The Daily Caller, Feb. 24, 2012
â€˜Fair Shareâ€™ Myth
by Joseph F. Petros III
is an associate at the law firm of Warren and Young PLL in Ashtabula, Ohio.
He served as executive editor of the Notre Dame Journal of Law, Ethics
& Public Policy. He opines:
... The president has
deliberately framed his tax argument in terms of fairness, demanding that
the rich simply pay their â€œfair shareâ€ ... the president cannot run on the
true substance of his proposals, which demand that the rich contribute
much more of their income than everyone else. ... He has taken advantage
of the complexity of the tax code to mislead the American people on a
subject they do not fully understand, and few in the Republican ranks have
directly called him out on it.
candidates, presidential and congressional, want to gain any traction with
the electorate this year, they must address this fairness myth head on. ...
Hereâ€™s an idea: raise the rates on dividends and capital gains to parallel
the regular income rates, but totally eliminate the corporate tax. ... It
would give corporations a huge incentive to reinvest their profits in
further growth, and it would give investors a reason to prefer long-term
investment over short-term payoff. ... It is no coincidence that candidates
have been most successful this election season when they have talked about
true tax reform (remember 9-9-9 fever?)
Itâ€™s, â€œtime to explain the truth to the American
people.â€ All right, the tax code is not fair. The disparity in both income
and accumulated wealth of the well-to-do has grown along with the $15
trillion national debt. The economic mobility (and purchasing power) of most
Americans has diminished. High unemployment is a major drain on the market.
Corporations donâ€™t reinvest more of their profits because the customer base
is not there.
Alas we should simply be nostalgic about 9-9-9 fever.
It would be fun to, â€œcall the presidentâ€™s bluff and propose a plan for tax
reform that truly is fair.â€ I invite you and Mr. Obama to consider the 2-4-8
The 2-4-8 Tax Blend broadens the tax base by taxing individual and
foreign-owned net wealth at 2% (above a $15,000 exemption), retail sales at
4% and income at 8%. It would yield $2.6 trillion â€“ ($400 billion more than
FY 2010 federal revenue). The tax blend is progressive even though rich and
poor would pay the same tax rate. Diverse individuals and groups from Bill
Oâ€™Reilly (a/k/a the Factor) to Herman Cane and the Bipartisan Policy Center
support a national sales tax (between 3 and 9%) as a necessary component of
tax reform. Periodic (event-based) taxes from capital gains, estate and gift
taxes would not be necessary because of the wealth tax. The concurrent
elimination of payroll taxes and a significant reduction of the corporate
income tax rate to 8% should merit near universal support from social
liberals and business conservatives alike. The winners and losers (-if
there be any) do not follow any traditional partisan or political spectrum.
Please think outside the box before you react. Try to contrast a 30% income
tax with an 8% income tax joined with a 2% wealth tax for each of the next
11 years. The latter combined income-wealth tax would permit an individual
to save and keep at least 22% more salary each year. Now thatâ€™s real
economic mobility-especially for young people starting out.
Corporations would feel less of a need to influence politicians once tax
incentives are off the table. How would an 8% corporate income tax affect
jobs and the economy? Those answers are better left to your talents and
dreams for a brighter future.
Eugene Patrick Devany, JD, MPA