The reality is that 99.9% of the tax law is simply a series of incentives for people to take certain actions to grow the economy. ~ Tom Wheelwright, Tax-Free Wealth Author
Tempe, Arizona (PRWEB) July 27, 2015
With the first presidential primary debate scheduled for August 6, 2015, Tax-Free Wealth Author, CEO and CPA Tom Wheelwright raises 5 key questions about how the candidates propose to change the tax law for this hot topic. The majority of Americans (including most politicians) have very little knowledge about how the tax law really works in the United States. Tom is known for explaining the tax law in simple terms, and addresses issues candidates and voters will face when it comes to tax policy in America.
Congress learned early on that people hate paying taxes. Unlike most Americans, Tom Wheelwright loves the tax law and is happy to raise critical debate topics and translate what the candidates are saying regarding: 1. Flat Tax, 2. Fair Taxes, 3. Simplified Taxes, 4. Lower Rate Impacts, and 5. How the Tax Code is a Series of Incentives.
1. Is a Flat Tax a Fair Tax? - The consensus among the Republican candidates appears to be a “broadening” of the tax base and flatter rates. Rand Paul is calling for his “Fair Tax,” a 14% flat tax on consumption. The challenge with this Flat Tax proposal is “fair to whom?” Paul is going to run into issues regarding how to pay for the reduced tax rate, the major positive tax benefit to the rich and the likely substantial increase in tax to the poor (who frequently pay no tax at all).
2. What is a Fair Tax? - People want the tax to be fairer. The question that even Ronald Reagan couldn’t answer was how to make the income fairer and simpler at the same time. What is fair to one person is not fair to another. Is it fair that a person who owns a home gets a deduction for interest when a person who rents doesn’t get a deduction for rent? How a person feels about the behaviors promoted by the tax system proposed by a candidate will influence how they vote.
3. Would Simplified Taxes help or hurt the economy? - There is a lot of discussion about the need to simplify the law. Some candidates are calling for a reduction of 2-3 rates such as Reagan implemented in the 1980s. And Donald Trump previously proposed rates as low as 1%, 5%, 10% and 15%. A simplified tax can have benefits, and be dangerous at the same time. Remember what happened in the late 1980s after the 1986 Tax Reform Act eliminated the investment benefits of investing in real estate in order to simplify the tax law, resulting in the Savings and Loan crisis. This was the last major tax reform where rates were “simplified,” and the tax base was broadened.
4. What would be the impact of Lower Tax Rates? - Voters need to question what would lower tax rates mean to the average American, and what would be the likely effects on the economy? Is it really possible to lower tax rates from a current high of 39.6%, or is this really all just political rhetoric destined to die like all other major tax reform proposals of the past 30 years? One of the issues to look for in the proposals by the candidates is whose tax rates will get lowered?
5. How is the Tax Code a Series of Incentives? - The reality is that 99.9% of the tax law is simply a series of incentives for people to take certain actions to grow the economy. For example, there are tax incentives for home ownership, donating to charity, becoming a business owner, investments, having more children, sending children to college, paying alimony to a former spouse, buying an electric car and saving for retirement. The question for the candidates is how they will change those benefits.
Tom Wheelwright, CPA and CEO of ProVision Wealth (Tempe, Arizona), is a leading tax and wealth expert, speaker, published author of Tax-Free Wealth, and a Rich Dad Advisor/Speaker for Robert Kiyosaki, who wrote Rich Dad Poor Dad. Donald Trump selected Tom to contribute to his Wealth Builders Program, calling Tom the best of the best. He is best known for making taxes fun, easy and understandable, and specializes in helping entrepreneurs and investors build wealth through practical and strategic ways that permanently reduce taxes. He is the Founder of WealthStrategyU, and has been featured in Accounting Today, Investors Business Daily, Deseret News National, and as a guest on the ABC Radio News, AM870 The Answer, Money Radio 1510 Business for Breakfast, Real Estate Guys Radio Show and more. http://taxfreewealthadvisor.com