So, last time I started talking about taxes, about which everyone has strong feelings and often inchoate reasons for said feelings.
My idea was to begin over with a simple notion – that people should pay in federal tax in proportion to what they receive of the national income.
Not hard to understand, but tricky to implement because it means knowing the combined national income and the combined national income tax. Fortunately, we can know previous national income and federal tax. All we need do is use those figures. To make it simple, I say divide the national income into percentiles. Those at the top will be few, so they will have to pay more per person. Those at the bottom will be many, so they will be less.
According to Prof. Wm. Domhoff (citing E.N. Wolff) the top 1% earned 21.3% of the national income in 2006. The next 19% earned 40.1% of the national income, the remaining 80%, earned 38.6% of the national income. No doubt if you broke those latter groups out by percentiles the amounts would be even more disparate.
Now, those at the bottom edge of the 1% are actually closer to the bottom 80% (in income) than they are to the top of the 1% That’s how steep the curve is. So we would have to subdivide the top 1% into tenths at least.
It all sounds very elaborate, but if you presume that there would be no ‘adjustments to income’ or ‘deductions’ because we are being asked to pay our share of taxes based on our share of the income, then all one would need would be W2s and 1099s and other records. Add them up, plug in the right number that is your position in the national income, and out comes your tax.
This obviously means we no longer use the tax code to accomplish political purposes, like charitable giving, home ownership, child rearing, and so on. As a clergyman, homeowner and parent I am a little nervous about this, but the end cost to me will likely be but a little higher than it is now, not vastly. And it would truly be my share of the common burden.
With so many feeling so little connection to community and country, one way to remedy that would be to make sure taxes truly exemplify the idea of universal, equitable, responsibility. If we knew our taxes expected equitable, not equal but equitable, shares from everyone it would be a step, a big one, in the right direction.
So it seems to me.