Until recently, our 15% federal capital gains tax rate was a piece of arcana discussed mainly when meeting with your financial planner. Alas, presidential campaign politics have turned the 15% federal capital gains tax rate into dinnertime conversation. People across the political spectrum agree that the tax code needs fixing if not outright reinvention, but there is little consensus about how to fix U.S. taxes. So this week's "Working it Out" question: What's the most important change you'd make in our taxation system?
Some ideas to kick things off :
- Should the income tax be replaced by a national sales tax that's progressive (i.e.: with basic items exempt to avoid penalizing the poor and luxury items heavily taxed to ensure the rich pay their fair share?)
- Should we replace the income tax with a carbon tax?
- Should the total amount of tax collected be significantly decreased?
- Or should the total amount of tax be significantly increased?
- To reduce the income gap, should all income over $1,000,000 be taxed at 80% federal and 10% state?
- Or, to reward achievement, should all income over $1,000,000 be taxed at zero?
You're invited to vote for and comment on the one of those six you think is wisest, and/or propose a better idea. Later in the week, my editor, Derek Thompson, will post your most trenchant and amusing contributions, and next Monday, I'll post a column in light of your comments and my musings.
"Working It Out"
4. What is our tax code's single biggest problem?