Currently I have withholding of about 23.5% of what my employer spends on me. With the tax refund check that I recently got which returns the income tax, my effective tax rate has dropped to 14.2%.

But what I would prefer to see an annual refund check that increases as I grow older. Say, when I am twice as old as I am now, I want my refund check to grow by, say, 4 times. But should the tax refund check be tied to income? The withholding I pay is already tied to income. Why should there be a positive and negative tax on income?

The rich people would also like to see their tax refund increase every year, especially at an accelerated rate. However, should they get a larger tax refund or should they pay lower taxes? I believe the latter is preferable. The tax refund, I believe, should not depend on one's income - it should depend on their physical aging in relation to the number people in their age group. Nor should the tax rate on income be different each year for farmers who earn a highly variable income; this turns out to be higher taxes for them and gives them a good reason to be subsized greatly.

So instead, I would prefer a 25% inclusive tax rate on income withholding. This amounts to around $2.75 trillion dollars. The tax refunds should amount to 15 out of 25 parts of the tax revenue ($1.65 trillion). The average benefit would be around $5,500. Each age group would have a common pool of rebates, which is proportional the square of the age of the age group. The share of total rebates is thus:

Age Group | Share of Rebates
Age 0 0.00%
Age 5 0.07%
Age 10 0.27%
Age 15 0.60%
Age 20 1.07%
Age 25 1.67%
Age 30 2.41%
Age 35 3.28%
Age 40 4.28%
Age 45 5.41%
Age 50 6.68%
Age 55 8.09%
Age 60 9.63%
Age 65 11.30%
Age 70 13.10%
Age 75 15.04%
Age 80+ 17.11%

Therefore, those over 65 (36 million) would recieve over half of the rebates ($825 billion). This is $23,000 a person. The age group from 20-24 (7.5% of America) would recieve 1.07% of the rebates ($780 a person). There is no point in having a Social Security Trust Fund which increases debt. The money should come back as soon as possible. It's only efficient.

As for me, my effective tax rate would drop from 14.2% to (25%-780/4800) or 8.75%. So it's good for young families, without having to give a huge tax credit for every dependent child (which some see as wasteful).

Why should rebates increase with age? And how is that more advantageous than just lowering taxes?

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"Man lives in the sunlit world of that which he believes to be reality. But unseen by most is an underworld, a place that is just as real... but not as brightly lit... A DARK SIDE!"
-opening from Tales From the Darkside

Those who are older recieve more money back from the government in anycase. It's what the current system does. My idea is to do it with fewer strings. No complicated rules are necessary. There should be no sudden increases in government benefits like those incurred when somebody suddenly has child or when one suddenly becomes a senior. I believe gradual changes in refunds would lead to lower deadweight costs. Also, just lowering taxes is good, but it does not tell you how the money should be distributed among the populations. My idea is to do with one curve what the goverment usually tries to do with several. Only one curve is necessary. It would be cheaper to administer as well as reminding people that their benefits are increasing over the course of their lifetime, not suddenly when they reach some arbitrary age.

Seems the entire taxcut will be over by 2016 when America goes bankrupt, or sooner if Hillary demands a fiscal budget. Read on...........

Look what happens when those trust funds go cash negative out in 2016. At that very time the cost of the President's tax cut proposals explode, driving us right over the cliff into deficits and debt never before seen in this country. Do not take my word for it. Here is the Congressional Budget Office report on the long-term budget outlook showing the President's tax cuts exploding the deficit at the very time the baby-boomers retire. This is not just reckless and irresponsible. It is wildly reckless and irresponsible.

This is what happens under the President's scenario. Where is the money coming from? Well, he is going to borrow $2.4 trillion from Social Security with no plan to pay it back, but that is not the only place he is borrowing. Now he is borrowing from countries all over the world. We are into Japan for over $500 billion and this is from 2003. We know this is a much higher number now because Japan is buying dollars at a furious pace. So is China. We are into them for over $140 billion, and that number would be much higher if we had a current number. We borrowed $62 billion from Caribbean banking centers. We are in hock to Hong Kong for $56 billion, to Taiwan for $46 billion, but we have even borrowed $43 billion from South Korea.

When I was growing up, if anybody had told me America would be having to borrow money from South Korea, that we would be having to be borrowing money from Japan and China, why nobody would have believed it. But that is what is happening.

Senate Floor Statement on President Bush’s FY 2005 Budget and Its Impact on Social Security (Kent Konrad ND 02/27/04)
http://conrad.senate.gov/~conrad/pre...004301B36.html

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One Tin Soldier Walked Away....................

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