Paul
Buchheit is a college teacher, an active member of US Uncut Chicago, founder
and developer of social justice and educational websites
(UsAgainstGreed.org, PayUpNow.org, RappingHistory.org), and the editor and
main author of "American
Wars: Illusions and Realities" (Clarity Press). He can be
reached at paul@UsAgainstGreed.org.
The betrayals come in many forms. Here are a few of the
more outrageous, and destructive, examples:
... Evasion:
... While corporate profits have doubled to $1.9 trillion in less than ten
years, the corporate income tax rate, which for thirty years hovered around
the 20-25% level, suddenly dropped to 10% after the recession.
... Delusion: Technology companies won't admit that
much of their 'innovation' is due to public assistance
... Desertion: The people who benefit most from
government are renouncing their citizenships to avoid taxes
... Denial: Traders feel it's inappropriate to pay even
a tiny tax on a quadrillion dollars in sales ...
A quadrillion dollars sounds like a fake amount. But it's all too real.
That's a thousand trillion dollars of derivatives transactions ...
... The issues are difficult to address with Congress
largely on the side of the wealthy. At the very least:
(1) Eliminate the tax break on unearned income (capital
gains). The richest Americans, who own most of the stocks, should not pay a
smaller tax than everyone else.
(2) Implement a small financial transactions tax.
2-4-8 Response: [Note the ENews website seems to be politically
supportive of President Obama with tax reform ideas typical of the tax only
the 1% approach]
1. Increasing the capital gains tax rate will cause the
wealthy not to sell their stock and other capital assets. This will result
in a delay and loss of tax revenue. If the wealthy need cash they can borrow
against their assets without selling them and paying taxes. Capital assets
should be taxed via a net wealth tax on all assets.
2. A financial transactions tax is good if you want to
hurt the market and make the US less competitive with markets in other parts
of the world.
If you want a fair tax system that helps the middle
class please consider the 2-4-8 Tax Blend – a comprehensive tax reform for
both individuals and business that can be defined in one sentence:
Tax individual and corporate income at a flat 8% rate
(with no deductions, credits or loopholes), tax individual net wealth at 2%
(excluding $15,000 cash and retirement funds) and impose a 4% Value Added
Sales Tax (VAT) on business.
For business the combined 8% income rates and 4% VAT
would be the lowest and most competitive business taxes of all the developed
countries. [The U.S. is the only developed country without a VAT]. The 8%
income tax rate also resolves the significant problem in the deferral of
taxes on foreign profits caused by imposing a 35% tax (less credit for
foreign taxes paid) when the money is brought back into the U.S.
For investors, the net wealth tax might seem
revolutionary by U.S. standards, but most high earners would willingly pay a
2% net wealth tax in exchange for eliminating the capital gains and estate
taxes and keeping 92% of taxable earnings. The ability to buy and sell
assets without being taxed on the gains would spur a new era of investment
freedom. The increased after tax income would also create wealth much faster
than a 2% net wealth tax could diminish it.
For workers, the elimination of the payroll tax and
reduction of the income tax rate creates an immediate boost in take home
pay. For example, a young family earning $70,000 currently pays combined
federal taxes of 19% but would take home $7,700 more with an 8% income tax
(assuming net wealth of under $30,000). This additional $641 per month
represents an enormous opportunity for both savings and consumption. The
$15,000 per person cash wealth tax exemption also encourages a responsible
level of liquidity. The retention of tax exempt retirement savings programs
recognizes the need for the elderly to have sufficient assets to supplement
social security. Current interest tax deductions for mortgages and student
loans are replaced by the ability to deduct the loan principal in computing
net wealth. This is the equivalent of a 2% reduction in the interest rate
and is arguably a better incentive for both home ownership and higher
education.
Eugene Patrick Devany, JD, MPA
http://www.TaxNetWealth.com
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