Net Zero Tax... The Concept

Now that I am retired, I have lots of time to sit around and think of things.

I like to think about recent goings on in the country, and particularly in the Government.

One of my more interesting subjects is our Income Tax system.

The current Income tax situation has gotten so complicated it takes a computer and an accountant (maybe two) to figure it all out. I propose a much simpler scheme.

For lack of a better term I will call it "Net Zero". Here is how it works.




First a "Net Zero" baseline is established. Exactly how this will be done I am not sure, but I am sure that after 2 years coming to an agreement Congress will be able to figure it all out. So for now, let's just "fast forward" to 2 years from now and work from there. (It would be nice if this concept could start right away, but we all know that Congress must take its time just to make sure it "gets it right" - just like they did with "Healthcare").

Now exactly what is the "Net Zero" baseline? This is an amount, that is inflation adjusted, that in effect becomes the "Net" income", after Tax, for all citizens (at least the ones who are legal and are employed).

Let's just pick an estimated "Net Zero" and go from there, then I think you will see how it works.

Hypothetical... Tax year "2012".

 As a bit of digression... why I picked 2012. You may not know this, but according to Mayan Prophecy, on December 21, 2012, "the world as we know it is in for some dramatic and devastating changes". It may be that these "Changes" are the TAX code changes I am proposing. If you want to learn more about the Dec 21 2012 "Changes" just do a Google search. There is tons of info out there.

Anyway... back to "Net Zero".

 "Net Zero" Baseline is established at $100,000.00.

 That's it, that's all there is to it, every taxpayer (the legal ones that are employed) in the country ends up with a "Net" income of $100.000.00. How simple is that?

Now, you might ask... "How does one calculate the TAX in order to arrive at the "Net Zero" baseline, since Gross incomes vary considerable"? "

As an example... It might be that taxpayer "A" makes a gross income of $20,000.00 per year whereas taxpayer "B" makes a gross income of $2,000,000.00 and taxpayer "C" makes a gross income of $2,000,000,000.00 per year.

Let's take a look at each scenario.

 For the calculation, we will use IRS form 788743 (for those of you out there who are into the "word games", see if you can figure out how I came up with the form number. I will give you a clue... look at your cell phone key pad... the old-fashioned ones where numbers and letters are on the same keys).

Anyway here is how IRS form 788743 looks.

Now, Lets take a look at how it works for all three of our examples...

Taxpayer "A"

Taxpayer "A" gets a REFUND of $80,000.

Taxpayer "B"

Taxpayer "B" OWES tax of $1,900,000.

Taxpayer "C"

Taxpayer "C" OWES TAX of $1,999,900,000

Summing it up... taxpayer "A", gets a REFUND whereas taxpayer "B" & "C" OWE tax.

Now, all of this is a onetime thing, done at the end of the year. There are no "payroll deductions" as this further simplifies the process.

So, at the end of the year, if you owe tax, you simply send off a check to the IRS, and if you are due a refund, the IRS will send you a check.

How simple is that?

That's it, that's all there is to it. I think it would be hard to argue the simplicity of this system don't you?

Seriously... This concept probably sounds pretty ridiculous, but... is it any more ridiculous than the current system?

Just Say'n