The Jeffress Federal Tax Reformation Proposal / 171031, Revised 171202
Please Read All: My explanation & reasoning for this proposal is at the end. Do you agree?
Cat. – Taxable Income Tax Rate
1. Corporate & Small Business
.1 Corporate TaxRate . . . . . .. 20%
.2 Repatriated Business
1st 3 yrs back in USA . . . . .. 15%
2. Individual / Personal
.1 Less than $25,000 . . . . . . 1%
.2 $25,000 to $50,000 . . . . . 5%
.3 $50,000 to $100,000 . . . . 10%
.4 $100,000 to 200,000 . . . . 15%
.5 $200,000 to 500,000 . . . . 20%
.6 $500,000 to 1 Million . . . . 30%
.7 $1 Million to 5 Million . . . . 40%
.8 $5 Million & Greater . . . . . 50%
3. Small Business Pass-Through
.1 Same as Individual / Personal
up to a maximum rate of . . . 20%
4. Corporate Deductions
.1 Normal-Legal Business Expenses
.2 Depreciation of Production
& Service Equip: After 1st year 20%
and each year thereafter . . . . 10%
Deductions Allowable: Either “Standard” #5 or “Itemized” #6. Not both.
5. Standard Deductions, either on of the 3 categories:
.1 Individual; single, divorced or widowed. . . . $10,000.
.2 Married filing jointly & living together . . . . . $20,000.
.3 Single Parent / Head of Household with
children under 24 or disabled adult(s) . . . . . . $15,000.
6. Itemized Deduction / Individual & Personal
.1 Actual, out-of-pocket Medical Expenses; Greater than 10% of total income, but not to exceed $25,000. Must be supported by receipts.
.2 Educational tuition, books & supplies and room & board actual, documented expenses: Greater than than 10% of total income, but not to exceed $25,000.
.3 Mortgage Interest & Student Loan Interest: Documented by Form 1098.
.4 Charitable Gifts to Registered Charities, Churches, etc.: Documented Record.
.5 Unreimbursed Job Related & Misc. Verifiable Expenses, Fees, Seminars, etc;
Not to exceed 10% of total income, or $25,000, which ever is lesser.
.6 Social Security income will only be calculated at 50% of the amount received unless “other” income exceeds $40,000.
Examples of Tax Calculations
7. Single tax payer or married filing separately (3 examples):
.1 Works half-time at minimum wage: Income $7,540.
Takes standard deduction… owes nothing. Tax= $0
.2 Works 40 hrs/wk for 50 wks at $15.00/hr=$30,000;
Std Ded $10,000, Tax Inc=$20,000 x 1%=200 Tax= $200
.3 Professional athlete, Income $6,400,000/year:
Itemized deductions, $200,000. Tax Inc= $6.38 Million:
8 step calculation at rates shown above gives: Tax= $2,521,500
8. Married Couple, living together filing Jointly (5 examples):
.1 Tot. Income, $27,000 – Std Ded of $20,0000= $7,000 Tax= $ 70
.2 Tot. income, $42,000 – Std Ded of $20,000= $22,000: Tax= $220
.3 Tot. Income, $160,000 – Std Ded= $140,000, so the: Tax= $12,500
.4 Tot. Income, $256,000- Itmz’d Ded of $86,000, then Tax= $17,000
.5 Tot. Income, 17,360,000- Itmz’d Ded of $2,320,000: Tax= $9,361,500
Note: Pro Athletes, Movie stars & TV Personalities would finally pay their way.
9. Single Parent Head of Household
.1 Mother, Her disabled mother and 3 children, 2 in College:
income of $42,000; Med & Edu Deds of $37,000, then Tax= $ 50
.2 Widowed Dad, Pension+SS= $84,000- Med, Edu &
Mortgage Int totaling $56,500, Tax Inc= $27,500, so Tax= $425
Common Sense Explanation of this Proposal
10. This is my “common sense explanation” (common sense being the key words) for why I think this tax reform proposal is Fair, is Sensible and is Workable. It simplifies the massive tax code that we now have, that only tax experts and some lawyers understand, and doesn’t require paying your tax expert for preparing your taxes.
.1 I realize it costs more for the IRS to collect taxes on low income than they collect, so maybe it would make sense to not require anyone who makes less than $50,000 to file nor pay tax. (See note at end) **
.2 Our current Immigration Laws & Policies are so conflicting and convoluted that it seems almost impossible to control, limit or find those who cross our borders. Our culture, our civilization, isn’t so civilized anymore and seems more divided now than ever before… some say more than during the Civil War.
.3 I also know that the government tries to track “everyone” and I can’t think of a more determined group than the IRS to do this job. So, I think and propose that “everyone” should take some responsibility for supporting our country peril and should pay “their fair share” to support it. This will also give the Internal Revenue Service the perfectly legal way of keeping track of and going after tax evaders.
.4 For those who make nothing or very little, they will pay nothing or very little, but it will be fair. Those who make a lot will pay a lot. They already do. The top 10% pays more that all the rest combined. If you only make $20,000, you spend it all, but if you make $20 million, you can probably scrape by with spending a few hundred thousand and can afford to pay more taxes. Bill & Melinda Gates, Warren Buffett and several other billionaires have publicly stated that they pay what is required by law, but agree that they should be paying more. Look at my proposed rates above. The poor pay little or no more than they currently do.
.5 The Standard Deduction and the Itemized Deductions (# 5 & # 6 above) seem fair, cover all I believe is necessary, protects the poor, the elderly and disabled and should certainly simplify the tax code and preparation. The poor and the really rich will complain and I’m sure the NFL, NBA, movie stars and TV celebrities will hate this idea, but I’m more concerned with the peril of the “Lower, Middle and Middle-Upper Class” than I am the “do nothing sloughs” at the bottom or the “billionaire oligarchs” at the top.
.6 Our ill-conceived “Affordable Health Care Act” needs to be majorly revised or replaced and Immigration needs serious attention, but that is a separate issue.
.7 The Urban Institute-Brookings Tax Policy Center estimates that 47 percent of households pay no federal income tax, whereas the Joint Committee on Taxation estimate that 53 percent of households paid no federal income tax during the past few years. If you split the difference then 50% pay no “federal Income Tax.? Other taxes, e.g., state, property, gasoline and sales taxes are paid, but this proposal is dealing only with “ Federal Income Tax.” I think it is time we all support our country. IF we demand more than we can afford, our national debt, now approaching $20.6 Billion (http://www.usdebtclock.org/) will continue to grow and when faith is lost in the almighty dollar and it falls, so will our economy and it will take your entire pay check or social security payment to take your “SO” (significant other) out for dinner at McDonalds.
.8 ** Now, referring back to my Item 10.1, if this tax proposal is still too long and complicated, then maybe we should just go to a very simple Tax Rate as follows: Income: $0 – $50 K, tax $0; $50 – $250 K, tax 10% of total; $250 – 500 K, tax 20%; $500 – 1 million, tax 30%; $1 – 5 million, tax 40%; and Greater than $5 million, tax 50%. So, what do you think? Will you reply with comments (constructive I hope); Send it to your Congressmen and help it go viral; Send death threats again; Or maybe just support “Draining the swamp,” demanding that our wasteful government find ways to be more efficient, effective and serve the will of “We the People,” instead of just their own selfish interests and preserving their jobs. Remember: “Bad things happen when good people do nothing.” Thanks for reading and following Jeffress.Com,
Sorry about the format changed from what I submitted.