A non-IRS would be a dream come true for tens of millions of Americans who would have much better lives if the IRS didn’t exist. Most of these people are, of course, willing to pay taxes for national security, law enforcement, and the other legitimate needs of a society that works.
They are also, however, justifiably upset with a federal government that spends too much money because it sticks its nose into people’s lives when it shouldn’t and imposes a tax system whose complexity benefits government officials far more than ordinary people.
During the 2016 presidential campaign, four of the Republican candidates — Ben Carson, Ted Cruz, Mike Huckabee, and Rand Paul — proposed abolishing the IRS.
But abolishing the IRS or a government agency with similar responsibilities will not work, according to Stephen Moore, the founder of the conservative Club for Growth. Moore, who has advised Donald Trump, said a revenue agency is needed, but the IRS is not an effective revenue agency.
”You can change the way we collect taxes or dramatically simplify the system,” Moore told CNNMoney in an article entitled “A world with no IRS? Really?” “And [that] would substantially reduce the IRS’ presence in our lives.”
An article in The American Spectator compared the plans of all the former GOP candidates as well as Democratic candidates Hillary Clinton and Bernie Sanders.
The most interesting part of the article was a chart that shows the highest income tax rate proposed by the eight presidential candidates whose plans were analyzed.
Do you want to guess whose plan called for the highest rates? I know you know the answer. Sanders’ plan called for a rate of “at least 50 percent” while the Clinton plan called for a 46 percent rate.
The highest tax rate in the current tax code is 40 percent. Both Democratic candidates want to raise that rate, while the last six GOP candidates wanted to lower it. Carson’s plan had the lowest rate — 14.9 percent. Cruz was second at 16 percent and Trump was third at 25 percent.
“One common goal of nearly all these plans is to turbo-charge growth by dramatically lowering the business tax rate (now the highest in the world) and reducing the punitive double taxation of investment income,” the article reports.
Given that Trump has clinched the GOP presidential nomination, his plan deserves more scrutiny than the others. His plan reduces taxes by approximately $5,400 per taxpayer, according to the Forbes article.
Trump’s plan would cut the tax bill of middle-class taxpayers by an average of about $2,700. Altogether, his plan has the most tax cuts — $9.5 trillion in the next 10 years.
Trump’s Plan Superior To Clinton’s
An analysis by the Tax Foundation, a nonpartisan tax research group, shows that Trump’s tax reform plan is vastly superior to the plans of Clinton and Sanders.
A chart on the foundation’s web site titled “How do the 2016 Presidential Tax Plans Compare So Far?” reports that Trump’s plan will add 5.3 million jobs and boost GDP by 11.5 percent in 10 years.
Clinton’s plan will cost the American economy about 300,000 jobs and cut GDP by 1 percent by 2026. Sanders’ plan will result in a loss of 5.9 million jobs and cut GDP by 9.5 percent.
Trump’s plan has many appealing features. Perhaps, the most appealing is the fact that it would ELIMINATE three taxes — the estate tax, the net investment income tax, and the alternative minimum tax.
His plan would also reduce the corporate income tax rate to 15 percent and reduce the maximum tax rate on “pass-through business income” on LLCs, partnerships, S corporations, and sole proprietorships to 15 percent. These changes will give people far more money to invest in their businesses.
“On nearly every single indicator, Mr. Trump’s tax plan will have a more beneficial impact on the economy than Mrs. Clinton’s, which actually does damage to the U.S. economy over 10 years,” reports an article in People’s Pundit Daily entitled “Comparing Trump, Clinton Tax Plans: Facts and Impacts.”
“The U.S. has the highest corporate tax rate in the developed world and the Trump plan responds by reducing the corporate income tax rate to 15%, which would make the country more competitive.”
Trump’s plan would also:
* Cut the amount of tax rate brackets from seven to three. The lowest-income taxpayers would have a rate of 10 percent while higher-earners would pay 20 or 25 percent.
* Increase the standard deduction to $25,000 for single people and $50,000 for a married couple.
* Tax carried interest as ordinary income.
* End tax deferral on overseas corporate income.
* Cap the deductibility of interest expenses.
Clinton’s tax plan, on the other hand, is less concerned about helping businesses, job creators, and the economy and more concerned about what she, Sanders, and other Democrats call “fairness.”
The Tax Foundation’s projections on the Clinton tax plan’s impact on GDP growth, jobs growth, and jobs demonstrate conclusively that “tax fairness” plans are NOT fair to low-income people who need jobs that pay a decent amount of money.
Basically, her plans are a short-term political fix. She is looking for votes, not help for ordinary, hard-working Americans.
Clinton’s plan includes:
* Increasing the tax rate on income earned after the first $5 million in income from 39.6 to 43.6 percent.
* Increasing the tax rate on medium-term capital gains to between 27.8 and 47.4 percent.
* Imposing a 30 percent minimum tax rate on everyone who earns more than $1 million. This was a proposal by billionaire Warren Buffett. He can afford this tax. Many ordinary Americans need the money to increase the amount of money they can invest in their businesses and pay employees.
* Proposes a new tax, yes a new tax, on high-frequency trading.
Sanders’ plan ALSO includes a new tax — a financial transactions tax that affects financial assets traded by Americans, including stocks and bonds.
He also ADDS four new income tax brackets for high-income people. A Sanders’ presidency — and a pro-Sanders Congress — could mean income tax rates as high as 52 percent.
Trump’s tax reform plan makes paying taxes simpler, while his Democratic opponents’ plans make paying taxes more complicated. Trump’s tax reform plan gives people more incentive (and money) to become entrepreneurs and/or expand their businesses.
While his Democratic opponents’ plan stifles business growth in an effort to redistribute income to people who should be encouraged to earn more money via hard work and/or starting their own business.
Donald Trump’s tax reform plan will be far more beneficial to the American economy in general and to tens of millions of Americans in particular than the pro-government, anti-ordinary people, pro-distributionist, quasi-Socialist plan advocated by Democratic Party presidential nominee Hillary Clinton.