Tax Reform Proposal By Lee And Rubio Is So 20th Century

Posted: 9/24/2014

Trigger

Just read “A Pro-Family, Pro-Growth Tax Reform Two simple income-tax brackets: 15% and 35%. End the marriage penalty and increase the child tax credit.” written by U.S. Senators Mike Lee and Marco Rubio.

I usually add emphasis when I quote from sources unless otherwise noted.

Remarks

Both U.S. Senators claim that “the policies and practices of Washington remain stuck in the 20th century, leaving too many Americans unable to access the enormous potential of this new era.”. Big words by two men, but their proposal is extremely stuck in the past century. It is about retooling the personal income tax. This is not good enough!

Their proposal in bullet points:

1. The reform proposal for corporate income tax is run of the mill, nothing exciting. It is the only tax reform proposal that is acceptable. Highlights:
   a) Cut the current 35%, but they do not say by how much (What do you expect from politicians?)
   b) Eliminate “cronyist giveaways”. Whatever this means?
   c) Tax only domestic business earnings. Well, this is overdue anyway. Nothing new!
2. Consolidate the existing income tax brackets into two, i.e. 15% and 35% This stinks! Why not a flat rate! The latter rate, i.e. 35% is way too high! Who is going to pay the higher rate the two politicians do not say as is typical.
3. The two U.S. Senators discovered a new penalty, which they call the “parent tax penalty”. Parents should get higher child tax credits because they raise “raising the next generation of taxpayers, who will grow up to fund the Social Security and Medicare benefits of all future seniors”. Absurd!
4. They want to retool the Earned Income Tax Credit.  These and similar provisions only unnecessarily complicate the personal income tax code and should be eliminated ASAP!

Necessary Reforms

What these two gentlemen are missing is:

1. The corporate income tax should be phased out ASAP. I blogged about this here
2. Social Security should be privatized and phased out ASAP
3. Medicare should be privatized and phased out ASAP