General Discussion
In reply to the discussion: How would YOU restructure the federal tax code, if you could? [View all]Recursion
(56,582 posts)Income is income, period.
A personal exemption up to the national median income (calculated yearly).
A flat tax above that at whatever rate roughly pays for government minus whatever we feel is an acceptable annual deficit.
A surtax on all income above twice the national median income at a rate indexed to the poverty rate; if we get to a point where nobody in the US is in poverty, the rich can have their flat tax. Alternately, index it to the Gini coefficient or perhaps the entropy of income distribution (these are less concrete than the poverty rate, but also can't be meddled with by politicians like the poverty line can).
End all payroll levies: pay for SS and Medicare out of the general fund (separate accounting isn't keeping them safe so I see no need to continue a regressive system that funds it).
This gives people an incentive to raise the national median income (to shield more money from taxes) and to distribute wealth more equally in general (to decrease the surtax).