The taxpayers.

I’ve been arguing with my rightie pals about this for a few weeks–they’re no fan of these bailouts by ideological bent–and every time I say, why not just write the taxpayers a check, they all agree in principle. Which I find kind of remarkable.

Now, maybe this makes me some sort of Republican, or my Republican friends weirdly progressive, but the consensus is something worth pondering, if you ask me.

Please allow Heywood J to expand on the idea.

Also, I continue to press the point that until the tax code and accounting rules are simplified in a manner that Joe T. Plumber can understand Bill Gates’, or Citigroup’s tax nut, this cycle will never end. We’re collecting money here, not solving the mysteries of the universe, and the goddamn money collection system need not be a Bible-length-or-longer, but more boring and indecipherable compendium of the arcane.

To wit, my modest tax proposal, which I like to call a progressive flat tax:

0% tax rate on everyone, yours, mine, Bill Gates, and Joe Plumber’s income up to a livable wage, say, $36,000. Second tier starts at $36,001, and let’s just say we tax that at 20%. The numbers here are completely debatable and flexible, it is the concept that I’m trying to propose. So a person earning $100K would pay 20% on $64K, or $12,800, an effective 12.8% tax rate. Not bad.

And here’s the great part. Above that second tier, the top tax rate is established ($300,000? Top 1%?), when enacted, at our best guess of “revenue neutral” to the prior year (as best I can tell right now about 35-40%). Which dovetails nicely with one more proposal: Any alterations of the chosen rates go to the top tax bracket first. Why? Because it is the people in that tax rate who establish policy. Therefore they are rewarded for finding popular, electorally significant ways to figure out how to cut the government budget. Additional bonus for 0% rate: “We,” the people, can, in the context of many government programs, effectively say, “Get a job. It’s on us.”

No deductions. Your first $36K (or whichever number we determine a decent place to feed, clothe, and house your family) is free, income tax wise.

Same principle for capital gains and corporate tax rates. For capital gains, let’s offer a 0% rate to, say, the first $12,000 of capital gains per year. Peanuts. This encourages even folks with little disposable income to save/invest, which is good for all of us.

Bottom line is to keep it simple and understandable, for anyone with basic math and reading skills.

(Ed: If anyone with a high school education could calculate Bill Gates’ and GM’s tax nut, we could argue the rates on the merits, honestly and intelligently. Until then, the problems we face now remain.)

Update: Almost forgot the post that got me to put this up.

Update 2: This is obviously an oversimplification, and assumes a health care overhaul, unless we want to increase the income on which the 0% tax rate is applied, among many other macroeconomic considerations.

But the concept stands for debate.”

I think it would piss everyone “in power” off, The Man, about equally, and it would be wildly popular amongst us average Joe’s.

A good compromise pisses everyone off relatively equally. Just sayin’.

Update: And let me just suggest that a simplified tax code and subsequently simplified set of accounting rules makes your Enron’s and Citigroup’s problems, which we’re paying tax dollars for, a lot less likely to occur.