State Income Tax Problems and Solution with 1 Simple Linear Formula
A. Background:
State income tax is relatively complex issue with different factors. There are two extremely political trends. One is that one-group lawmakers like to raise taxes and view tax simplification to conflict with raising public tax revenues. Tax systems may become more complex with multiple tax brackets, many-page withholding tables, many formulas and tax tables, which increase tax system complexity, time and costs. Another group lawmakers like to use a flat tax rate, which is too simple, rough and unfair to treat complex income tax issues. A flat tax rate such as 5% or 17% can not resolve related problems about income tax fairness, revenue, basic living costs, education, public services and other. We need to simplify our tax systems without a flat tax rate.
Many state income tax calculation systems have 2-12 tax brackets, xx taxable income ranges, xx-page withholding tables, xx withholding formulas, tax table (x or xx pages), unsmooth tax rates, and related tax computations, which are complex. Tax systems are usually changed yearly, which have caused these items to be very complex. Many states have 2 tax systems for companies and individuals separately.
B. Tax Simplification Benefits:
1. Research: One-Page Simplification for Payroll, W-2 Report and Federal/State Tax Returns
One-Page Form to Combine W-2, Federal and State Tax Returns Together: Link: Table 3 (38 lines) or Link: Table 5
Postcard or Half-Page Form for State Tax Return: Link: Tables 2-3
2. Our tax simplification research has shown that 1 existing formula and 1 linear formula with 2 brackets to match and replace existing complex tax calculation systems for all withholding taxes and tax returns. Such as (1) California's 9 tax brackets, 216 (9x3x8) formulas and 29-page Withholding Table can be matched/simplified by 98% (1-3/216) reduction. (2) Kansas' 3-8 tax brackets, 48 (3x2x8) formulas and 22-page Withholding Tables can be matched/simplified by 96% (1-2/48) reduction. Link: Research Paper
3. Tax Problems and One Simple Technical Solution: for KS or for MO
4. The tax simplification may have 15 benefits to save up to $900 million (CA) Link: Research Paper (Table 6)
5. Existing Federal Individual Tax System and Simplification
__________________________________________________________________________________________________________
Existing System __ Simplification _______
State Bracket# Status# Formula# Withholding Tables Tax Table Checking Tool Matched by Checking Tool
CA 9 5/3 216 (9×3×8) 29 pages 5 pages No 3 or 2 brackets/formulas Yes
KS 3-8 2 48 (3×2×8) 22 pages 8 pages No 2 brackets/formulas Yes
(More States: Below Part E)
___________________________________________________________________________________________________________
6. Major benefits for different parties
_____________________________________________________________________________________
For Lawmakers: To convert complex factors and options into one simple technical factor and have
no more struggle about detail tax bracket #, different TI ranges and tax rates. Balance
budget is #1 factor to be considered.
Taxpayers: To let more than 50% taxpayers to not file simple tax returns and save time and costs.
Companies: To not need 21-page Withholding Tables and many formulas taxes for payrolls.
IRS: To process more simple and less complex tax returns during busy tax season,
inspect more tax returns, reduce costs and collect more potential taxes.
Value To save more than $20-900 million/year
____________________________________________________________________________________
C. Bill draft, bill, public hearing, related tax problem and solution with one simple linear formula:
1. Sate individual income tax simplification bill draft: Below (Part F)
2. Tax simplification bill: HB 2572 HB 2846 HB 2788 SB 597 HB 1749
3. Public hearing: HB 2844 Testimony HB 2727 Testimony HB 2572 Testimony SB 539 Testimony SB 169 Testimony
4. Why our simple social security tax cliff and tax problems are still not resolved after 5-year discussions?
5. CA Tax Problems and Simple Solution to Save $700 Million NY Tax Problems and Simple Solution to Save $500 Million
6. MO Tax Problems and Simple Solution to Save $170 Million KS Tax Problems and Simple Solution to Save $90 Million
7. Benefits and Values of State LG Tax Simplification for Governments, Businesses, and Taxpayers Research Paper
8. Seniors' Tax Return Simplification: Link: Senior Tax Simplification
9. State Tax Simplification for Fair and Simple Tax Rate and Saving (PPT)
D. Explanations:
1. Half or one page for Federal or state tax return or both tax returns: Payroll and withholding report is provided by companies (A, B & D). An employee just modify (C and E).
When federal and state standard deductions, exemptions, and credits are claimed, two tax returns can be one page, which can help many low and mid incomers. When people have itemized deductions, non-standard exemptions and tax credits, additional information and document(s) may be needed. Tax rate check can be used as a tool to reduce calculation mistakes.
2. Marginal and effective tax rates:
Many people often confuse with marginal and effective tax rates. Marginal tax rates relate to tax brackets. Effective tax rates are actual tax rates. Employers do withholding taxes with such as related 22-page Withholding Tables (KS) or 216 tax formulas (CA). We use effective tax rates. Filing factor F (1, 2, 4, 12, 24, 26, 52 or 365) and tax status S (1, 2 or 1.5) digital numbers simply.
Withholding / Income tax = (Income ± Adjustments - (Deductions + Exemptions) ÷ F) × Tax rate - Tax credits ÷ F
3. Flat, marginal or linear tax rate with cliff, rough or linear smooth tax rate change and better tax plan:
Examples: AK corporate tax has 6 tax brackets (1.5-6%). Multiple marginal tax brackets are complex with rough tax rate changes. Flat tax rates are too simple with potential cliff problem. A flat tax rate can not cover different taxable incomes and from small to large companies reasonably.
A nice business tax plan is to have a relatively low bottom tax rate, which can encourage more people to start businesses. Small businesses hire many employees to meet social and economical needs. Middle and large businesses are more stable and pay relatively higher tax rates reasonably. Small businesses have potential to become middle and large businesses, which help our people and country. Two brackets and formulas for corporate tax is suggested such as at 3%-4.8%-6.5% for KS. The 2 tax rate ranges are used as a checking tool to reduce calculation mistakes. Link
4. Checking tool:
Many existing state tax systems have no any checking tool to check calculations are right or wrong. A checking tool is provided to reduce calculation mistakes with this tax simplification.
E. Existing State Individual Tax System and Simplification Comparison
Existing System Simplification
State Bracket# Status# Formula# Withholding Tables Tax Table Checking Tool Matched by Checking Tool
AL 3 4 96 (3×4×8) 72 pages 6 pages No 2 brackets/formulas Yes
AR 12 1 72 (12×6) 80 pages 5 pages No 2 or 3 brackets/formulas Yes
CA 9 5/3 216 (9×3×8) 29 pages 5 pages No 3 or 2 brackets/formulas Yes
CT 7 3 105 (7×3×5) 14 pages 10 pages No 2 brackets/formulas Yes
DC 6 1 48 (6×8) 16 pages 10 pages No 2 brackets/formulas Yes
HI 9 5/3 27×Periods 32 pages 12 pages No 3 or 2 brackets/formulas Yes
IA 9 1 45 (9×5) 13 pages 5 pages No 2 or 3 brackets/formulas Yes
ID 5-7 2 60 (5×2×6) 24 pages 12 pages No 2 brackets/formulas Yes
KS 3-8 2 48 (3×2×8) 22 pages 8 pages No 2 brackets/formulas Yes
ME 3 3 45 (3×3×5) 10 pages 2 pages No 2 brackets/formulas Yes
MD 8 2 112 (8×2×7) 18 pages 7 pages No 2 brackets/formulas Yes
MN 4 4 96 (4×4×6) 18 pages 6 pages No 2 brackets/formulas Yes
MO 10/9 1 54 (9×6) 10 pages 1 page No 2 brackets/formulas Yes
ND 5 2 40 (5×8) 52 pages 11 page No 2 brackets/formulas Yes
NE 4 4 16×Periods 20 pages 3 pages No 2 brackets/formulas Yes
NJ 7/8 5 280 (7×5×8) 5 pages 9 pages No 2 brackets/formulas Yes
NY 8 5/3 144 (8×3×6) 11 pages 8 pages No 3 or 2 brackets/formulas Yes
OK 7 2 112 (7×2×8) 12 pages 12 pages No 2 brackets/formulas Yes
OR 4 2 60 (6×2×5) 5 pages 3 pages No 2 brackets/formulas Yes
WV 5 2 60 (6×2×5) 12 pages 6 pages No 2 brackets/formulas Yes
WI 4 3 72 (4×3×6) 26 pages 6 pages No 2 brackets/formulas Yes .
F. Sate individual income tax simplification bill draft and situation
1. Alabama tax simplification (3 tax brackets, 96 (3x4x8) formulas (Problem #1: too many formulas), 12 taxable income ranges (Problem
#2: too many ranges), and 72-page Withholding Tables (Problem #3: too many pages) are matched/simplified with 1 fair and simple
linear (slope) formula and 1 existing formula, 98% reduction and 15 benefits) Bill Draft (1 page) Summary (4 pages)
2. Arizona tax simplification (4/5 tax brackets, 40 (4x2x5) formulas (Problem #1: too many formulas), 8 taxable income ranges, Withholding
Tables and 6-page Tax Table (Problem #2: too many pages) are matched/simplified with 1 fair and simple linear (slope) formula/bracket
and 1 existing formula resulting in 95% (1 - 2/40) reduction and 15 benefits) Bill Draft (1 page) Summary (4 pages)
-Property tax refund cliff problem and solution (20 cliffs are matched and simplified with 1 simple slope formula): Solution (No. 3)
Existing tax cliff and multi-bracket problems are resolved with one simple slope formula: AZ Tax Problem & Solution 3. Arkansas tax simplification (12 tax brackets (Problem #1: too many brackets), 72 (12x6) formulas (Problem #2: too many formulas), and
80-page Withholding Tables (Problem #3: too many pages) are matched/simplified with 2 or 1 fair and simple linear formula and 1
existing formula resulting in 97% (1 - 2/72) reduction and 15 benefits) Bill Draft (1 page)
AR Tax Problem & Solution Comparison/Summary (5 pages)
4. California tax calculation simplification (9 tax brackets (Problem #1: too many brackets), 216 (9x3x8) formulas (Problem #2: too many
formulas), and 29-page Withholding Tables (Problem #3: too many pages) are matched/simplified with 2 or 1 fair and simple linear
(slope) formula and 1 existing formula resulting in 98% (1 - 3/216) reduction and 15 benefits)
-Income tax simplification with two or one simple slope formula: Bill Draft (1 page) Comparison/Summary (5 pages)
-CA Earned income tax credit simplification (2,960 EITC numbers are matched/simplified with 4 slope formulas): Solution (No. 3)
Existing tax cliff and multi-bracket problems are resolved with one simple slope formula: CA Tax Problem & Solution
5. Connecticut tax simplification (7 tax brackets, 105 (7x3x5) formulas (Problem #1: too many formulas), 21 taxable income ranges (Problem
#2: too many ranges with different numbers), 14-page Withholding Tables (Problem #3: too many pages), and 10-page Tax Table are
matched/simplified with 1 simple and fair linear (slope) formula, 98% reduction and 15 benefits) Bill Draft (1 page)
6. Delaware tax simplification (7 tax brackets (Problem #1: too many brackets), 36 (6x6) formulas (Problem #2: too many formulas), 8-page
Withholding Tables (Problem #3: too many pages) and 3-page Tax Table are matched/simplified with 1 simple and fair linear (slope)
formula and 1 existing formula resulting in 94% (1 - 2/36) reduction and 15 benefits) Bill Draft (1 page)
7. Georgia tax simplification (6 tax brackets (Problem #1: too many brackets), 144 (6x3x8) formulas (Problem #2: too many formulas),
20-page Withholding Tables (Problem #2: too many pages), and 3-page Tax Table are matched/simplified with 1 fair and simple linear
formula and 1 existing formula resulting in 99% reduction and 15 benefits) Bill Draft (1 page)
8. Hawaii tax simplification (12 tax brackets (Problem #1: too many brackets), 216 (9x3x8) formulas (Problem #2: too many formulas),
27 taxable income ranges (Problem #3: too many ranges), and 32-page Withholding Tables (Problem #4: too many pages) are
matched/simplified with 2 or 1 linear formula, 99% reduction and 15 benefits) Bill Draft (1 page) Summary (5 pages)
9. Idaho tax simplification (5-7 tax brackets, 60 (5x2x6) formulas (Problem #1: too many formulas), 24-page Withholding Tables (Problem
#2: too many pages), and 12-page Tax Table are matched/simplified with 1 simple and fair linear (slope) formula and
1 existing formula resulting in 97% reduction and 15 benefits) Bill Draft (1 page)
10. IL tax simplification with 2 brackets/formulas (without 18-page Withholding Tables) Benefits/Option/Summary (2 pages)
11. Iowa tax calculation simplification (9 tax brackets, 45 (9x5) formulas, and 13-page Withholding Tables are matched/simplified with
2 or 1 simple and fair linear (slope) formula and 1 existing formula resulting in 97% reduction and 15 benefits)
IA Tax Problem & Solution Bill Draft (1 page) Benefits/Value/Summary (5 pages)
12. Kansas income tax simplification (3-8 tax brackets (Problem #1: various bracket numbers), 48 (3x2x8) formulas (Problem #2: too many
formulas), and 22-page Withholding Tables (Problem #3: too many pages) are matched and simplified with 1 fair and simple linear
formula and 1 existing formula, 96% (1 - 2/48) reduction and 15 benefits) Bill Draft (1 page)
- KS Special Session (2024): Tax Problem and Simple Solution
- Kansas has tax problems of income tax system, property tax refund, SS cliff, and corporate tax system. These problems can be
resolved with one simple linear formula to have smooth rate changes Benefits/Value/QA (5 pages) KS Tax Problems & Solution
-Income tax simplification with one simple linear formula: KS Bill: HB 2572 Fiscal Note Testimony 1 Testimony 2
-SS cliff problem & solution with one slope/linear formula: KS Bill: HB 2727 Testimony CCRB HB 2597 (Page 1) Amendment
13. Louisiana tax simplification (3 tax brackets, 96 (3x4x8) formulas (Problem #1: too many formulas), 12 taxable income ranges (Problem
#2: too many ranges with different numbers), and 25-page Withholding Tables (Problem #3: too many pages) are matched/simplified
with 1 simple and fair formula and 1 existing formula, 98% reduction and 15 benefits) Bill Draft (1 page) Summary (3 pages)
14. Maine tax calculation simplification (3 tax brackets, 45 (3x3x5) formulas (Problem #1: too many formulas), 9 taxable income ranges
(Problem #2: too many ranges), and 10-page Withholding Tables (Problem #3: too many pages) are matched/simplified with 1 simple
and fair linear (slope) formula and 1 existing formula, 98% (1 - 2/45) reduction and 15 benefits) Bill Draft (1 page)
15. Maryland tax calculation simplification (8 tax brackets, 112 (8x2x7) formulas (Problem #1: too many formulas), 16 taxable income ranges
(Problem #2: too many ranges), and 18-page Withholding Tables (Problem #3: too many pages) are matched/simplified with 1 simple
and fair linear (slope) formula and 1existing formula, 98% reduction and 15 benefits) Bill Draft (1 page)
16. Minnesota tax simplification (4 tax brackets, 96 (4x4x6) formulas (Problem #1: too many formulas), 16 taxable income ranges (Problem
#2: too many ranges with different numbers), and 18-page Withholding Tables (Problem #3: too many pages) are matched/simplified
with 1 simple and fair linear (slope) formula resulting in 98% reduction and 15 benefits) Bill Draft (1 page) Summary (5 pages)
Homestead credit refund simplification (30 cliffs are matched and simplified with one simple slope formula): Solution (No. 2)
Existing tax cliff and multi-bracket problems are resolved with one simple slope formula: MN Tax Problem & Solution
Social Security Benefit Bill with Cliffs www.revisor.mn.gov/bills/bill.php?b=Senate&f=SF0015&ssn=0&y=2023
Social security cliff problem ($1 income difference may cause $1,100 tax difference, which is totally unfair) Simple Solution
17. Missouri tax calculation simplification (10/9/8 tax brackets (Problem #1: too many brackets), 54 (9x6) formulas (Problem #2: too many
formulas), 9 taxable income ranges and 10-page Withholding Tables (Problem #3: too many pages) are matched/simplified with
1 simple linear (slope) formula and 1 existing formula, 96% (1 - 2/54) reduction, and 15 benefits)
New SBs 3 & 5 tax bill has been signed into law by Governor Mike Parson since October, 2022. 2023 Income Tax Withholding Formulas
are made. There are three major problems. Problems and Solution / Bill Draft (1 page/each) Summary (5 pages)
-Income tax simplification with one simple slope formula: MO Bill: HB 2846 Testimony Tax Analysis and Projection (1 page)
-MO Federal tax percentage cliff problem and solution (4 cliffs are matched with one simple slope formula): Solution (No. 2)
-Property tax credit cliff problem and solution (53 cliffs are matched with one simple slope formula): Solution (No. 3)
Existing tax cliff and multi-bracket problems are resolved with one simple slope formula: MO Tax Problem & Solution
18. Montana tax simplification (7 tax brackets, 48 (2x4x6) formulas (Problem #1: too many formulas), and 7-page Withholding Tables
(Problem #2: too many pages) are matched/simplified with 1 linear formula, 96% reduction and 15 benefits) Bill Draft (1 page)
19. Nebraska tax simplification (4 tax brackets, 96 (4x4x6) formulas (Problem #1: too many formulas), 16 taxable income ranges and 20-page
Withholding Tables (Problem #2: too many pages) are matched/simplified with 1 linear formula, 98% reduction and 15 benefits)
-Income tax simplification with one simple slope formula: Bill Draft (1 page) Comparison/Summary (5 pages)
-NE Tax credit for child and dependent care expenses (8 cliffs are matched/simplified with one simple slope formula): Solution (No. 2)
Existing tax cliff and multi-bracket problems are resolved with one simple slope formula: NE Tax Problem & Solution
20. New Jersey tax simplification (7/8 tax brackets, 280 (7x5x8) formulas (Problem #1: too many formulas), 35 taxable income ranges
(Problem #2: too many ranges), 5-page Withholding Tables (Problem #3: too many pages), and 9-page Tax Table are
matched/simplified with 1 simple linear (slope) formula resulting in 99% reduction and 15 benefits) Bill Draft (1 page)
21. New Mexico tax simplification (6/10 tax brackets (Problem #1: too many brackets), 30 taxable income ranges (Problem #2: too many
ranges with different numbers), and 144/240 (10x3x8) formulas (Problem #3: too many formulas) are matched/simplified with 1 simple
linear (slope) formula and 1 existing formula resulting in 99% reduction and 15 benefits) Bill Draft (2 page) Prior Bill Draft
22. New York tax simplification (8 tax brackets, 144 (8x3x6) formulas (Problem #1: too many formulas), 24 taxable income ranges (Problem
#2: too many ranges), and 11-page Withholding Tables (Problem #3: too many pages) are matched/simplified with 2 or 1 fair and
simple linear (slope) formula and 1 existing formula resulting in 99% reduction and 15 benefits) Bill Draft (1 page)
-Household credit simplification (9 brackets and 137 numbers are matched/simplified with one simple slope formula): Solution (No. 2)
Existing tax cliff and multi-bracket problems are resolved with one simple slope formula: NY Tax Problem & Solution
23. North Dakota tax simplification (5 tax brackets (Problem #1: too many brackets), 20 taxable income ranges (Problem #2: too many
ranges with different numbers), 40 (5x8) formulas (Problem #3: too many formulas), and two tax systems for withholding taxes and
tax returns (Problem $4: too complex) are matched/simplified with 1 simple linear (slope) formula and 1 existing formula resulting
in 96% reduction and 15 benefits) Bill Draft (2 page)
24. Ohio tax simplification (5/8 tax brackets (Problem #1: too many brackets) 48 (6x8) formulas (Problem #2: too many formulas), and
11-page Withholding Tables (Problem #3: too many pages) are matched/simplified with 1 simple linear (slope) formula and 1 existing
formula resulting in 96% reduction (1-2/48) and 15 benefits) Bill Draft (1 page)
25. Oklahoma tax simplification (7 tax brackets, 112 (7x2x8) formulas (Problem #1: too many formulas), 14 taxable income ranges
(Problem #2: too many ranges), and 12-page Withholding Tables (Problem #3: too many pages) are matched/simplified with 1 simple
linear (slope) formula and 1 existing formula resulting in 98% reduction and 15 benefits) Bill Draft (1 page)
26. Oregon tax simplification (4 tax brackets, 60 (6x2x5) formulas (Problem #1: too many formulas), 8 taxable income ranges
(Problem #2: too many ranges), and 5-page Withholding Tables (Problem #3: too many pages) are matched/simplified with 1 simple
linear (slope) formula and 1 existing formula resulting in 97% (1 - 2/) reduction and 15 benefits) Bill Draft (1 page)
27. Rhode Island tax simplification (3 tax brackets, 24 (3x8) withholding formulas (Problem #1: too many formulas), and 11-page
Withholding Tables (Problem #2: too many pages and too complex) are matched/simplified with 1 simple linear (slope) formula
and 1 existing formula resulting in 94% reduction and 15 benefits) Bill Draft (1 page)
28. South Caroline tax simplification (6 tax brackets (Problem #1: too many brackets), 36 (6x6) formulas (Problem #2: too many
formulas), and 5-page Withholding Tables (Problem #3: too many pages) are matched/simplified with 1 simple linear (slope) formula
and 1 existing formula resulting in 94% (1 - 2/36) reduction and 15 benefits) Bill Draft (1 page)
29. Vermont tax simplification (5 tax brackets (Problem #1: too many brackets), 20 taxable income ranges (Problem #2: too many
ranges with different numbers), 35 (5x7) formulas (Problem #3: too many formulas), and two tax systems for withholding taxes and
tax returns (Problem $4: too complex) are matched/simplified with 1 simple linear (slope) formula and 1 existing formula resulting
in 94% (1 - 2/35) reduction and 15 benefits) Bill Draft (2 page)
30. Virginia (4 tax brackets, 32 (4x8) formulas (Problem #1: too many formulas), 10-page Withholding Tables (Problem #2: too many
pages), and 9-page Tax Table are matched/simplified with 1 linear formula, 97% reduction, and 15 benefits) Bill Draft (1 page)
31. Washington, D.C. tax simplification (6 tax brackets, 48 (6x8) formulas (Problem #1: too many formulas), and 16-page Withholding Tables
(Problem #2: too many pages) are matched/simplified with 1 fair and simple linear (slope) formula and 1 existing formula resulting in
96% (1 - 2/48) reduction and 15 benefits) Bill Draft (1 page)
32. West Virginia tax simplification (5 tax brackets, 60 (5x2x6) formulas (Problem #1: too many formulas), 12-page Withholding Tables
(Problem #2: too many pages), and 6-page Tax Table are matched/simplified with 1 simple linear (slope) formula and 1 existing
formula resulting in 97% (1 - 2/60) reduction and 15 benefits) Bill Draft (1 page)
33. Wisconsin tax simplification (4 tax brackets, 72 (4x3x6) formulas (Problem #1: too many formulas), 12 taxable income ranges (Problem
#2: too many ranges), and 26-page Withholding Tables (Problem #3: too many pages) are matched/simplified with 1 simple linear
(slope) formula and 1 existing formula resulting in 97% reduction and 15 benefits) Bill Draft (1 page) Comparison/Summary (5 pages)
-WI Standard deduction simplification (672 numbers are matched/simplified with one simple linear formula): Solution (Page 5)
34. Social security tax cliff, EITC, working credit, and multi-bracket simplifications with 1 fair slope formula Summary (3 pages)
35. Would you please join me to sign or support a public petition to simplify our tax systems and save our tax revenue (billions of dollars)
www.change.org/p/income-tax-simplification-to-save-our-tax-revenue-billions-of-dollars
State income tax is relatively complex issue with different factors. There are two extremely political trends. One is that one-group lawmakers like to raise taxes and view tax simplification to conflict with raising public tax revenues. Tax systems may become more complex with multiple tax brackets, many-page withholding tables, many formulas and tax tables, which increase tax system complexity, time and costs. Another group lawmakers like to use a flat tax rate, which is too simple, rough and unfair to treat complex income tax issues. A flat tax rate such as 5% or 17% can not resolve related problems about income tax fairness, revenue, basic living costs, education, public services and other. We need to simplify our tax systems without a flat tax rate.
Many state income tax calculation systems have 2-12 tax brackets, xx taxable income ranges, xx-page withholding tables, xx withholding formulas, tax table (x or xx pages), unsmooth tax rates, and related tax computations, which are complex. Tax systems are usually changed yearly, which have caused these items to be very complex. Many states have 2 tax systems for companies and individuals separately.
B. Tax Simplification Benefits:
1. Research: One-Page Simplification for Payroll, W-2 Report and Federal/State Tax Returns
One-Page Form to Combine W-2, Federal and State Tax Returns Together: Link: Table 3 (38 lines) or Link: Table 5
Postcard or Half-Page Form for State Tax Return: Link: Tables 2-3
2. Our tax simplification research has shown that 1 existing formula and 1 linear formula with 2 brackets to match and replace existing complex tax calculation systems for all withholding taxes and tax returns. Such as (1) California's 9 tax brackets, 216 (9x3x8) formulas and 29-page Withholding Table can be matched/simplified by 98% (1-3/216) reduction. (2) Kansas' 3-8 tax brackets, 48 (3x2x8) formulas and 22-page Withholding Tables can be matched/simplified by 96% (1-2/48) reduction. Link: Research Paper
3. Tax Problems and One Simple Technical Solution: for KS or for MO
4. The tax simplification may have 15 benefits to save up to $900 million (CA) Link: Research Paper (Table 6)
5. Existing Federal Individual Tax System and Simplification
__________________________________________________________________________________________________________
Existing System __ Simplification _______
State Bracket# Status# Formula# Withholding Tables Tax Table Checking Tool Matched by Checking Tool
CA 9 5/3 216 (9×3×8) 29 pages 5 pages No 3 or 2 brackets/formulas Yes
KS 3-8 2 48 (3×2×8) 22 pages 8 pages No 2 brackets/formulas Yes
(More States: Below Part E)
___________________________________________________________________________________________________________
6. Major benefits for different parties
_____________________________________________________________________________________
For Lawmakers: To convert complex factors and options into one simple technical factor and have
no more struggle about detail tax bracket #, different TI ranges and tax rates. Balance
budget is #1 factor to be considered.
Taxpayers: To let more than 50% taxpayers to not file simple tax returns and save time and costs.
Companies: To not need 21-page Withholding Tables and many formulas taxes for payrolls.
IRS: To process more simple and less complex tax returns during busy tax season,
inspect more tax returns, reduce costs and collect more potential taxes.
Value To save more than $20-900 million/year
____________________________________________________________________________________
C. Bill draft, bill, public hearing, related tax problem and solution with one simple linear formula:
1. Sate individual income tax simplification bill draft: Below (Part F)
2. Tax simplification bill: HB 2572 HB 2846 HB 2788 SB 597 HB 1749
3. Public hearing: HB 2844 Testimony HB 2727 Testimony HB 2572 Testimony SB 539 Testimony SB 169 Testimony
4. Why our simple social security tax cliff and tax problems are still not resolved after 5-year discussions?
5. CA Tax Problems and Simple Solution to Save $700 Million NY Tax Problems and Simple Solution to Save $500 Million
6. MO Tax Problems and Simple Solution to Save $170 Million KS Tax Problems and Simple Solution to Save $90 Million
7. Benefits and Values of State LG Tax Simplification for Governments, Businesses, and Taxpayers Research Paper
8. Seniors' Tax Return Simplification: Link: Senior Tax Simplification
9. State Tax Simplification for Fair and Simple Tax Rate and Saving (PPT)
D. Explanations:
1. Half or one page for Federal or state tax return or both tax returns: Payroll and withholding report is provided by companies (A, B & D). An employee just modify (C and E).
When federal and state standard deductions, exemptions, and credits are claimed, two tax returns can be one page, which can help many low and mid incomers. When people have itemized deductions, non-standard exemptions and tax credits, additional information and document(s) may be needed. Tax rate check can be used as a tool to reduce calculation mistakes.
2. Marginal and effective tax rates:
Many people often confuse with marginal and effective tax rates. Marginal tax rates relate to tax brackets. Effective tax rates are actual tax rates. Employers do withholding taxes with such as related 22-page Withholding Tables (KS) or 216 tax formulas (CA). We use effective tax rates. Filing factor F (1, 2, 4, 12, 24, 26, 52 or 365) and tax status S (1, 2 or 1.5) digital numbers simply.
Withholding / Income tax = (Income ± Adjustments - (Deductions + Exemptions) ÷ F) × Tax rate - Tax credits ÷ F
3. Flat, marginal or linear tax rate with cliff, rough or linear smooth tax rate change and better tax plan:
Examples: AK corporate tax has 6 tax brackets (1.5-6%). Multiple marginal tax brackets are complex with rough tax rate changes. Flat tax rates are too simple with potential cliff problem. A flat tax rate can not cover different taxable incomes and from small to large companies reasonably.
A nice business tax plan is to have a relatively low bottom tax rate, which can encourage more people to start businesses. Small businesses hire many employees to meet social and economical needs. Middle and large businesses are more stable and pay relatively higher tax rates reasonably. Small businesses have potential to become middle and large businesses, which help our people and country. Two brackets and formulas for corporate tax is suggested such as at 3%-4.8%-6.5% for KS. The 2 tax rate ranges are used as a checking tool to reduce calculation mistakes. Link
4. Checking tool:
Many existing state tax systems have no any checking tool to check calculations are right or wrong. A checking tool is provided to reduce calculation mistakes with this tax simplification.
E. Existing State Individual Tax System and Simplification Comparison
Existing System Simplification
State Bracket# Status# Formula# Withholding Tables Tax Table Checking Tool Matched by Checking Tool
AL 3 4 96 (3×4×8) 72 pages 6 pages No 2 brackets/formulas Yes
AR 12 1 72 (12×6) 80 pages 5 pages No 2 or 3 brackets/formulas Yes
CA 9 5/3 216 (9×3×8) 29 pages 5 pages No 3 or 2 brackets/formulas Yes
CT 7 3 105 (7×3×5) 14 pages 10 pages No 2 brackets/formulas Yes
DC 6 1 48 (6×8) 16 pages 10 pages No 2 brackets/formulas Yes
HI 9 5/3 27×Periods 32 pages 12 pages No 3 or 2 brackets/formulas Yes
IA 9 1 45 (9×5) 13 pages 5 pages No 2 or 3 brackets/formulas Yes
ID 5-7 2 60 (5×2×6) 24 pages 12 pages No 2 brackets/formulas Yes
KS 3-8 2 48 (3×2×8) 22 pages 8 pages No 2 brackets/formulas Yes
ME 3 3 45 (3×3×5) 10 pages 2 pages No 2 brackets/formulas Yes
MD 8 2 112 (8×2×7) 18 pages 7 pages No 2 brackets/formulas Yes
MN 4 4 96 (4×4×6) 18 pages 6 pages No 2 brackets/formulas Yes
MO 10/9 1 54 (9×6) 10 pages 1 page No 2 brackets/formulas Yes
ND 5 2 40 (5×8) 52 pages 11 page No 2 brackets/formulas Yes
NE 4 4 16×Periods 20 pages 3 pages No 2 brackets/formulas Yes
NJ 7/8 5 280 (7×5×8) 5 pages 9 pages No 2 brackets/formulas Yes
NY 8 5/3 144 (8×3×6) 11 pages 8 pages No 3 or 2 brackets/formulas Yes
OK 7 2 112 (7×2×8) 12 pages 12 pages No 2 brackets/formulas Yes
OR 4 2 60 (6×2×5) 5 pages 3 pages No 2 brackets/formulas Yes
WV 5 2 60 (6×2×5) 12 pages 6 pages No 2 brackets/formulas Yes
WI 4 3 72 (4×3×6) 26 pages 6 pages No 2 brackets/formulas Yes .
F. Sate individual income tax simplification bill draft and situation
1. Alabama tax simplification (3 tax brackets, 96 (3x4x8) formulas (Problem #1: too many formulas), 12 taxable income ranges (Problem
#2: too many ranges), and 72-page Withholding Tables (Problem #3: too many pages) are matched/simplified with 1 fair and simple
linear (slope) formula and 1 existing formula, 98% reduction and 15 benefits) Bill Draft (1 page) Summary (4 pages)
2. Arizona tax simplification (4/5 tax brackets, 40 (4x2x5) formulas (Problem #1: too many formulas), 8 taxable income ranges, Withholding
Tables and 6-page Tax Table (Problem #2: too many pages) are matched/simplified with 1 fair and simple linear (slope) formula/bracket
and 1 existing formula resulting in 95% (1 - 2/40) reduction and 15 benefits) Bill Draft (1 page) Summary (4 pages)
-Property tax refund cliff problem and solution (20 cliffs are matched and simplified with 1 simple slope formula): Solution (No. 3)
Existing tax cliff and multi-bracket problems are resolved with one simple slope formula: AZ Tax Problem & Solution 3. Arkansas tax simplification (12 tax brackets (Problem #1: too many brackets), 72 (12x6) formulas (Problem #2: too many formulas), and
80-page Withholding Tables (Problem #3: too many pages) are matched/simplified with 2 or 1 fair and simple linear formula and 1
existing formula resulting in 97% (1 - 2/72) reduction and 15 benefits) Bill Draft (1 page)
AR Tax Problem & Solution Comparison/Summary (5 pages)
4. California tax calculation simplification (9 tax brackets (Problem #1: too many brackets), 216 (9x3x8) formulas (Problem #2: too many
formulas), and 29-page Withholding Tables (Problem #3: too many pages) are matched/simplified with 2 or 1 fair and simple linear
(slope) formula and 1 existing formula resulting in 98% (1 - 3/216) reduction and 15 benefits)
-Income tax simplification with two or one simple slope formula: Bill Draft (1 page) Comparison/Summary (5 pages)
-CA Earned income tax credit simplification (2,960 EITC numbers are matched/simplified with 4 slope formulas): Solution (No. 3)
Existing tax cliff and multi-bracket problems are resolved with one simple slope formula: CA Tax Problem & Solution
5. Connecticut tax simplification (7 tax brackets, 105 (7x3x5) formulas (Problem #1: too many formulas), 21 taxable income ranges (Problem
#2: too many ranges with different numbers), 14-page Withholding Tables (Problem #3: too many pages), and 10-page Tax Table are
matched/simplified with 1 simple and fair linear (slope) formula, 98% reduction and 15 benefits) Bill Draft (1 page)
6. Delaware tax simplification (7 tax brackets (Problem #1: too many brackets), 36 (6x6) formulas (Problem #2: too many formulas), 8-page
Withholding Tables (Problem #3: too many pages) and 3-page Tax Table are matched/simplified with 1 simple and fair linear (slope)
formula and 1 existing formula resulting in 94% (1 - 2/36) reduction and 15 benefits) Bill Draft (1 page)
7. Georgia tax simplification (6 tax brackets (Problem #1: too many brackets), 144 (6x3x8) formulas (Problem #2: too many formulas),
20-page Withholding Tables (Problem #2: too many pages), and 3-page Tax Table are matched/simplified with 1 fair and simple linear
formula and 1 existing formula resulting in 99% reduction and 15 benefits) Bill Draft (1 page)
8. Hawaii tax simplification (12 tax brackets (Problem #1: too many brackets), 216 (9x3x8) formulas (Problem #2: too many formulas),
27 taxable income ranges (Problem #3: too many ranges), and 32-page Withholding Tables (Problem #4: too many pages) are
matched/simplified with 2 or 1 linear formula, 99% reduction and 15 benefits) Bill Draft (1 page) Summary (5 pages)
9. Idaho tax simplification (5-7 tax brackets, 60 (5x2x6) formulas (Problem #1: too many formulas), 24-page Withholding Tables (Problem
#2: too many pages), and 12-page Tax Table are matched/simplified with 1 simple and fair linear (slope) formula and
1 existing formula resulting in 97% reduction and 15 benefits) Bill Draft (1 page)
10. IL tax simplification with 2 brackets/formulas (without 18-page Withholding Tables) Benefits/Option/Summary (2 pages)
11. Iowa tax calculation simplification (9 tax brackets, 45 (9x5) formulas, and 13-page Withholding Tables are matched/simplified with
2 or 1 simple and fair linear (slope) formula and 1 existing formula resulting in 97% reduction and 15 benefits)
IA Tax Problem & Solution Bill Draft (1 page) Benefits/Value/Summary (5 pages)
12. Kansas income tax simplification (3-8 tax brackets (Problem #1: various bracket numbers), 48 (3x2x8) formulas (Problem #2: too many
formulas), and 22-page Withholding Tables (Problem #3: too many pages) are matched and simplified with 1 fair and simple linear
formula and 1 existing formula, 96% (1 - 2/48) reduction and 15 benefits) Bill Draft (1 page)
- KS Special Session (2024): Tax Problem and Simple Solution
- Kansas has tax problems of income tax system, property tax refund, SS cliff, and corporate tax system. These problems can be
resolved with one simple linear formula to have smooth rate changes Benefits/Value/QA (5 pages) KS Tax Problems & Solution
-Income tax simplification with one simple linear formula: KS Bill: HB 2572 Fiscal Note Testimony 1 Testimony 2
-SS cliff problem & solution with one slope/linear formula: KS Bill: HB 2727 Testimony CCRB HB 2597 (Page 1) Amendment
13. Louisiana tax simplification (3 tax brackets, 96 (3x4x8) formulas (Problem #1: too many formulas), 12 taxable income ranges (Problem
#2: too many ranges with different numbers), and 25-page Withholding Tables (Problem #3: too many pages) are matched/simplified
with 1 simple and fair formula and 1 existing formula, 98% reduction and 15 benefits) Bill Draft (1 page) Summary (3 pages)
14. Maine tax calculation simplification (3 tax brackets, 45 (3x3x5) formulas (Problem #1: too many formulas), 9 taxable income ranges
(Problem #2: too many ranges), and 10-page Withholding Tables (Problem #3: too many pages) are matched/simplified with 1 simple
and fair linear (slope) formula and 1 existing formula, 98% (1 - 2/45) reduction and 15 benefits) Bill Draft (1 page)
15. Maryland tax calculation simplification (8 tax brackets, 112 (8x2x7) formulas (Problem #1: too many formulas), 16 taxable income ranges
(Problem #2: too many ranges), and 18-page Withholding Tables (Problem #3: too many pages) are matched/simplified with 1 simple
and fair linear (slope) formula and 1existing formula, 98% reduction and 15 benefits) Bill Draft (1 page)
16. Minnesota tax simplification (4 tax brackets, 96 (4x4x6) formulas (Problem #1: too many formulas), 16 taxable income ranges (Problem
#2: too many ranges with different numbers), and 18-page Withholding Tables (Problem #3: too many pages) are matched/simplified
with 1 simple and fair linear (slope) formula resulting in 98% reduction and 15 benefits) Bill Draft (1 page) Summary (5 pages)
Homestead credit refund simplification (30 cliffs are matched and simplified with one simple slope formula): Solution (No. 2)
Existing tax cliff and multi-bracket problems are resolved with one simple slope formula: MN Tax Problem & Solution
Social Security Benefit Bill with Cliffs www.revisor.mn.gov/bills/bill.php?b=Senate&f=SF0015&ssn=0&y=2023
Social security cliff problem ($1 income difference may cause $1,100 tax difference, which is totally unfair) Simple Solution
17. Missouri tax calculation simplification (10/9/8 tax brackets (Problem #1: too many brackets), 54 (9x6) formulas (Problem #2: too many
formulas), 9 taxable income ranges and 10-page Withholding Tables (Problem #3: too many pages) are matched/simplified with
1 simple linear (slope) formula and 1 existing formula, 96% (1 - 2/54) reduction, and 15 benefits)
New SBs 3 & 5 tax bill has been signed into law by Governor Mike Parson since October, 2022. 2023 Income Tax Withholding Formulas
are made. There are three major problems. Problems and Solution / Bill Draft (1 page/each) Summary (5 pages)
-Income tax simplification with one simple slope formula: MO Bill: HB 2846 Testimony Tax Analysis and Projection (1 page)
-MO Federal tax percentage cliff problem and solution (4 cliffs are matched with one simple slope formula): Solution (No. 2)
-Property tax credit cliff problem and solution (53 cliffs are matched with one simple slope formula): Solution (No. 3)
Existing tax cliff and multi-bracket problems are resolved with one simple slope formula: MO Tax Problem & Solution
18. Montana tax simplification (7 tax brackets, 48 (2x4x6) formulas (Problem #1: too many formulas), and 7-page Withholding Tables
(Problem #2: too many pages) are matched/simplified with 1 linear formula, 96% reduction and 15 benefits) Bill Draft (1 page)
19. Nebraska tax simplification (4 tax brackets, 96 (4x4x6) formulas (Problem #1: too many formulas), 16 taxable income ranges and 20-page
Withholding Tables (Problem #2: too many pages) are matched/simplified with 1 linear formula, 98% reduction and 15 benefits)
-Income tax simplification with one simple slope formula: Bill Draft (1 page) Comparison/Summary (5 pages)
-NE Tax credit for child and dependent care expenses (8 cliffs are matched/simplified with one simple slope formula): Solution (No. 2)
Existing tax cliff and multi-bracket problems are resolved with one simple slope formula: NE Tax Problem & Solution
20. New Jersey tax simplification (7/8 tax brackets, 280 (7x5x8) formulas (Problem #1: too many formulas), 35 taxable income ranges
(Problem #2: too many ranges), 5-page Withholding Tables (Problem #3: too many pages), and 9-page Tax Table are
matched/simplified with 1 simple linear (slope) formula resulting in 99% reduction and 15 benefits) Bill Draft (1 page)
21. New Mexico tax simplification (6/10 tax brackets (Problem #1: too many brackets), 30 taxable income ranges (Problem #2: too many
ranges with different numbers), and 144/240 (10x3x8) formulas (Problem #3: too many formulas) are matched/simplified with 1 simple
linear (slope) formula and 1 existing formula resulting in 99% reduction and 15 benefits) Bill Draft (2 page) Prior Bill Draft
22. New York tax simplification (8 tax brackets, 144 (8x3x6) formulas (Problem #1: too many formulas), 24 taxable income ranges (Problem
#2: too many ranges), and 11-page Withholding Tables (Problem #3: too many pages) are matched/simplified with 2 or 1 fair and
simple linear (slope) formula and 1 existing formula resulting in 99% reduction and 15 benefits) Bill Draft (1 page)
-Household credit simplification (9 brackets and 137 numbers are matched/simplified with one simple slope formula): Solution (No. 2)
Existing tax cliff and multi-bracket problems are resolved with one simple slope formula: NY Tax Problem & Solution
23. North Dakota tax simplification (5 tax brackets (Problem #1: too many brackets), 20 taxable income ranges (Problem #2: too many
ranges with different numbers), 40 (5x8) formulas (Problem #3: too many formulas), and two tax systems for withholding taxes and
tax returns (Problem $4: too complex) are matched/simplified with 1 simple linear (slope) formula and 1 existing formula resulting
in 96% reduction and 15 benefits) Bill Draft (2 page)
24. Ohio tax simplification (5/8 tax brackets (Problem #1: too many brackets) 48 (6x8) formulas (Problem #2: too many formulas), and
11-page Withholding Tables (Problem #3: too many pages) are matched/simplified with 1 simple linear (slope) formula and 1 existing
formula resulting in 96% reduction (1-2/48) and 15 benefits) Bill Draft (1 page)
25. Oklahoma tax simplification (7 tax brackets, 112 (7x2x8) formulas (Problem #1: too many formulas), 14 taxable income ranges
(Problem #2: too many ranges), and 12-page Withholding Tables (Problem #3: too many pages) are matched/simplified with 1 simple
linear (slope) formula and 1 existing formula resulting in 98% reduction and 15 benefits) Bill Draft (1 page)
26. Oregon tax simplification (4 tax brackets, 60 (6x2x5) formulas (Problem #1: too many formulas), 8 taxable income ranges
(Problem #2: too many ranges), and 5-page Withholding Tables (Problem #3: too many pages) are matched/simplified with 1 simple
linear (slope) formula and 1 existing formula resulting in 97% (1 - 2/) reduction and 15 benefits) Bill Draft (1 page)
27. Rhode Island tax simplification (3 tax brackets, 24 (3x8) withholding formulas (Problem #1: too many formulas), and 11-page
Withholding Tables (Problem #2: too many pages and too complex) are matched/simplified with 1 simple linear (slope) formula
and 1 existing formula resulting in 94% reduction and 15 benefits) Bill Draft (1 page)
28. South Caroline tax simplification (6 tax brackets (Problem #1: too many brackets), 36 (6x6) formulas (Problem #2: too many
formulas), and 5-page Withholding Tables (Problem #3: too many pages) are matched/simplified with 1 simple linear (slope) formula
and 1 existing formula resulting in 94% (1 - 2/36) reduction and 15 benefits) Bill Draft (1 page)
29. Vermont tax simplification (5 tax brackets (Problem #1: too many brackets), 20 taxable income ranges (Problem #2: too many
ranges with different numbers), 35 (5x7) formulas (Problem #3: too many formulas), and two tax systems for withholding taxes and
tax returns (Problem $4: too complex) are matched/simplified with 1 simple linear (slope) formula and 1 existing formula resulting
in 94% (1 - 2/35) reduction and 15 benefits) Bill Draft (2 page)
30. Virginia (4 tax brackets, 32 (4x8) formulas (Problem #1: too many formulas), 10-page Withholding Tables (Problem #2: too many
pages), and 9-page Tax Table are matched/simplified with 1 linear formula, 97% reduction, and 15 benefits) Bill Draft (1 page)
31. Washington, D.C. tax simplification (6 tax brackets, 48 (6x8) formulas (Problem #1: too many formulas), and 16-page Withholding Tables
(Problem #2: too many pages) are matched/simplified with 1 fair and simple linear (slope) formula and 1 existing formula resulting in
96% (1 - 2/48) reduction and 15 benefits) Bill Draft (1 page)
32. West Virginia tax simplification (5 tax brackets, 60 (5x2x6) formulas (Problem #1: too many formulas), 12-page Withholding Tables
(Problem #2: too many pages), and 6-page Tax Table are matched/simplified with 1 simple linear (slope) formula and 1 existing
formula resulting in 97% (1 - 2/60) reduction and 15 benefits) Bill Draft (1 page)
33. Wisconsin tax simplification (4 tax brackets, 72 (4x3x6) formulas (Problem #1: too many formulas), 12 taxable income ranges (Problem
#2: too many ranges), and 26-page Withholding Tables (Problem #3: too many pages) are matched/simplified with 1 simple linear
(slope) formula and 1 existing formula resulting in 97% reduction and 15 benefits) Bill Draft (1 page) Comparison/Summary (5 pages)
-WI Standard deduction simplification (672 numbers are matched/simplified with one simple linear formula): Solution (Page 5)
34. Social security tax cliff, EITC, working credit, and multi-bracket simplifications with 1 fair slope formula Summary (3 pages)
35. Would you please join me to sign or support a public petition to simplify our tax systems and save our tax revenue (billions of dollars)
www.change.org/p/income-tax-simplification-to-save-our-tax-revenue-billions-of-dollars