I blogged yesterday about Mr. Obama's proposal to raise the funds necessary to increase spending on bridges and other government projects. Perhaps Mr. Obama should consider some of these ideas to increase spending while promoting jobs.
1.) Kill the AMT (alternative minimum tax). The AMT was orginally designed to only hit the richest people in society. It limits the amount of deductions they can take thereby forcing them to pay a portion of tax liability. However, the AMT has never been adjusted for inflation. It now hit middle class earners, forcing many people to go through the hassle of filing an extra return to see if they qualify. I am completely against the AMT. If people want to contribute massive funds to charity in order to avoid tax liability, I'm not sure that is a bad thing. Additionally, we could abolish the AMT and raise taxes by an additional 2%. I'm sure the middle class would not complain becuase now they only have to file one return.
2.) Tax C corporations like a partnership and kill the tax on qualified dividends. I mentioned this in a previous blog and discussed the potential economics from the corporate side. However, now I'm going to discuss it from the taxpayer's side. The current tax on qualified dividends makes little sense. Imagine TP (taxpayer) X earnes 150K per year. This places him in the 35% bracket. However, imagine TP Y, a wealthy tycoon, is unemployed and reinvested all his money in stocks. He would be taxed at the 15% rate on his vast fortune. Yes, many middle class people probably pay more taxes than Bill Gates. By abolishing the C level tax, we could encourage more corporations to come here, and force the people with money invested in the corp. to pay tax at their income level. This is the most fair way and everyone would be paying their share of the tax.
Those are my two ideas. Feel free to comment.
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