What is a “fair” tax? With the recent release of Mitt Romney’s tax returns showing he paid a rate well below that of what we expect for a billionaire this debate has been reignited (granted, for many it never went away). Also, the story of Warren Buffet and his secretary is once again in the news after the State of the Union. The thing is, with so many ways to make money, it is hard to come up with a system that taxes one “fairly”. Within a cohort of millionaires, you can bet that they acquire their money in different manners. For instance, Prince Fielder, he of the newly signed 9 year $214 Million with the Detroit Tigers will be taxed differently than the CEO of Comerica Bank. While Fielder will get his money via a “salary”, like most of us, the CEO of Comerica will likely get a large portion of his compensation via stock options, dividends and other various non-salary means. Because of this, they are taxed differently under the income tax system our Country uses.
It is painfully obvious that the tax code we currently employ for generating income for our governments(s) is outdated and beyond repair. However, what is the best solution?