Exactly. I feel like a lot of people here either didn't pay attention to the article or are using it as an opportunity to go on a tangent about corporate/family taxes. The disconnect between the two is listed clearly in the second sentence of the article. Companies are predominately taxed on profit. Families are predominately taxed on revenue. That drastically decreases the tax burden for high revenue businesses and drastically increases the tax burden for families that are barely getting by (i.e. low profit).
The standard deduction seems like a nod in this direction. Perhaps it could be increased to be in line with the average expenses of a middle class family.
Personally, I don’t think people should be paying a cent of income tax until they’re well on their way to an upper-middle class income. Taxes should always be taken out of surpluses, and never make it harder to achieve a baseline level of comfort and stability. The same should apply to new businesses—not a cent of taxes or fees until revenue is sufficient to support its owner(s), and perhaps even a few employees. If you tax something, you get less of it, so we should be very deliberate about what we’re taxing. If we tax the road to the “American dream”, a lot less people will arrive there.
Whatever tax increases are required on the wealthy and larger businesses to accomplish this would be well worth it imo. A big, healthy middle class with lots of new business formation benefits everyone, including and especially the wealthy.
I'd abolish the standard deduction. Rather, move it into the tax brackets. At an absolute minimum the 0% bracket should extend to the poverty line, I think 150% of the poverty line would be a better fence. The standard deduction basically says you don't get to deduct many things you should be able to deduct. All the games we play with deductions are a shell game by Congress to stealthily raise taxes on the poor/middle class.
I agree with correcting that discrepancy - but why stop at just families? I know society loves to say it's incentivizing family building - but it also creates scenarios adverse to society. Just make the tax code treat everyone the same and tax everyone on revenue minus costs.
I don't think we want that extreme either because not all costs are equal. It is entirely different equation for a family making $50k to write off their groceries versus Jeff Bezos writing off a $400m superyacht.
