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Unfortunately, at this point, taxes are a necessary evil. With our national debt surpassing twenty-one trillion dollars and counting, it will never be paid back unless we cut down spending and tax citizens.

First of all, we must get Federal spending under control. The automatic indexing of Federal agencies and program budgeting need to be curtailed, revised, and in some case, eliminated. This will shrink Federal spending and lead to budget surpluses. Surpluses should be used to pay back the debt and not be used to create new, unnecessary programs.

Secondly, any single individual making less than $50,000 a year (which is roughly equivalent to the average income) and married couples collectively making less than $100,000 a year are not required to pay any Federal income taxes. Individuals above these thresholds are taxed based on a three-tiered 15-20-25% tax bracket on amounts above the thresholds. As average incomes rise, so should the threshold for taxation. As time progresses, the bracket levels will be studied and balanced. Low-to-middle income individuals will have more money to spend and greater freedoms concerning where to spend it. The increase in disposable income will create new businesses and grow existing ones within the United States. Revisions of deductions are also necessary. Deductions will be further reduced the higher a taxpayer’s income is. The main idea is to eliminate subsidized tax spending for individuals with higher incomes as they can afford it.

Flat taxes, consumption, or value taxes have been very popular ideas, but they have a few flaws. For starts, low and middle income individuals will pay more in taxes than they are currently paying. Most people making less than $30,000 a year pay little to no taxes at all now. With flat taxes on goods and services, these low-income individuals would pay more and have less money in the end.

The higher the value added tax, the more likely a creation of a large underground economy is as goods and services will be sold or bartered without taxation. Property theft will likely increase and the demand for “used” goods will go up to avoid taxation. Prices on higher value items such as cars will see an increase in used car prices with demand. Wealthy people buying high-priced items can have someone from a foreign country buy a desired item and resell it as used to avoid paying high taxes on expensive goods. These examples reveal how easy it would be to avoid taxes and cause more problems.

Corporate taxes, capital gains, and tariffs should all be part of the solution to fund our government and pay back our national debt. Although corporate taxes should be kept low to keep the economy growing and attracting foreign investments, a growing economy with a wealthier population means more jobs. Higher paying jobs will generate more tax revenues along with corporate taxes on rising profits. By exempting raw material from tariffs and charge a tariff on imported goods, a competitive environment will be created within the United States, attracting foreign capital investments and creating jobs within the country due to the fact that we are the largest economy in the world. The reason the Chinese stand on the world stage is partially because of their protectionism and limitations on foreign influence. Calling these practices bad for business is not completely true as long as it is done in a balanced manner.

The goal should be to encourage people to strive for higher incomes, and thus, help the economy grow and the base for taxation. Taxes can be lowered once the national debt and government spending decline. Through leading by example, we can help other countries achieve prosperity and freedoms like our own.

Paid for by Carl Persson for US Congress
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