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|Subject: Re: Is your 401(k) Inadequate For Retirement||Date: 8/3/2008 11:32 AM|
|Author: CycleGirl||Number: 13781 of 19257|
Don't forget that about 90% of the tax code is devoted to defining exactly what is, and is not, taxable income. Only about 10% of the code is devoted to actually calculating your taxes. "One low tax rate" isn't going to simplify things very much.
I agree that flattening the rates is a relatively minor simplification compared with other complexities in the tax code.
Unfortunately, every time the tax code has changed, it has been to give a break to some group that had political power at the time. I mean, I love the low capital gains and dividend tax, but Warren Buffet has a point. If Joe Investor makes $200k this year in the market and Patricia Lawyer earns $200k in wages this year lets have them pay the same amount in tax.
Furthermore, if I collect $1000 in dividends and $1000 in interest why shouldn't I pay the same rate of tax on both kinds of income? I realize that there is a double-taxation problem on dividends, but that should be fixed in the corporate tax code. For an individual, the income looks the same.
We have a constant debate between demand-side and supply-side. If we all paid the same rate it might seem a little more fair.
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