I want to thank all the people nationwide who have commented on my adjusted “9-9-3” plan.
It is impossible for me to address every email I got so I will attempt the ones that were the "most popular."
Many asked if Social Security was taxed at all under my plan. It isn’t taxed, however your investment income (dividends, interest income and capital gains) are taxed, unlike Republican presidential candidate Herman Cain's 9-9-9 plan.
Inside the World’s Greatest Retirement Lie
Study reveals disturbing truth: Millions have been victimized by the very people they elected. Learn the Truth, See the Details.
I have eliminated all personal exemptions to widen the tax base.
However, your rate is 3 percent on your first $40,000 and 15 percent on every dollar above that with no limit.
So a senior citizen with $15,000 of investment income will pay $450 per year in federal taxes, and one who earns $50,000 will pay $2,700 or an effective rate of 5.4 percent.
However, under my plan this is very simple and not some complicated worksheet like it is now.
I just don’t feel Social Security benefits should ever be taxed — and by judging my emails neither do most of my readers.
Some readers wanted senior citizens to be exempt from paying tax on their investment income and I can understand that.
But given our debt and deficit, taxing your investment income — and not your Social Security benefits — makes the system much fairer.
The biggest complaint under my plan by far was the national sales tax.
Again I understand many of you are concerned.
Congress can jack the rates up whenever they want and that they don't need another stream of income.
That is just pure canard.
First of all, as explained last week, lowering corporate and personal income taxes will give everyone more money to offset the 3 percent national sales tax.
Also since the overall tax rates will drop, the prices of everything you buy will also drop, although many pundits and politicians don't believe merchants will pass the lower tax costs down to the consumer.
The laws of lower prices, influencing supply and demand, are best illustrated by McDonald's and Wal-Mart.
Consumers will flock to the company with the lowest prices and best quality.
Wal-Mart has knocked many retailers out of business because those merchants "refused" to lower their prices and the consumers decided to "vote with their wallets" and decided who stays in business and who goes bankrupt.
To me, it is very simple.
Under my tax plan, visitors from another country, criminals, tax cheats and those receiving tax credits will all pay more under my plan.
Almost every working person who makes more than $9,000 and doesn't get any tax credits will pay less in taxes under my system.
And if the United States is going to prosper in the future, we need to give more incentives for those people who work for a living.
I appreciate all your emails. My tax plan was a combination of my plans and the many suggestions that were emailed to me.
About the Author: Bill Spetrino
Bill Spetrino is a member of the Moneynews Financial Brain Trust. Click Here
to read more of his articles. He is also the editor of the Dividend Machine. Discover more by Clicking Here Now
© 2021 Newsmax Finance. All rights reserved.