Sabtu, 01 Oktober 2011

Taxation in US

A simple proposal that I can suggest to US Tax system is restructuring. US Government needs bigger revenue and it is coming from tax. Individual tax income so far does not suffice. How are we going to solve the debate among the proponent and the supporter of tax restructure?

Here are my tax restructuring suggestions:
1. Business or Corporate tax income should be left alone or even got lowered since more small businesses/ entrepreneurial entities need tax breaks to fuel their business growth in this challenging global economy.
Big businesses should be taxed slightly more on their Net Operating Income than their smaller business counterparts.

2. I believe in open market economy and market efficiency but I do object CEO salary and compensation's exaggeration.  A company should limit CEO compensation meaning both salary and stocks+option+benefit package no greater than 20 times the average salary of regular mid-level salary of the managerial level in the same company. Say if the average mid-level salary of the managerial level (based on market salary competitiveness) is USD$150,000 then the CEO's total compensation shouldn't be greater than USD$3,000,000 overall.
Too many times, US CEO's is rewarded way too much than their truly worth and even when CEO doesnot perform well or being fired, he / she is still compensated excessively. Truly, do you believe one CEO's job should be done by more than 20 mid-level Managers ? I don't. Plus if a CEO is fired from doing an awful job, don't pay him / her all the compensation promised just the suffering package that should be in the lower amount than the compensation promised at the beginning of the contract / job appointment.

3. Tax Individual Income a Flat Rate. What I mean is that for individual income can be coming from salary or dividend or gain / loss from long term investment + short term investment + any other income prodicing activity (such as: sole-proprietorship activity, landlording activity, etc). Dividend and gain/loss shouldnot be taxed at lower rate but include it in the individual income. For example: if everyone is taxed at 25% then from a wage earner of USD$35,000 to a high-networth individual earning USD$3,000,00 both will contribute the same proportion of tax revenue to US Government.

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