Hopefully, the passage today of the punitive tax against bonuses of failed financial institutions, like AIG, will be the beginning of taxing the greed out of America.   Clearly, this has to be passed by the Senate, signed by Obama, and nothing can be assumed.  It is encouraging that ordinary Americans are outraged about  excessive compensation.  Unfortunately, this type of excessive compensation has been around a long time and still continues.  Nobody should be allowed to take excessive compensation without it being subjected to punitive taxes.

Most people don’t understand there are many ways to compensate: salaries, bonusues, and stock options.   I believe there should be a methodology that punitively taxes all forms of compensation once it is determined to be excessive.  For me, anything over $1 million per year in total income is excessive and the rest should be taxes at 100%.  On the other end of the scale, I wouldn’t tax anything less than a living wage which is roughly $30K per year in many areas of the country.

If you think about the U.S. tax code nearly all of it is not for ordinary Americans.  That is, anybody who uses only standard deductions and personal exemptions, represent virtually none of the tax code.  I am for eliminating the entire tax code and implementing a very simplified system based on cash accounting.    That is, after everybody determines the amount of their annual income, they apply it to a tax table that is incremented by the living wage.  There is no tax for the first bracket that represents income up to a living wage.  In the second bracket, there is a very small tax.  So, people can make twice a living wage and pay little in taxes.  Each successive bracket, pays a greater amount of taxes.  Once the income is above $1 MILLION, the tax is 100%. This is all very simple and fair.  There is still plenty of incentives to make more money for 95% of the population who will never make a $MILLION per year.

Let Congress hand out tax credits to encourage specific behavior, e.g. like buying a fuel efficient automobile.  There are no deductions at all.  Instead, have a simple list of tax credits that are available published on the IRS web site.  Everything clear and transparent.  Even though this is a very fair system, it is unlikely it will ever be implemented.

America is doomed.