The goal of every singe for-profit business in the world is to generate more income than it has expenses. This is true for all business structures, be it a sole-proprietor who generates $20,000 or less in gross revenue, a multi-billion dollar corporation with locations all other the world, or anything in between. The simple rule of business is to make more than you spend. Period.
The United States Government is an extremely large business with a budget that is incomprehensible to many of us. And yet, given all the revenue sources, power, and influence that it has, it still is not operating profitably. Why?
One reason is income taxes. In my opinion, the federal income tax system is greatly flawed. My understanding of the original intent of an income tax refund is basically that you get your "change" from paying in more than you owed at year end. It should work just like going to the grocery store, spending $30, handing the cashier $40 and getting your $10 back. However, there have so many regulations passed over the years that is now essentially possible to get MORE money back than you paid in. It would be like me going to the grocery store, spending $30, handing the cashier $40, and getting another $20 back. Does that happen to anybody? Didn't think so.
I understand and appreciate a lot of the tax deductions, benefits, breaks, etc. that are out there. Our family has benefited from many of them like mortgage interest, medical expenses, child tax credits, and charitable donations. But there is no logical math (other than the IRS) that can calculate if I owe $3,000 in taxes, pay $4,000 in taxes, that I can somehow get back $2,000. It just doesn't work. It's bad business and one major reason the government cannot sustain itself without borrowing at this time.
Business tax credits and deductions are a more difficult animal to tackle due to the fact that the theory of keeping money in businesses' pockets is that they will expand, hire more, and pay more people to grow the economy that way. It's a more complex system of dangling a carrot out there for them to invest and jump through certain hoops in hopes that they will offset the tax deductions and benefits through economic growth. That doesn't always happen, but you've got to have a game plan.
And there's one theory that may just be crazy enough to make all of this a moot point. What if...just what if we did away with income taxes altogether? How in the world do you do that? Let's give it a shot...
- The US could calculate the total amount of federal and state income taxes paid.
- Increase the sales tax based on gross sales state and nationwide (a number the government should also be privy to).
- Income taxes can now be eliminated. (Not to mention the savings of being able to potentially phase out the IRS)
- Everyone then pays the taxes as they spend money in their home state, where they travel, where they work, or wherever. And everyone pays based on their spending level which is much more of a choice than feeling like you are penalized for working harder and earning more money and a higher paycheck.
The United States Government is an extremely large business with a budget that is incomprehensible to many of us. And yet, given all the revenue sources, power, and influence that it has, it still is not operating profitably. Why?
One reason is income taxes. In my opinion, the federal income tax system is greatly flawed. My understanding of the original intent of an income tax refund is basically that you get your "change" from paying in more than you owed at year end. It should work just like going to the grocery store, spending $30, handing the cashier $40 and getting your $10 back. However, there have so many regulations passed over the years that is now essentially possible to get MORE money back than you paid in. It would be like me going to the grocery store, spending $30, handing the cashier $40, and getting another $20 back. Does that happen to anybody? Didn't think so.
I understand and appreciate a lot of the tax deductions, benefits, breaks, etc. that are out there. Our family has benefited from many of them like mortgage interest, medical expenses, child tax credits, and charitable donations. But there is no logical math (other than the IRS) that can calculate if I owe $3,000 in taxes, pay $4,000 in taxes, that I can somehow get back $2,000. It just doesn't work. It's bad business and one major reason the government cannot sustain itself without borrowing at this time.
Business tax credits and deductions are a more difficult animal to tackle due to the fact that the theory of keeping money in businesses' pockets is that they will expand, hire more, and pay more people to grow the economy that way. It's a more complex system of dangling a carrot out there for them to invest and jump through certain hoops in hopes that they will offset the tax deductions and benefits through economic growth. That doesn't always happen, but you've got to have a game plan.
And there's one theory that may just be crazy enough to make all of this a moot point. What if...just what if we did away with income taxes altogether? How in the world do you do that? Let's give it a shot...
- The US could calculate the total amount of federal and state income taxes paid.
- Increase the sales tax based on gross sales state and nationwide (a number the government should also be privy to).
- Income taxes can now be eliminated. (Not to mention the savings of being able to potentially phase out the IRS)
- Everyone then pays the taxes as they spend money in their home state, where they travel, where they work, or wherever. And everyone pays based on their spending level which is much more of a choice than feeling like you are penalized for working harder and earning more money and a higher paycheck.
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