I shared some tax-themed humor for tax day in 2021, so let’s do the same thing this year (other examples here, here, here, here, and here).
We’ll start with a satirical video from Reason.
For our next item, the pain that Chris Rock felt is probably trivial compared to the pain the rest of are feeling as we finalize our tax returns.
I don’t mind sharing clever left-wing humor, so our next item envisions a billionaire going up in space while his taxes go down to zero.
At the risk of injecting some serious analysis, here’s my analysis of how to reduce tax evasion/avoidance and here are some of my thoughts of so-called offshore tax havens.
Now let’s return to satire.
IRS bureaucrats have been breaking the law by leaking tax returns, so this is an example of humor that is painfully real.
Per tradition, I’ll close with my favorite.
There’s been a campaign to tear down certain statues and monuments. Some of that energy should be channeled in this direction.
If you want some serious analysis of taxes, here’s an explanation of the economics of taxation and here’s a tutorial on fundamental tax reform.
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I agree that there should be no tax on capital gains, dividends, or estates.
However, a drop from current taxes will create a huge jump in the stock market, since the value of stocks should jump to reflect increased after-tax returns.
In order to pass said legislation, I propose a one-time “painless” tax, just before the tax rate goes to zero. This would capture all previous gains plus all gains from the tax change.
While the tax would be collect ~$3Trillion, gains in the market would be ~$7T.
To make this more “painless”, we should allow owners to pay the tax with future Social Security payments, thereby reducing that liability problem.
A flat tax is definitely the way to go. Compliance with the tax code takes about 8 billion man-hours. A flat tax (25%?) could cut it to 2 billion, creating an extra 2% growth in the economy. (Extra 6 billion man-hours from our most productive.)
But what about tax deductions? ($1.8T) The rich should receive a UBI, set at the poverty level, which would effectively limit deductions for the rich, to a single per person amount.
What about the safety-net? ($0.8T of $2.0T) The poor and middle class should receive the same amount as now (for political reasons), minus the UBI cost, for a net zero change. The UBI would not be a disincentive against earning income. The flat tax should start at zero income.
What about businesses? The same flat tax applies, no deductions unless the tax has already been applied to expenses (like salaries or domestic supplies and services). Since foreign parts would not be deductible, the flat tax would be applicable, and bring manufacturing home.
Everybody treated the same way, but the effective tax % would be slightly more progressive than the current system. The amount could easily adjust for inflation. (UBI cost would go up, but revenues would go up by a larger amount.)
Special tax deals would be gone, buying votes with the safety-net would be gone. The poor and middle class would benefit from higher net income and no disincentives. Their employers would file taxes (on behalf of employees, establishing a basis for their salary deduction).
The wealthy would pay higher taxes but on HIGHER INCOMES, for a net income increase.
WIN-WIN-WIN