Means testing not Mean Policies

There has been a lot of discussion lately concerning the GOP tax reform push.  Ostensibly, this was advertised as the first real tax reform since the 1980's.  The tax code is too complicated, which it is.  There are too many loopholes, which there are.  Taxes are a burden to the American worker and the business community.  Hm, not so sure about that one, but I will circle back later.

History seems to indicate that the buying power of the average worker has been eroded, beginning with high inflation rates during the 1970's, followed by tax cuts to those in the upper income brackets, a surge in the availability of cheap labor throughout the world, the ease of corporations to move their "headquarters" to where ever taxes were less, and the focus away from quality goods at a fair price to selling whatever generated the highest profit. 

Certainly, some of the above will not be fixed by lowering tax rates for the biggest corporations and richest individuals, but instead will increase the burden on everyday people who will be faced with tax burdens passed from federal to state to local (the real trickle down economic theory), or cuts in basic services to the neediest among us, or both. 

I recently mentioned to a sibling that I do not find my tax burden all that high.  Perhaps I am lucky, perhaps I am misinformed, but with mortgage, SALT, education, and charity deductions, along with the standard deduction per head, I find my final tax rate to be more than acceptable, if I consider that my taxes pay for

- environmental safeguards
- a strong military
- a mostly free interstate highway system
- relatively safe food sources
- reasonable health care costs and access to above average health care providers
- education system up to 12th grade
- security of knowing social security and Medicare will assist the navigation of my senior years when income will be static
- much more that I am sure I could list if I spent more time

Now, of course, we can all debate on how to distribute those tax monies.  More here, less here, etc.
But, are we really not getting our monies worth? 

In the past I have proposed a floor for all tax rates meaning that if the rate for your income is 35%, you may take deductions down to 20%, no more.  Perhaps the only bracket that can result in 0% rate would be for those whose income puts them at the poverty level or below, but I would eliminate tax credits that result in people receiving a refund greater than the tax they have paid.  The tax system should be just that, a system designed to collect the monies needed to run the government, not a system for helping the poor.  Those programs should exist on their own, paid for by the taxes collected!

As an enhancement to the floor tax rates, there should also be means testing for most, if not all of the tax breaks.  Certainly one home owners should have a mortgage deduction.  Perhaps even a partial for a second home.  But nothing after that.  This is especially true for the hundreds of business expenses that can be written off.  The neighborhood hardware store should be able to take full advantage of tax credits to help him/her create a successful business.  But mega-corporations don't need all those advantages.  Means testing would put a scaled limit on all those tax write-offs so that all businesses up to a certain size get the same credit in actual dollars.  Once the top of the scale is reached, credit ends. 

It is well known that upper middle class tax payers end up paying a higher percentage of their income in taxes than the very rich.  With some type of floor philosophy along with means testing, no individual making $150K per year should ever experience the dubious distinction of paying a higher tax rate than Warren Buffet or General Electric.

Can we spend a little less at the federal level?  Of course, all large entities have fraud, duplication, inefficiencies, and outright misappropriations.  But we cannot continue to behave as if deficit spending can go on infinitum.  The dam will break, eventually, and it will be the middle class who will bear the burden of its collapse.  For all the talk about kneeling or standing for the anthem, and who is more patriotic, who isn't, perhaps it is time to link the patriotism question to the tax rate one is paying.  To me, wearing a flag on one's lapel while stashing millions of dollars off shore in a tax free haven negates the meaning of the flag pin.  Perhaps, instead of railing at athletes who kneel during the anthem, the president should publish a list of the richest people who pay the least taxes!

Oh, that's right.  President Trump brags about how little taxes he pays!!

A true patriot might realize that every dollar saved to enhance one's wealth, every dollar written off to improve earnings shares, every dollar withheld from the government so that one more big house, or car, or diamond ring can be purchased, is one less dollar paid to our active military soldiers, one less dollar for veteran care, one less dollar for border security, one less dollar for local police, one less dollar for teaching supplies, one less dollar for choose your favorite government provided benefit. 

As for the tax burden preventing American business from thriving, well, yes, small businesses are undoubtedly hurt by the tax system.  This should be the litmus test for any tax reform.  Does it help the small businessman and middle class worker more than anyone else?  If not, then tax reform is just another money shift to the top.  Did we learn nothing from Reaganomics?

Means testing not mean policies.