The Washington Post, February 2, 2012
Warren Buffettâ€™s "nuclear bomb"
Susan Brooks Thistlethwaite was the
president of Chicago Theological Seminary from 1998 to 2008 and is a senior
fellow at the Center for American Progress. She writes:
Class warfare? Yes, itâ€™s real, and itâ€™s a war. Indeed, it is an
â€˜unjust war,â€™ and immoral. It is not wealth itself that is immoral in
America today; what is immoral is the growing political influence that
extreme wealth can buy. Itâ€™s a struggle for political influence to get
economic advantages, including tax advantages, and in this kind of class
warfare, only the mega wealthy have â€œthe nuclear bombâ€ as Warren Buffett has
... This is, by any measure, an â€˜unjust war,â€™
and that is what makes it immoral. Some of the mega wealthy have engaged in
a deliberate and sustained effort to â€œun-level the playing fieldâ€ in
America. They have been spending enormous sums to create conditions that
hugely favor one group (the very wealthy) over another (the rest). To set
out to do this on purpose is immoral precisely because it is creates a
society that is structured to be unfair.
Your conclusion that, â€œ[a]ll Americans have a moral
obligation to level the playing field â€¦ and â€œto end this class warfare
through policies that promote fairnessâ€ is something I share with a deep
passion. I have spent years working on the problem and sincerely believe I
have found a tax solution to eliminate â€œclass warfareâ€ by restoring economic
vitality and mobility. I would be remiss if I did not invite you to consider
the 2-4-8 Tax Plan.
1) Make all business tax returns publicly available
online for free. Cheating will be substantially reduced. Business
contributions (political or otherwise) will be public and become part of the
businessâ€™s reputation. The market will more easily and transparently
identify the businesses which are productive.
2) Adopt the 2-4-8 Tax Plan which is a simple mix of
three flat rate taxes. Tax 2% on individual net wealth, 4% on retail sales
and 8% on individual and corporate income.
The exact same rates apply to the rich and poor. There are no different tax
brackets, deductions or credits, and no favoritism.
The three taxes would yield about $2.6 trillion per year (slightly more than
the current combination of Income, Social Security, gasoline and other
federal taxes and fees).
At the risk of over simplification the process of
upward mobility can be illustrated by contrasting a flat rate income tax of
28% versus a combined 8% income tax and 2% wealth tax for each of the next
ten years. The latter combined tax would permit an individual to keep 20%
more salary each year and tax another 2% of the amount not consumed for the
next ten years. If one saved the 20% for 5 years it would be like having a
yearâ€™s of salary in the bank on top of what might have otherwise been saved
under a 28% flat tax rate (conservatively assuming the 2% wealth tax was
offset by investment interest).
It is hard to imagine anyone that wouldnâ€™t welcome a 2% tax on net wealth
and a small 4% sales tax, in exchange for drastically reduced 8% individual
income tax rate. Even Bill Oâ€™Rielly (a/k/a the â€œFactorâ€) supports a national
sales tax (of 3%) as part of much needed tax reform. The concurrent
elimination of social security, capital gains, estate and gift taxes; and a
significant reduction of the corporate income tax rate to 8% should
guarantee near universal support from social liberals and business
3) More jobs through improved business competition, restored upward
mobility, problem solved!
Eugene Patrick Devany JD, MPA