What is Right About the Income Tax

There is one really good thing about the income tax:

The income tax is a personal tax. The tax confronts taxpayers directly with a portion of the money the government takes away from them each year.

The Fair Tax is a big tax placed against merchants. The FAIR tax will make consumers despise the small businesses saddled with collecting the tax. They won't associate the tax with excessive government.

A personal tax allows the government to set a personal progressive tax rate.

The ideal tax structure would be a personal tax that taxes consumption.

I developed a program called the "Object Tax." (The tax uses ideas from Object Oriented Design).

This design taxes an abstract object between income and consumption. Using advance design techniques allows us to combine the best part of the income tax with a consumption tax.

The tax structure is easy. All financial object have a tax attribute of "Pre-Taxed" or "Taxed." The tax is easy to implement.

Your paycheck will go into a pre-tax bank account. You will pay a tax at your personalized tax rate when you go to spend the money. The personal tax rate would be based on a combination of your estimated net worth and yearly income.

So, if I get paid $1,000 and my tax rate is 10%, then I would get only $900 when I withdrew the funds.

In other words, one pays the tax when transferring money from a pre-taxed account to a taxed-account for spending. People will pay taxes when they do their budgetting. This program does a great job raising awareness about the amount of money government takes.

The object tax eliminates capital gains tax. Investments will exist in a pre-tax account. Investors would pay a tax when they transfer money from their investment account to their spending account. This allows us to sock rich investors will a high progressive tax without adversely affecting investment decisions.

Inheritance tax would be as follows: Pre-taxed items would be inherited into pre-taxed accounts. Taxed items would be inherited as taxed items.

This way one can inherit the farm without breaking it up. It also allows people to inherit all the heirlooms without a lot of tax complications. The government will collect money if the heirs sell the family farm.

The Object Tax assures that all items will be taxed once at a personalized rate. The program also avoids double taxation which happens with Herman Cain's 999 tax.