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SHOULD YOU BE PAYING A TOTAL TAX RATE 3 TIMES HIGHER THAN MITT ROMNEY'S?
Federal income taxes account for only 30% of the taxes we pay. Add in Social Security, sales, and property taxes and consider untaxed investment gains (as I have at this website), and you'll see total tax rates for the very wealthy are much lower than those of the working-poor and middle-class.
Our current tax system favors the wealthy investor-class so much that even a flat 20% tax would make the tax system much more fair, providing that income below a reasonable poverty line - that is, income needed to keep food on the table - is taxed at a lower rate.
The Fair Share Tax Reform proposed here would cut working-poor and middle-class taxes by thousand each year, have the wealthy pay their fair share again, allow the economy to grow sustainably to everyone's benefit, and balance the budget (if combined with reasonable spending cuts).
"I applaud you on your website, which is the best idea for US policy I have seen in my 73-year lifetime."
THE FAIR SHARE TAX REFORM
20 - 2 - 1½
1. Federal Income Tax:
All income and compensation is taxed at a 20% rate except:
- Income under a realistic poverty line (eg $15,000 for a single person), which is taxed at 2% instead
- Income used to pay for large medical expenses (>10% of income) is tax-free
- Income placed into tax-free education-retirement savings account (with modest caps)
- No other adjustments, deductions, or exemptions
Effective rates: 10% on $60,000; 15% on $160,000; 19% on $1,000,000.
2. Federal Net-Worth Tax:
All net worth (accumulated wealth), except the first ~$800,000 is taxed at a progressive 1-1.7% rate.
This tax replaces property, capital gains & estate taxes. Net-worth is the best measure of how much
a household has profited from the economic infrastructure government (all taxpayers) provide.
Effective rates: 0.2% on $1million; 1.0% on $3million; 1.6% in $10million
3. Federal War Tax: A 6% surcharge increases a federal taxes bill of $10,000 to $10,600 while the
nation is at war.
4. Eliminate all these taxes:
- Social Security Taxes - Programs funded from general revenue instead
- Estate Taxes & Capital Gain Taxes - Replaced by more efficient and fair Net-worth Tax
- State Income Taxes in their current form - Replaced by more efficient and fair surcharge - See #5
- Property (real estate) taxes - Replaced by more efficient and fair surcharge - See #5 - Sales taxes, tolls, etc. - Replaced by more efficient and fair surcharge - See #5
- Corporate Taxes - Profits distributed to corporate owners and taxed as income.
5. All states and local governments eliminate all their current taxes and instead set and collect
a surcharge on a household's combined Federal Income and Net-worth Tax.
6. Excise taxes on products that have a cost to society that is not reflected in their price
(e.g. cigarettes, gasoline - Totals only about 10% of all tax revenue.)
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| UNDER THIS FAIR SHARE TAX REFORM:
A family of four with both spouses working and wages of $73,000 would have their total tax bill (federal, state, and local combined) cut from their current rate of 39% to a Fair Share Rate of 25% of their wages. This would save them about $10,000 per year to pay down debt, save for college, save for retirement ...
Warren Buffett would have his total tax bill (federal, state, and local combined, including corporate taxes) increase for his current rate of 11% to a Fair Share rate of 50% of his $8 billion investment gains and income.
Mitt Romney would have his total tax bill (federal, state, and
local combined, including corporate taxes) increase for his current rate
of 14% to a Fair Share rate of 44% of his estimated $36 million investment gains
and income. That is from 2.0% to 6.3% of his net worth.
Almost everyone could complete a one-page tax bill for all their taxes in under one hour, content in the knowledge that everyone was paying their Fair Share.
We would end the economic distortions of the current tax system that suppress consumption and encourage investment bubbles, and so replace our string of frequent, deep recessions with sustainable growth.
Government revenue would increase about 7%, allowing public investment in education, research, and infrastructure, ensuring future economic grown. Combined with about 16% sensible spending cuts, the national debt could gradually be paid down.
IF WE FIXED OUR TAX SYSTEM, EVERYONE, INCLUDING THE WEALTHY, WOULD BE BETTER OFF. READ ON TO SEE HOW.
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