Hi Guys! Today, I wanted to highlight another form of literature that can effect the lives of Americans greatly. Tax reform, like health care is a hot current topic in American from the floor of the Congress to the streaming radio/television aka media channels. It seems like every president is trying to come up with an equation or a number for a universal health plan or a magical tax number that will pay for the things the country needs and make everyone happy. However, that’s the mentality that is dangerous and downright unattainable.
Our forefathers aka American forefathers were smart. They knew that in a dynamic and ever-changing country like United States, consistency is not important, but constancy is. Who says a Democratic or a Republican party is better for the country? The party hopefuls and media only. However, it is the vibrant philosophy of each (major) party that brings in the richness and constancy the country needs AT THAT TIME. For example, after President Bush, America needed to rebuild its image in the world-that’s where a Democratic Obama was a perfect candidate. Then in the post-Obama era, we need to make our economy work harder (than us) for us. That’s where an experienced businessman such as President Trump comes in.
One of the biggest battle for these (major) parties is tax reform. Each president comes in with their own list of goals to accomplish. Here is how I think Trump should proceed with his tax reform:
Taxes are like required donations. In Islam, we don’t have a tax system, or a loan system for that matter, but we do have concepts like required charity known as sadqa and zakat. That’s how an Islamic society worked and payed for stuff in the past. Once we have this KIND view of the modern tax system we can be more generous and accepting of paying taxes as a fact.
One problem I see with all tax reforms is how universal they try to be. And to avoid total uniformity, the government creates tax income brackets. This is great, but this is where the uniformity needs to stop. First thing first, tax brackets and laws should be divided into TWO categories-Federal tax and State Tax. While federal tax rate can depend on factors such as GDP and how much debt we are in currently, state tax should be calculated in terms of cost of living in that particular state and income.
In other words:
Federal taxes- should be same across the country based on GDP; the better the economy does the previous year or the less spending we do the previous year, the less we pay taxes. The formula and algorithm, like Facebook and Instagram, needs to change EVERY year.
State taxes- should vary state from state based on individual or family income and cost of living in that state. Why should we Californian middle-class try to accomodate billionaires in Rhode Island because of high tax rates there or since there is a Republican president promising to cut taxes for rich people across the board? With my idea, if Rhode Island has a Republican governor, then consequently their tax rates will be lower than if a democrat is in the governor’s office. California should not be impacted by them.
Corporate tax- should get incentives instead of paying lower taxes. Corporations employee Americans, they produce technology and do much more, but they should NOT influence the tax code. Instead of decreasing their taxes down to 20% (like President Trump is proposing), which is lower than what an American middle-class family is going to pay, they need to get incentives rather than just decreasing taxes believing in the trickling down effect.
What are these incentives? When should taxes should be lower for companies? When they:
- Make investments in clean energy
- Hire American citizens
I think tax reform should be the most important task President Trump should focus on this year. Why? Just because I think other things will fall into place once we get the economy going.