Trump and Tax

If nothing else, the recent news about Donald Trump’s tax bills should clearly point out the biggest problem with the American Income Tax Laws.  That problem is the total failure that the tax obligations of those at the top of the economic ladder differ significantly from those at the bottom.  There is a very simple solution to this problem.  That solution first is to tax every dollar of earned income without any deductions.  In the event of a sole proprietorship, the entire income of the proprietorship should be taxed, again without any deductions except costs of goods sold, rent, and employee wages.  Second, an individual should not be permitted to create a corporation or other business organization to avoid having all; income taxed at the legislative rates for salary or wage income.  In the same manner, stock, stock options, or dividends from stock and options awarded to employees in lieu of cash should also be taxed as wage income.  An individual trading in stock or other equities should also have that income treated as wage income even if an asset was held for over one year.  All income that is an individual’s means of support should be considered wage income.  As for deductions, non-essential business deductions should be eliminated as should all “funny money” depreciation and the like.  The deduction for mortgage interest and property tax should also be eliminated so all taxpayers regardless of level of income are meeting their tax obligations on all income they may receive. After all, while renters my not directly pay mortgage interest or property tax you can be certain those payments are rolled into their rent. No longer should any form of income such as carried interest receive any special treatment.  If you think about it, right now over 46% of taxpayers who may rent rather than own their residential property cannot deduct SALT (state and local taxes) from gross income.  The cap on payroll taxes should also be eliminated and all individuals should have their payroll taxes based upon their gross income.  Retired individuals living on pensions or income from retirement accounts should be exempt from further paying payroll taxes.  Until such time when all taxpayers are treated the same the country will continue to experience growing inequity and kow-tow to people like Donald Trump.