Letter: Alter tax base from income

Wednesday, March 7, 2001 | 9:02 a.m.

Lately the media have been devoting a lot of ink and bandwidth to how much federal income taxes should be cut and who should benefit. Most of it misses the mark, in favor of media-grabbing showbiz about mufflers and Mercedes.

I have one simple question. Why do corporations pay a profits tax and individuals pay an income tax?

It seems to me any accountant with a sharp pencil can show that a single person, in a metropolitan area where he can make that much, is paying about $25,000 a year for food, shelter, clothing, utilities, transportation, health insurance, etc., all of which is necessary to stay healthy and be a productive employee. A second person in the same household will cost an additional $10,000 after savings in housing, transportation and insurance costs for two. With public primary and secondary education, the little tykes will take an additional $5,000 each. That adds up to about $45,000 a year for a family of four, and doesn't even include what they pay in payroll (FICA) taxes and what they need to put away for a decent retirement. A puny exemption and standard deduction of $7,000 for a individual or $15,000 for a family of four is only about a third of the real co st. Do we limit corporate deductions to a third of actual expenses?

Why don't our representatives and the powerful advocates in the media start talking about real tax reform and change the personal income tax to a personal profits tax? This would take over half the working people in the country off the tax rolls. They pay enough anyway, in sales taxes, profits taxes passed on by corporations in the price of products they buy, and property taxes.

Then we can argue about the rates the people that actually make a profit will pay to finance the federal government.

ELWOOD A. ANDERSON