I'm all steamed up about tax policy.

My sister and I had one of those conversations. Every once in a while, we talk politics and government policy and we were talking tax policy again after the Congress temporarily reformed the Alternative Minimum Tax (AMT). Sadly, our nation's tax policy is more of a social and economic policy than a mechanism to raise revenue for government operations--and it's a distorted mess that favors the wealthy. In fact, the original purpose of the AMT was to correct the problem of the wealthiest taxpayers using endless loopholes and deductions to pay lower tax rates than the so-called "middle class".

Consider the capital gains tax: It's intended to reward investment to keep businesses healthy with fresh money infused into healthy capital markets. In fact, it's a lower tax rate than the taxes that we pay on most of our income earned through things like salaries. And who makes most of their money on investments? The wealthiest citizens!

This is why I sometimes start to complain about taxes and that I agree with Steve Forbes, that we should have a flat tax. As a reminder, a flat income tax simply asks you for a set percentage of your income, regardless of how much--or how little--you make. While it puts the huge industry of tax experts, lawyers, and accountants out of business, it's another way of skewing tax policy in favor of the rich. After all, if you make the annual amount that the federal government calls "poverty level", say, $21,000 for a family of four, you would pay $2,100. Now, a person making ten times that pays ten times as much tax, so that seems equitable to some. The thing is that the impoverished person is left with $18,900 t0 pay the rent, grocery bills, for clothes and, somehow, health insurance. It's a lot easier to afford a $21,000 tax bill when you have another $189,000 to spend. I'll never support a true flat tax.

Still, I'm ready for tax fairness via a radically simplified policy. Let's start by getting rid of nearly every deduction. I'll allow you to keep your personal deductions as well as the ones for dependents. I'll even agree to a mortgage-interest deduction, limited to, say, ten times the median amount paid by all mortgage-holders (I like it when we allow for a certain amount of inflation protection for these things--but we use the median, not the average, or the wealthiest would push up mortgage sizes to their own advantage). And only one residence would qualify. Once we do that, let's agree to, say, three tax rates, rising to a highest rate for the wealthiest--and everything counts as income, including capital gains! I suppose we'll also need a provision to allow people to protect capital gains from home sales and turn those profits over into a replacement home.

And if you want to cut taxes, you can cut them for everybody by simply raising the standard deduction. This would mean a far greater benefit for the poorest when we cut tax rates. The wealthiest would actually get the same reduction in taxes, dollar for dollar, although their overall tax rates certainly wouldn't decline like the poorest people's rates would! And really, if you cut everybody's taxes by $100 per year, who needs the $100 more, the poor guy or Bill Gates? Why should Mr. Gates get a better deal than the guy who really needs it?

Now I know we would still need to make a few exceptions for the unfortunate people who encounter health crises and perhaps natural disasters, but let's stop with making a tax policy that allows the wealthy to manipulate the system in ways the poor can't even begin to imagine.

CDs listened to today:

• The Wonderstuff: Never Loved Elvis
• Remy Shand: The Way I Feel
• Ingram Marshall: Hymnodic Delays
• Ludwig van Beethoven: Incidental Music to Kotzebue's "König Stephan"
• Louis Armstrong: Volume I, The Hot Fives
• stellastarr*: (eponymous)
• Alban Berg: 3 Orchesterstucke
• Marshall Crenshaw: Field Day