As President Obama released his plan to trim the nation's defecit, one piece in particular has caught the attention of Congress -- the so-called Buffet Tax, named for billionaire Warren Buffet, which would raise the tax rate on the nation's rich. Already, the Republicans are claiming the so-called "Tax the rich strategy" to be worthless.
Ah, politics -- what one side of the congressional aisle loves, the other side loathes. It's amazing anything gets done in Washington.
Now, back in 2005, Steve Forbes, who was a candidate for President, outlined a very simple, straight-forward plan for easing the national debt by completely throwing out the current tax system.
Basically, the plan replaces the current tax code with a pro-growth, pro-family tax cut that lowers tax rates to 17% across the board, and expands exemptions for individuals and children, so that a family of four would pay no taxes on the first $36,000 of income.
Forbes' Plan had two parts. The first part is where any monies up to $36,000 earned would be tax free for individuals and families.
I like the plan already.
The second part said that any monies over and above the $36,000 would be taxed at a flat rate, meaning whether you were middle class or super rich, you all paid the same percentage rate -- 17 percent.
So, if you were a millionaire and brought in $1,036,000 in annual revenue, you would be taxed 17 percent of $1,000,000 or $170,000. If you were a middle-class family of four who brought in $64,000, you would be taxed 17 percent of $28,000 or $4,760.
The flat tax would be simple. As Forbes said on the campaign trail, you could fill it out on a postcard. It would eliminate the principal source of political corruption in Washington. Most of all, it would be honest and fair, and millions of people would be off the federal income tax rolls.
Think about it fully -- there would be no tax on Social Security. No tax on pensions. No tax on personal savings. It would zero out capital gains taxes. It would set off an economic boom, by letting people keep more of what they earn and by lowering the barriers to risk taking by investors.
But -- then we get back to politics and partisan bickering. Many of those politicians say we can't afford a new tax code. Perhaps the reality lies in the fact that we don't really need these particular politicians. I for one am looking forward to voting them out in 2012.