WHAT IF THE FAIR SHARE TAX REFORM PLAN WAS ADOPTED?
SEE THE PLAN

ADVANTAGES OF THE PROPOSED "FAIR SHARE" TAX SYSTEM
(OVER THE CURRENT TAX SYSTEM) For explanation and justification of the following, see Tax Reform Essay.
 
FAIRNESS AND RELIEF FOR THE BELEAGUERED WORKING-POOR & MIDDLE-CLASS
- Taxes more proportional to ability to pay
- Taxes more proportional to the extent to which the taxpayer has likely profited from the services governments provide
- Reduction in taxes for about 80% of taxpayers
- Increased wages for about 90% of workers from mandated increases in the minimum and moderate wages coupled with the
    elimination of the employer portion of the Social Security tax
- Reduction in taxes for small businesses
- Reduction in the now-ballooning income and wealth disparities
- Reduced poverty
- End the enormously regressive "property" taxes (on many times the net worth of the middle class and a small fraction of the net 
    worth of the very wealthy)
- Increased ability for young families and lower middle-class to gain a financial foothold
- Reduced hardship to the the poor and middle class during recession through keeping taxes proportional to ability to pay (mainly
    through ending property and sales taxes)
- Increased ability for all citizens to realize their potential through education
 
STRONGER ECONOMY
- Stronger economy through better educated citizens, better government, and improved economic infrastructure
- More credit available to the private sector from reduced government borrowing
- Reduction in debt burden on future generations
- Reduction in distorted tax-based incentives that reward investment over work
- Eliminate tax incentives to retain investments with capital gains regardless whether the investment remains a "good" one
- Rebalancing of economic activities of work, consumption, and saving-investment through elimination of market-distorting tax
   incentives for investment
- Reduction in frequency and sizes of investment bubbles
- Reduction in frequency and sizes of recessions
- Reduced chances of spiraling into deeper recessions by keeping taxes proportional to ability to pay during early recessions
- Less fluctuation in consumer spending, the driving force for the economy and responsible for about two-thirds of the GDP
- Elimination of corporate taxes (human owners pay taxes on corporate profits) attracts corporations from the world over
- Elimination of corporate taxes eliminates costly business decisions made only to reduce corporate tax bill
- Reduced unemployment
- Reduced incentives to retain poor investments due to tax consequences
- Stronger, more prosperous nation
 
IMPROVED GOVERNANCE
- Reduction in the vicious cycle of increased wealth and increased political power for the wealthy minority
- Increased revenue to fund new national priorities (education, research, clean energy, economic infrastructure, international aid)
- Better government through a better educated electorate
- More understandable, transparent system, so more taxpayers feel they and everyone is paying their fair share
- Increased and more stable government revenues from stronger economy, fewer recessions
- Balance budget. No deficit spending. Reduced national debt, state and municipal borrowing.
- Reduced tax payments needed to pay interest on government debt
- Enormously simplified tax system
- Fewer man-hours and less money spent by taxpayers to file taxes
- Less government expenditure to collect taxes
- Universal citizen contribution to any war effort though automatic War Tax
- Improved likelihood of a strong economy and prosperity for future generations

PUBLIC HEALTH AND THE ENVIRONMENT
- Prices better reflect the cost of certain activities to government and society through increased targeted excise taxes
- Certain harmful behaviors (e.g. smoking, fossil fuel use) are discouraged through excise taxes
- Reduced economic inequality associated with (at all levels of society) improved health, life expectancy & societal cohesion; and
  reduced teenage pregnancy, infant mortality, psychiatric illness, substance abuse, and homicide rates
- Behaviors society would like to promote (e.g. saving for education, health-promoting behaviors, retirement) are encouraged
   through unified, tax-free accounts
- Improved health and environment
- Reduced government expenditures from improved health and environment
- Less suffering throughout the world

DISADVANTAGES OF PROPOSED TAX SYSTEM
- Some taxpayer attempt to legally or illegally avoid wealth tax
- There will be some capital flight, where wealthy citizens and residents hide their money offshore; however this will be small
  since the best financial opportunities are in the US, the tax will be little more than most pay in investment fees, and safeguards
  against this can be written into the legislation.
- Increased disclosure of personal financial information, namely net worth, to the government. However, this can be limited to the
  12% needing to pay the tax by having others figure their net worth on a worksheet that is not submitted with the return.
- Increased excise taxes are generally regressive, but this is outweighed by overall reduction in taxes for poor and middle class.
- Slightly reduced investment by wealthy, but this likely balanced by increased savings and investment by middle class.
- An endless din of erroneous claims that "the wealthiest 5% already pay 60% of the taxes" and of cries of "confiscatory" taxation.


HOW WOULD TAX RATES SHIFT UNDER THE FAIR SHARE PLAN?
 
For the current and for my proposed "Fair share" tax systems, I calculate tax rates by adding together all the federal, state, and local taxes (including indirect taxes) paid in a year and dividing the result by the two true measures of a household's ability to pay and the extent to which a household has profited from government services:  1) their annual income including investment gains and 2) their total wealth (net worth):
 
IMPORTANT NOTE: The table shows Total Tax Rates. For instance, under the proposed "Fair Share" system the Smiths would pay no Net-worth Tax, but as shown in the right column of the bottom table, their other taxes (mostly federal, state, and municipal income taxes and some excise taxes) amount to 28% of their net worth (down from 49% under the current system.)