Create a simple, flat, fair, and PROGRESSIVE tax system for income tax.
1. Establish a single tax rate (10-30%).
2. Establish personal exemption at 3 times the individual poverty level for a given year. Household would be half again as much.
3. NO other deductions.
4. Federal Income is any realized income paid (wages, salary, interest, investments paid, annuities, awards, winnings, etc.) minus State and local taxes paid.
5. Foreign income would be defined based upon residency, citizenship, treaties, and foreign taxes.
Formula:
((Income - State Tax) - Exemption) X Tax%= Tax Owed
Example, assume 15% rate and 30k individual exemption:
Income: 35k, Taxable 5k, Taxes 750, (2.1%)
Income: 50k, Taxable 20k, Taxes 3k (6%)
Income: 1M, Taxable 970k, Taxes 145.5k (14.6%)