STIES: Simplified Taxes and Immediate Economic Stimulation.
In order to gain the most in changing the tax code and create a level of fairness across the entire taxpayer population, regardless of income levels, a new approach to federal income taxation is needed. At the same time, any changes to the tax code should provide immediate economic stimulation for the nation.
STIES embraces supply-side economics and a simplification of the tax code. STIES will frontload the supply-side economic approach by putting monies in the hands of millions of wage earners immediately and throughout the year. Instead of waiting for business tax incentives, tax refunds, and rebates, STIES provides year round stimuli. The economic stimuli is consumer driven, allowing free market forces to sustain gains.
The STIES plan has three major goals.
1. Simplify the taxation of wage earners
2. Create a flat and fair tax for all taxpayers
3. Provide consumer-driven economic stimulation by making monies available throughout the year.
The STIES plan in a glance.
1. The first $4,000.00 of wages earned by all employees in any quarter of the tax year will not to be subject federal income tax, therefore noting will be withheld. (This will provide immediate funds for millions of individuals to spend, save or invest!)
2. Once wages exceed $4,000.00 in any quarter, federal income tax will be withheld at a flat rate for the remainder of the quarter. (A wage earner who makes $4,000.00 a month would have taxes withheld for the last two months of the quarter. A wage earner making $8,000.00 a month, would have taxes withheld on $4,000.00 the first month, and all wages after that for the remainder or the quarter.)
3. All wage earners will be covered by the STIES withholding plan.
4. All non-wage earners, such as business owners, consultants, contract employees, etc., that are not subject to withholding tax will remain under the rules of the present tax code.
5. The standard and universal tax deduction for all taxpayers filing returns as individuals will be $16,000 per year. (Married couples will combine for $32,000) Most other itemized deductions will be eliminated. (Schedule D gross adjusted income deductions would be limited to property taxes, state and local taxes. employee business and medical expenses.)
6. All individuals wage earners will be taxed a flat rate to be determined.
7. All non-wage earners will be taxed a flat rate after business related adjustments for expenses, investments, depreciation, services, etc. have be applied (based on the present tax code).
STIES will simplify the tax returns of most workers. The IRS resources will be eased as most tax returns can fit the simplified filing format. Deductions will be independent of marital status, home ownership and other factors that effect some, but not others. The deductions and flat rate will be the same for all wage earners.
Capital gains will be taxed at the same flat rate as wages.
Non-wage earners now use the tax code in many ways; some say this is to stimulate business sectors, encourage investments, or to avoid paying taxes. STIES will allow non-wager earners to continue to use the present tax code for these incentives.
Note: STIES defines wage earners as any worker compensated by an employer and it is the employers responsibility to calculate and withhold taxes and other tariffs, such as social security, benefits and state and local taxes fees. STIES defines non-wage earners as anyone who earns compensation that is paid directly to them, and is not subject to payee withholding.