I know that I reverse positions frequently, and people can fault me for that. I think it's a strength when there is real complicated circumstances at play, but can be a weakness when things are more stable. At any rate, I do think we're at a real inflection point here. I think the fundamental test that we now face, and will soon have the answer to, is whether global equity markets can rise despite a "soggy" U.S. economy (someone used that word on Bloomberg this morning, and I like it). Good luck with your trading, everyone. * The U.S. Tax Code needs to be thrown away, and a flat tax needs to be instituted. Trying to figure out the 50,000 page + tax code is insanity. We need a postcard sized return, where we plug in our income, calculate a fixed percentage, and send a check, period.
I think a national sales tax would have to been increased greatly, since we already have one in most states. This would hurt GDP and cause a recession for sure. That said I think the economy is in for a guranteed slowdown, whether it be a recession or stagflation. How about a national tax on gas. WY has no income tax, but a hefty tax on gas. CA has both. Unfortunately, the lobbyists will do whatever the can to keep the status quo. There are many ppl. employed due to it. I am in favor of some form of flat tax, but until then I am going to exploit the tax code like any other good business person should.
Imo, Our tax code is designed to get people to take certain actions based on tax consequences. It'll never change. On a basic level for example, credit card interest deductions were removed, hence the home re-fi's.
Just remember that the current tax code started as a flat tax. Look what it got us. No point making the same mistake twice. I agree with the gas (actually should be fuel) tax idea. Make it high enough to fund the entire federal stupidity and eliminate all payroll taxes. We'd have gas priced like Europe, but we could fund renewable fuels research and end our imported oil dependency, budget deficit, and trade deficit problems all in one fell swoop.
The current tax code is an absolute nightmare, but I don't see any major changes anytime soon. Too many people would lose their jobs, including many government employees, if they actually simplified things. I'm not sure how a tax on one specific thing, like gasoline, would work. It would just force people away from that one good or service and towards others. I think either a flat income or sales (consumption) tax would be fairest, but, like I said, I won't hold my breath.
If you really want a change, DO SOMETHING and check out this organization. Saxby Chambliss, a Georgia republican is actually sponsoring a flat tax bill as we speak. Join the grassroots effort to get a fair and equal tax that we can actually understand. http://www.fairtax.org/site/PageServer?pagename=about_main
Are all you flat tax advocates willing to give up your mortgage interest deductions? Personally I think it is a great idea as long as there are no loopholes that can be squeezed through and that all income (cap gains too) is included in the equation.
I'm willing to give up ALL deductions for a fair tax with NO loopholes as long as it's so simple anyone can understand it. I'd love to put the IRS and tax accountants out of business. The problem is that the CPA lobbyists will spend millions to prevent this from happening and our "elected" politicians will line their pockets with it.
Bingo! Accountants/CPAs, Tax Attorneys, those in the audit field, etc. have been fighting simplification for decades. 18% flat tax on all incomes above a certain level. No deductions. X makes Y. Y x 18% = tax due. There's your filing. Total time? 1 minute and 30 seconds. No expense of accountant or even tax software. I wouldn't be opposed to a national sales tax, either, as long as there is a definitive cap. Encouraging savings is a good thing, especially since the baby boomers are going to screw us over so badly, it isn't even funny.