corporations and expect them to pay their taxes as they go about manipulating workers to the satisfaction of the corporate executives who have golden parachutes for renumeration.

Nobody has stepped up to the plate so far.

Hilary Clinton once made comments supporting what I explained, but they soon disappeared into thin air.

For her careless vote supporting Bush's war, I would forgive her if only she made a stance on this issue that ranks high along with endeavors to try and help planet earth a bit.

Six or seven years of reckless spending has gotten us a nine trillion dollar national debt and dependence on foreigners.

What candidate will change this and turn us into the right direction?

I'm for spending our national treasure on endeavors that make sense...energy independence and environmentally friendly newer sources.

With almost seven years being squandered, we need somebody who will make a statement and stick to it.

Follow the model the California Governor is making.

He's Republican, last I looked, but has a good program in progress.

Matters not what party...what matters is saving our families, promoting our hard workers, fixing planet earth.

A real champion politician will pick up the ball and run with this. By offering incentives to business, we can get them to focus more on the taxpaying multitudes rather than the few who use phony gimmicks (ENRON).

Are you up to the challenge?

Guess not.

Source(s):

The World Almanac, book of FACTS, shows how corporations pay about half what individuals pay in taxes.

Answer 22

By raising taxes on the rich and reducing the them for everyone else. Can't someone who makes say, 15 million dollars (the average salary of a S&P 500 CEO) afford to pay a higher percentage of their wealth than someone who makes less than $75000 a year? A rising tide doesn't lift all ships, no matter what anyone tries to say.

Answer 23

What we need to do is have a government that spends wisely.
being a registered republican, i am very upset at my party"s lack of fiscal responsibility.
the deficits are there and they grow, nothing is being done about it.
We need to seal our borders and export illegals back to whence they came.
there is no ' homeland security ' !

allow all retirement plans to escape taxation.
no social security unless a citizen.
tax credit and the deficit will shrink drastically.
definitely no socialist programs like raiding oil companies bank accounts in violation of the 4th ammendment.

this is a good start.

Answer 24

Flat tax (and I am not low income).
Also, I do not believe that those who have no children to deduct from taxes should be expected to pay taxes towards schooling for those who do have children. They have the advantage of more annual deductions, I have the advantage of lower property taxes. Probably more adjustments of this sort could be found (e.g.- no library card? no public library tax).

Answer 25

Flat tax, or a luxury sales tax. Eliminate everything else. Cut all federal regulation that does not involve interstate regulation or infrastructure, or the military. Eliminate everything else.

Answer 26

STOP GIVING TAX BREAKS TO BILLIONAIRES.

AND GET US THE HELL OUT OF IRAQ. $400 BILLION AND NO END IN SIGHT. WHAT A DISASTER.

$400,000,000,000!!!! BURDEN THAT, MITT!


added:
55 Thumbs Up votes, and 58 Thumbs Down votes so far. The only logical explanation is that 58 billionaires read my post and objected to my suggestion for getting rid of their tax breaks. Nothing else makes sense, really.

added:
Some people (such as James D, below) think that the extremely wealthy are already paying more than their fair share. His reference shows a graph which clearly shows that the wealthy pay a higher percentage of tax than the poor (it's REALLY obvious if you just look at the picture and don't do any research). He also claims that evidence of the past 50 years shows tax cuts = economic growth.

The question is, who is benefiting from all that economic growth? For starters, it is helping the billionaires who are paying less taxes (that seems obvious). In 1979, the top tax bracket was 70%. This dropped to 50% under Reagan in 1982, and again down to 38.5% in 1987 (interesting that the reduced tax revenue didn't seem to curb spending, but we'll get to the deficit later). It should also be noted that, historically, the top tax bracket rises during war time (77% during WW1, and as high as 94% during WW2). The Iraq War (did I mention it has cost $400 billion so far?) is unique in that the tax rates have not been changed to pay for it.

But, all this tax money saved by billionaires "trickles down" and helps everyone, right? Wrong. The incomes of the wealthiest Americans have skyrocketed, while the incomes of the middle class and poor have stagnated. Since 1967, inflation adjusted income for the richest 5% has increased by 74%. When you look at the richest 1%, the increase is even more dramatic, especially if you are a CEO http://www.epinet.org/content.cfm/webfea…

Over the same time, household income for the middle class (50th percentile) has increased just 30%. Since 1999, the median income in the United States has gone down.

http://en.wikipedia.org/wiki/Income_tax_…

So, the wealthiest Americans are now earning more money AND paying a lower tax rate. Meanwhile, everyone else has stagnant wages and are paying about the same in taxes. Did I mention that the federal deficit is approaching $9 trillion? That's $9,000,000,000,000 for those impressed by lots of zeros, or $30,000 per citizen in the United States.
http://www.brillig.com/debt_clock/ (I recommend hitting Refresh on your browser a few times at this site)

Who's gonna pay for it? (Hint: We're all bent over, but it is our kids and grandkids who will be getting the shaft)

Answer 27

www.fairtax.org
www.boortz.com
http://en.wikipedia.org/wiki/John_Linder
That about sums it up.

******Edit******
I thought that summed it up, and it seems to have done the trick for those with a little bit of schooling, ability to see past politics and see facts and truth for what they are, and those who want to improve things and look for answers rather than critique and bash and destroy.
Unfortunately a lot of answers contain the words "tax the rich" "the poor pay too much taxes" "tax the billionaires" Blah Blah blibbidy blah. My gosh I am starting to think that Dukakis is back from his expedition in the tank using subversive yahoo screen names in an effort to push through tax hikes.

I understand that it may be hard to pull yourselves away from the latest episodes of the O.C. or the guy lighting his fart on youtube but please just go here:
http://www.infoplease.com/ipa/A0923085.h…
And look at the picture. I am not even asking you "tax the rich" individuals to read. Just look at the picture please.

For the rest of us who can understand polysyllabic phrases not involving bowel movements or pop culture you will see from the listed site that while the upper 1% of wage earners hold 16.8 percent of the income in this country they pay 34.3% of all taxes collected. But maybe the visceral arguments being ballyhooed here are correct we should tax them more. Maybe until they pay all the taxes and we can just sit back and enjoy the parks and highways they paid for. Why would you look to punish people for thier successes? Simple illustration. You do really well at work your on fire the boss compliments you everyday your customers return over and over you are a model employee, and you always ask if the people in the drive thru would like fires with their orders. What does your boss do to show you that you are doing a good job:
A. Give you a raise
B. Take away half your pay check and tell you your not paying your share?

He will do A. Duh! And thats what the IRS should be doing. When they do good things happen. When they give into tax and spend policies (Answer B) bad things happen. See the Carter administration.

Also implementing "tax the rich" ploicies would also be disregarding historical evidence that has shown over the past 50 years that lowering taxes stimulates economic growth. Look at the early tax cuts of the Kennedy era, or perhaps those of the Reagan era. or those currently in place through 2010 (Extend them if nothing else Mitt) due to President Bush's effort (Boooo hiss) I know I shouldnt type his name in a public forum since moonbats have discovered the net but the tax cuts are the largest reason this country rebounded after 9/11 destroyed us economically and to just ignore history, recent or otherwise, is just plain dumb. This is a lesson Pelosi could learn from Jane Fonda (See Hanoi Jane vs. Pelosi in Syria) Alright I am done ranting now. A wise man said you cannot use reason to dissuade or persuade individuals who came to their unreasonable stance through no means rational. To put it simply those who want to understand will do the research and join the public debate and constructively try and bring change (FAIRTAX FAIRTAX FAIRTAX) and those who came to their tax the rich and billionaires should pay more taxes stances through no logic or rational will continue to stamp their feet and scream at sit ins and never understand why the people are pointing and laughing.

Answer 28

Dear Mitt, or Newt, or whatever...

I suppose one of your "hip" young consultants proposed this venture into Yahoo Answers along with sticking some sort of thumb into YouTube and, of course, MySapce. That said, I'd suggest you fire them were it not for that fact that you, Mitt, won't be reading this and they, Mitt, will. So in an effort to play nice, I will give your question all the deep thought it is due:

Want to "ease the burden on our families?" Well, that's one thing. While you stop short of saying "middle class" families, let alone "underprivileged" or even "working" families, I'll take that segment of your query at face value and say: tax the living sh*t out of the billionaires and corporations instead of struggling American families.

But then you continue, slipping in "...AND promote growth and innovation." That's different. If it's growth and innovation you want, tax the living sh*t out of struggling American families and cut all the corporations and billionaires as many breaks as you can get away with.

Hope this helps build the old platform.

Sheesh...

How dumb do you think we are, Matt? Or Mitt? Is it Milt?

Answer 29

With phoney, clueless politicians running the show it will NEVER happen.... our founding fathers set it up this way and it is still a private club for attorneys. the lower and middle classes dont count except as a target group to get you guys reelected.

Damn you. GO HOME

Answer 30

start taxing the super rich please. They should pay taxes and tax middle class people in a fair way not the other way around please!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!.

Answer 31

A flat tax is the only way to go. It is fair and it would be easy to understand the tax code. Doing taxes would take all of 5 minutes. Of course the tax code will never change because politicians only care about power. Therefore, if one party supports the idea, the other will fight it in an attempt gain more power. It is pretty sad. The politicians in this country are screwing "the people" for their own political gains.

BTW... Duncan Hunter is the only true conservative in the race.