A Simple Tax and Social Services Plan

   

  I must start this post by writing that I believe that all direct taxes (income tax, etc.) are evil and actually a form of armed robbery or a "protection" scheme.  I also disagree with the concept of "redistribution of wealth," which means in reality stealing from one person, taking a healthy cut, and giving what is left over to another "more deserving" person.  Direct tax schemes are used in the United States as much to control the populace and enhance government power as they are to raise revenue and should be eliminated.  That being written, I believe that direct taxation, redistribution and economic extortion via tax code have become entrenched in the American system.   The people cannot rid themselves of these evils quickly.  Until we do get rid of them in favor of a more humane system, we should at least perform the functions of direct taxation and redistribution in a way that is efficient and that does the least to enhance government power via tax code extortion.
     I cannot take full credit for what I propose here, Milton Friedman and others have proposed similar programs.  I propose that we create a simple tax system that guarantees each person in the United States a minimum income and taxes people more evenly, based on their income.  After consulting the Federal Poverty guidelines, I believe that that we should set a minimum income of $10,000 per year for each adult and $7,500 a year for each child.  Each person who makes below this level would get a check from the government for the difference.  Each person who makes over that amount would pay 10% of the excess in taxes.  No long forms, no adjustments, no deductions, no loopholes are allowed.
   
     How would this look with three families of four, two adults and two children?

Family "A" has $20,000 a year in income.  Their minimum income is $35,000
( 2 adults X $10,000 = $20,000 plus 2 children X $ 7,500 = $15,000 = $35,000 total)
Since their income is only $20,000, they would receive a check for $15,000 after they file their tax return.

Family "B" has $35,000 a year in income.  Since they are at their minimum, they would not receive a check, but would not pay any taxes either.

Family "C" has $50,000 a year in income.  Since they make $15,000 annually over the minimum, they would pay $1500 in taxes.
($50,000 income-$35,000 minimum = $15,000,  $15,000 X 10% = $1500)

Another example:

An elderly couple who lives off of their savings (no income).  They would receive $20,000 per year to supplement that savings.  (2 adults X $10,000 = $20,000 total.  $20,000 - $0 income = $20,000)

   This simple tax system makes sure that every American would have a minimum standard of living and also that taxes are collected purely to raise revenue, not increase government power.  This simple method of taxation eliminates divisive programs such as TANF (welfare), SNAP (food stamps) and public housing.  It would also replace Social Security and corporate welfare in the form of "tax credits."  It would shrink the Department of Health and Human Services (HHS) and the Department of Housing and Urban Development (HUD) to a level where they would no longer need to be cabinet level agencies.  It gets rid of the need for a minimum wage law.  The greatest benefit of this simple tax system is that it takes away the government's power to use economic coercion to make us eat more corn, buy solar panels, buy a bigger house than we can afford, build fast food restaurants in China or whatever other actions we can take to benefit politicians' friends and supporters at our expense.