Current tax system is fair, efficient
Many politicians, agencies and experts push for flatter tax systems. These “fair” tax systems lower the personal income tax rates of all Americans. Lower tax rates are popular, but what many fail to realize is that these systems would eliminate tax exemptions.
Politicians call this “broadening the tax base.” The base is what gets taxed. This broadening, for example, means you would lose your tax deduction for the interest on your home loan.
I’m still puzzled by why Americans beg for lower rates. In a poll by the Organization for Economic Cooperation and Development, the U.S. had the eighth-lowest personal income rates in the world. Countries such as Belgium pay on average a 55 percent tax rate. In the U.S., it’s 28 percent.
The U.S. has the highest corporate rates, but is this really a problem? General Electric is the nation’s largest corporation, yet it manages to pay almost no taxes. Companies follow in GE’s footstep, using “green energy loopholes” and filing as individuals. Boeing recently received $800 million in tax breaks to begin creating “Dream Lifter,” a competitor to the Airbus. These cuts provide Boeing and GE thousands of U.S. jobs.
Companies “know that they have more to gain by keeping much of their income untaxable. A high rate, applied against a very small income number, is still a low tax,” says Verenda Smith, director of the Federation of Tax Administrators.
America is a country that’s constantly attracting global attention. Our tax system is fair, efficient and provides a sufficient amount of revenue for our needs. I foresee another bill flowing through Congress, lowering more rates to please constituents. Whenever the big broadening of the base occurs, I want to see it unfold because a wave of worry will spread throughout the country.