Tax and Budget Reform


A Simple Tax Reform

While the President is where the annual budget request originates, its Congress that controls where the money is raised and spent. It is within the powers of Congress to submit to the President as part of the budget process any changes that might be necessary. We are long overdue for a new and fair tax code. While my proposal is a very simple approach, it could solve in a single year what the overly complex current system hasn’t been able to accomplish in decades. Without any massive cuts to any necessary programs that need federal funding.

Using statistics from the US Census Bureau and the Internal Revenue Service, I created this chart to give you a very simple (although rough) and incomplete example of how changing our tax code to a straight 15% might work for individuals and approximately the 18,204,679  currently registered businesses in the United States.

I want to remind you that this lacks complete details as I want to save you hours of reading and days of typing for myself. For each “bracket” I used the lowest dollar amount for everyone at that rate up to the next “bracket”. These figures also lack any tax deductions and corporate or personal losses. The wide range of each “bracket” does simulate those deductions and declared losses for a tax year.

I am NOT excluding incomes above $500,000 per year. Trying to find accurate data on just how many people earn salaries above that figuire proved difficult to extract without a considerable investment of time and resources. Just remember that their taxes will help contribute to the final tally at the end of this proposal.

There are approximately 93,898,000 working men and women in the United States earning $49,000 or more.

$500,000 x 3,708,000 = $1,854,000,000,000
$200,000 x 6,260,000 = $1,252,000,000,000
$199,000 x 6,040,000 = $1,201,960,000,000
$149,000 x 15,320,000 = $2,282,680,000,000
$99,000 x 14,100,000 = $1,395,900,000,000
$74,000 x 20,890,000 = $1,545,860,000,000
$49,000 x 27,580,000 = $1,351,420,000,000
——————
$10,883,820,000,000

15% proposed flat income tax = $1,632,573,000,000
less the 6.2% for Social Security = $674,796,840,000
less the 1.45% for Medicare = $157,815,390,000

gives us $957,618,344,610

As I mentioned above there are approximately 18,204,679 registered businesses in the United States. Ranging
from self-employed individuals making profits of more that $50,000 to corporations with 10,000 or more employees.
This is an over-simplification, but is realistically close enough to be reasonably accurate.

1,811 (10,000+ employees) x $3,680,000,000 = $6,664,480,000,000
1,707 (5,000+ employees) x $3,406,832,500 = $5,815,463,077,500
4,180 (2,500+ employees) x $2,723,167,500 = $11,382,840,150,000
7,158 (1,000+ employees) x $1,839,975,000 = $13,170,541,050,000
15,811 (500+ employees) x $920,012,500 = $14,546,317,637,500
37,034 (250+ employees) x $460,006,250 = $17,035,871,462,500
162,103 (100+ employees) x $230,003,125 = $37,284,196,571,875
297,156 (50+ employees) x $57,500,781 = $17,086,702,078,836
843,158 (25+ employees) x $14,375,195 = $12,120,560,665,810
1,339,184 (10+ employees) x $3,593,798 = $4,812,756,780,832
2,100,398 (5+ employees) x $1,796,899 = $3,774,203,065,802
7,580,324 (2+ employees) x $224,612 = $1,702,631,734,288
5,814,654 (self-employed) x $50,000 = $290,732,700,000
————————————
$139,029,481,454,943

15% proposed flat corporate tax = $20,854,422,218,241
less the 6.2% for Social Security = $8,619,827,850,206
less the 1.45% for Medicare = $2,015,927,481,096

gives us $10,218,666,886,939

 

The 2015 Federal Budget
From the National Priorities Project
the Federal Budget from 2015

Our Current Federal expenditures = $3,688,000,000,000
Our Current Federal debt = $18,150,000,000,000

Tax Revenue $2.05 trillion – Federal Funds 55%
Individual taxes $1.48 trillion
Corporate taxes $342 Billion
Other $156 Billion
Customs Duties $35 billion
Excise taxes $38 billion

Tax Revenue $1.13 trillion – Trust Funds 30%
Social Security and Medicare $1.07 trillion
Excise tax $58 billion
Customs Duties $1.7 billion
Other $2 billion

Borrowing – 16%
$583 billion

Discretionary Spending $1.11 trillion – 29.34%
Military $598 billion
Government $72 billion
Veterans Benefits $65 billion
Medicare and Health $66 billion
Education $70 billion
Housing and Community $63 billion
International Affairs $41 billion
Energy and Environment $39 billion
Science $29
Transportation $26 billion
Food and Agriculture $13

Mandatory Spending $2.45 trillion – 64.63%
Medicare and Health $986 billion
Social Security $895 billion
Labor $319 billion
Food and Agriculture $122 billion
Veterans Benefits $95 billion
Transportation $58 billion
Other $58 billion

6% of all spending
Interest on debt $229 billion

Budget Analysis and Comparison

Individual Income Tax
15% proposed flat income tax = $1,632,573,000,000
less the 6.2% for Social Security = $674,796,840,000
less the 1.45% for Medicare = $157,815,390,000

$957,618,344,610 income for the Federal Budget

Corporate Income Tax
15% proposed flat corporate tax = $20,854,422,218,241
6.2% for Social Security = $8,619,827,850,206
1.45% for Medicare = $2,015,927,481,096

$10,218,666,886,939 income for the Federal Budget

From the 2015 budget
Discretionary Spending             $1,110,000,000,000
Mandatory Spending         $2,450,000,000,000

$3,560,000,000,000 total spending for the 2015 Budget

Individual tax revenue    $957,618,344,610
Corporate tax revenue   $10,218,666,886,939

Total tax revenue        $11,176,285,231,549
less the 2015 Budget – $3,560,000,000,000

$7,616,285,231,549   SURPLUS in the first year, and this doesnt include the income taxes for individuals earning over $500,000 per year.

 

Critics will argue that the solution is too simple. I’m forced to ask….. What is wrong with simple when complex obviously doesnt work? Every week we all go to work, earn our wages, and then simply pay our bills (when we have enough money). Why cant the government accomplish the same things we do with the same simplicity?

By simplifying our tax code and using a budget with a proper amount of incoming revenue, our government could realistically pay off our debts and actually afford to support itself without foreign investors. This would be a critical first step to not only correcting America’s problems but creating the financial momentum necessary to re-establish a vigorous economy.