The Federal Income Tax Turns 100!

The 16th amendment was passed and 100 years ago American's started paying income tax.  Initially there were 7 brackets starting at 1% with the top bracket being 7% on incomes over $11,000,000+ in today's dollars.  Right now nine states manage without any income tax (Alaska, Florida, Nevada, South Dakota, Texas, Washington, Wyoming, Tennessee, New Hampshire) and when Bobby Jindal, Gov. of Louisiana, announced his #1 legislative goal for 2013 was repealing his states income tax it only took days for him to back down and recant his extreme position.

More states are considering the repeal of their income tax  Nebraska, Kansas, Georgia, Oklahoma and North Carolina are seriously considering this as way to compete with their neighbors and create jobs.  Maybe Governor Jindal should have started with corporate taxes?  I've talked to many Virginians about the idea that corporations shouldn't be taxed because they ultimately pass this cost onto consumers.  The feedback I’ve gotten has been quite positive.  People from various backgrounds and political views seem to innately understand the concept that corporations don't pay tax, people pay tax.

Virginia's legislative session is over, but as our elected officials file their returns I hope they appreciate our system is just too complicated at best and that the 100 year experiment has resulted, as predicted, in a government that knows no bounds.  Maybe, just maybe, it's time that once again Virginia take the lead and consider "extreme" tax reform.

Could Virginia stop taxing corporations?

I've talked to many Virginians about the idea that corporations shouldn't be taxed because they simply pass the cost of taxation onto consumers and the feedback I’ve gotten is very positive.  People from various backgrounds and political views seem to innately understand this concept.

For years North Carolina, Tennessee and Kentucky have lured our civil service and military retirees to their states by exempting retirement pay from state income tax.  Why couldn't Virginia drop the bomb with corporate taxation, repeal it and successfully lure more businesses here?

I bet this sounds nuts, but right now nine states (Alaska, Florida, Nevada, South Dakota, Texas, Washington, Wyoming, Tennessee, New Hampshire) don't have any income tax and Louisiana, Nebraska, Kansas, Georgia, Oklahoma and North Carolina are seriously considering repealing theirs.  Furthermore, the nine states with out income tax refute the dire forecasts that eliminating income taxes will negatively impact schools, public safety and other social programs.  

If North Carolina, Tennessee and Kentucky have figured out they can net more revenue by luring retirees why can't Virginia do the same with corporations.  It's a bold idea but one deserving of consideration.  I'm not a native Virginian, but I've lived here since 1991, raised two daughters and put them through state universities.  I'm proud of Virginia, consider this home and I understand if your not growing, it's only a matter of time before you decline.

** Update **

Scratch Louisiana from the list.  Gov. Bobby Jindal scraps his plan only days after announcing it.  Turns out that what works in nine states is TOO EXTREME for Louisiana.  "Governor, you’re moving too fast, and we aren’t sure that your plan is the best way to do it,” is what Gov. Jindal indicates he's been hearing.