Tuesday, May 19, 2009

Flat tax

Hi
In my last blog I went into the concept of a flat tax and now I would like to expand that concept. There was no big explanation of how the tax works so this an attempt to clarify the situation.
When you work for wages you get a paycheck. This paycheck is computed by multiplying your rate of pay times the number of hours worked. If you are salaried you get a fixed salary for each pay period. That is the easy part, now comes the kicker. The politicians in Washington come with their collective hands open, "Where is my share?" So your employer must by law deduct your share of income taxes from your check. If not he may be liable for that amount which should have been deducted. Before your employer sends in your taxes he must make some computations, how much do you owe for income tax, social security and medicare payments. After this computation your employer must then match your deduction for social security and medicare and together with your withholding on income taxes he remits that amount to the government. The employer is mandated to do this but there is no reimbursement for this service so in many cases the employer must hire a professional to do the paperwork or he must purchase a software package which does these computations. I repeat, no federal reimbursement for this. In many cases the state gets into the act and in even some places the local or city government deals themselves in. I quote Jimmy Durante."Every body wants to get into the act." I wish I could poll congress and the bureaucrats in DC and find out how many of them know what is involved, or better yet, if any of them have ever had to meet a payroll. My educated guess is that the answer is close to nil. These are the people who think they can run General Motors and I bet they cannot run a mom and pop candy store. I know they cannot run their own cafeterias.
I add at this time some other tidbits, when your employer remits the tax as computed above, it is not over. He must compute unemployment, both state and federal, workers compensation insurance and in many cases disability insurance. Most of these costs come out of his pocket. The employer however knowing how costly this is generally offers lower wages to compensate for the deductions. In a flat tax there is no need for the employer to figure any "perks" so he can actually raise the workers wages by the amount he would have had to pay the government. Translation, more money for the people to spend as they see fit. (Again Haha on the fat cat politicians). I hope that this simple explanation is giving people the idea of how we can recoup our countryby peaceful means. Now let's get out there and start the ball rolling. More to come. Additional info by reading web sites such as Neal Boortz.
Pray for our service people.
GOD Bless

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