Wealth Tax in the News
A Collection of Articles and Comments Referencing Wealth Taxes

http://www.nytimes.com/2014/07/24/opinion/nicholas-kristof-idiots-guide-to-inequality-piketty-capital.html?comments#permid=12377593:12377990

One has to read three quarters of the book to get to tax reform and learn that there is a huge gap in laying out the problem and formulating a solution. It seems Piketty, like Kristof (and Mr. Porter in today’s Upshot) continue to ignore the loss of wealth at the bottom and confuse opportunity to work with the opportunity to avoid taxes, when they write about inequality.

To fill in some of the blanks I submit that the biggest economic problem is not the concentration at the top but the significant loss of income and wealth at the bottom. The U.S. has 25% of its workers employed in minimum entry level work. Workers are desperate because the poorer half of the country gradually lost 70% of their share of net wealth between 1995 and 2010 and the trend is continuing. With $56 trillion in individual net wealth in 2010 and a 1.1 percent share the poorer half of the population was worth about $616 billion. Now consider that individual wealth increased from $56 trillion in 2010 to $82 trillion today – a gain of about $542 billion every month.

The marginal federal tax rate on labor is 29% (expected to rise to 32% by 2014) while the marginal tax rate on capital investment is only 18%. Virtually all labor is taxed but very little capital gains are taxed because most of the assets are not sold during the owner’s lifetime.

We do not need a wealth tax and higher income tax rates. We need an 8% income tax rate (and no job killing payroll taxes) for those willing to pay a 2% wealth tax.

 

http://douthat.blogs.nytimes.com/2014/07/21/helping-parents-cope-leaving-kids-alone/?comments#permid=12353389

The “approach embodied by the E.I.T.C./child credit [food stamp] combination, in which the state gooses parental wages rather than taking direct responsibility for providing childcare” describes the worst options to what is really a payroll tax problem. The 15.3% payroll taxes are regressive (applying only to wages under $115,000), tax each U.S. job (encourage outsourcing and leaving businesses with less money for workers) and reduce take home pay. The C.B.O. indicates that the marginal tax rate on labor is 29% and projects this will increase to 32% in ten years. Wealthy investors are and will be taxed at an 18% marginal rate.

The EITC was passed with bipartisan support decades ago because the payroll tax rates had become onerous particularly to poor families with children. It follows that if payroll taxes are replaced we don’t need the EITC. More importantly, a replacement of payroll tax revenue with an 8% VAT, 1% wealth tax and/or elimination of some of the $1.3 trillion in tax expenditures would encourage full employment and higher salaries for all workers.

Just as community safety is an issue separate and apart from child care, the support of children should be an issue separate and apart from “income”. It is family wealth more than income which should trigger the support that each child deserves. Children in families with below average wealth should get government help while children in families with adequate wealth don’t need any supplemental help from the government.

 

http://www.nytimes.com/2014/07/22/upshot/goodbye-to-the-republican-wave.html?comments#permid=12345478:12346704

A Not-So-Miserable Economy

The Democrats own this not so miserable economy that saw individual net wealth increase from $56 trillion in 2010 to $82 trillion today. Indeed, the investment class should vote Democratic this time around out of gratitude. Of course, this leaves the GOP looking somewhere else for a political “wave”.

Unfortunately, 90% of the population has suffered with stagnant wages following a 70% loss of family wealth for the poorer half of the population since 1995. The nonpartisan Congressional Budget Office also projected this month that the 18% marginal income tax rate for returns to capital will remain at 18% for capital investments while the 29% marginal income tax rate for labor will increase to 31% over the next 10 years.

The Democrats have no plan to turn things around and have failed to take any position on Bill Gates’ suggestion of replacing the job killing payroll taxes to help workers. The poor and lower middle class who need a fairer tax code and better jobs might just stay home or even vote for the GOP this time around. After all, the economy tends to be miserable only for those with Democratic leanings.

 

http://www.nytimes.com/2014/07/16/opinion/thomas-edsall-a-shift-in-young-democrats-values.html?comments#permid=12297960

Tax reform choices have expanded beyond soaking the rich. Even a wealth tax which Thomas Piketty says is needed to combat the wealth gap can be optional. Consider a flat 26% income tax that reduces to 8% for anyone that elects to pay a 2% wealth tax (excluding $15,000 cash and $500,000 retirement savings). Bill Gates also said that a revenue neutral replacement of the payroll taxes could create jobs and increase salaries. This is what young people need but the Democrats don’t even offer the option.

Better and different taxes, rather than more taxes, can fix a lot of wrong. Democrats should capitalize on the 46% growth in individual wealth going from $56 trillion in 2010 to $82 trillion today. There is plenty of money (over a million dollars for the average family of four) and most of the astonishing gains have not been included in taxable income.

The young know the money is there and the poor and middle class have been over taxed for decades. This is the only explanation as to why the poorer half of the U.S. population lost 70% of their net wealth between 1995 and 2010. Read more at TaxNetWealth.com

 

http://douthat.blogs.nytimes.com/2014/07/03/does-america-need-new-ideas/?comments#permid=12200726

The mainstream GOP are not willing to let go of the bad. The $1.3 trillion in tax expenditure redistribute 7.5% of GNP primarily to individuals who don’t need it. The 15.3% payroll taxes discourage U.S. jobs and over tax workers. Most economic growth is wealth that is not taxed or earned because it is unrealized capital gains.

The conservative reformers who have written Room to Grow don’t want to make any big changes in the status quo because the economy is very good at the top. They refuse to believe that full employment is necessary and see a downside to higher wages for workers. Individual wealth grew 46% over the last four years going from $56 trillion to $82 trillion while wages have stagnated. Don’t expect any of this money to reduce the deficit, increase wages or reduce the taxes of the less fortunate.

Neither the left nor the right understands how much and how many ways those at the bottom are over taxed. If they did it could produce some winning political ideas and we would stop hearing about carbon taxes, immigration reform, gas taxes or poor families earning less than $250,000 a year. We need to hear how much the "average" family of four with over $1 million in wealth should pay in taxes.

 

http://www.nytimes.com/2014/07/03/opinion/nicholas-kristof-porsches-potholes-and-patriots.html?comments#permid=12188871

Tax Who?

Consider wealth. The poorer half of the population lost a staggering 70% share of their net wealth between 1995 and 2010. This is because the poor and middle class have been over taxed and under paid – (if they have jobs at all). The loss of wealth is hard to believe in the City of Wall Street where a two bedroom apartment sells for $1 million dollars or more. In fact U.S. individual wealth increased from $56 trillion in 2010 to $82 trillion today (an “average” of $1 million for a family of four). The median is much less and middle class families average around $100,000. Individuals at the bottom have less than $5,000 each.

Those who drive Porches and live in million dollar dwellings are always happy to pay a little more to the government because the 46% increase in wealth in just 4 years has not been taxed. Most of it is from unrealized capital gains and it would only take a tax of one one thousandth of the un-taxed economic gains in the last four years to produce $26 billion (several times more than is needed by the Highway Trust Fund).

Of course those who drive Porches, like those who write for the New York Times, are not willing to give up even one day of their gains in investment wealth and will only fund road improvements with gas or use taxes that fall most heavily on the suburbs, the middle class, and the poor who have to drive to their minimum wage jobs. Isn't it bad enough that President Obama keeps gas prices high by reducing production?

 

http://douthat.blogs.nytimes.com/2014/06/27/reform-conservatism-on-work-and-poverty/?comments#permid=12140125

The conservatives may want to promote, “work and family” but they don’t. A real work agenda requires a replacement of the job killing payroll taxes. These regressive taxes have been kept for too long as a result of a counterproductive fix called the Earned Income Tax Credit (EITC). The GOP wants to expand it with a large $2,500 per child credit so more women will work a little, but not too much, rather than stay home and care for their children.

The big policy problem on both the left and right is the failure to consider net wealth in defining poverty and determining what public assistance should be offered. Some low earners have wealth well above the median and do not need government assistance in the form of food stamps, EITC and/or health care. For ease and simplicity most programs only consider income rather than wealth (assets less liabilities).

Consider tax reform that eliminates the payroll taxes (to encourage full employment) and imposes a flat 26% income tax with the option of reducing the rate to 8% by additionally paying a 2% tax on net wealth (excluding $15,000 per person and $500,000 retirement savings). Over 95% of taxpayers would agree to pay the wealth tax because most poor families would not exceed the exemption and middle class families would save much more with the 8% income tax rate then they would pay with the 2% wealth tax.

The enhanced tax data would also identify those individuals and families that are truly needy and exclude those who are not.

 

http://www.nytimes.com/2014/06/28/upshot/a-minimum-wage-that-makes-more-sense.html?comments#permid=12135841:12137287

Harm a Few [Minimum Wage]

or

Help All [Payroll Tax Replacement]

The variations in costs are considerable from one city to another and (considering local unemployment rates) may justify 22 states implementing a minimum wage above the current federal minimum of $7.25 per hour. Apparently 28 states have not done so either because the state legislatures are heartless or because these local representatives sincerely disagree with the Congressional Democrats and believe their businesses could be harmed and the unemployment rate made worse. Who knows best?

Bill Gates opposed an increase in the federal minimum wage when he spoke at the American Enterprise Institute on March 13, 2014 because he was concerned about job losses. The CBO projected a 500,000 loss. Gates said that the way to increase jobs and salaries was to replace the job killing payroll taxes with a new tax base (VAT, wealth tax, etc.). All workers would get an immediate 7.65% increase in take home pay and each job would be 7.65% less expensive to U.S. businesses (and discourage outsourcing).

Keep in mind that a minimum wage amounts to a tax on struggling businesses and does not hurt established businesses that already can afford to pay their workers more. A higher minimum wage can destroy new business and the struggling competition (which is why established businesses like it). Tax reform which replaces payroll taxes simply improves the labor market for U.S. workers. It is also the ideal response to a recession.

 

http://www.nytimes.com/roomfordebate/2014/06/25/has-capitalism-become-incompatible-with-christianity/christian-principles-hold-steady-as-the-system-worsens?comments#permid=12125723

"Things might not be as bad as Thomas Piketty suggests, by the way."

In 2010 the U.S. had $56 trillion in individual wealth and today there is $82 trillion - enough for $1 million for every family of four. Unfortunately, this 46% increase in net wealth is limited to those at the top and occurred in spite of dismal economic growth. Those in the bottom 50% lost 70% of their net wealth between 1995 and 2010 and have not shared in the growth of wealth in the last four years.

The tax code produces a healthy market for stocks and bonds and an awful market for labor. It has been rigged by the 15.3% job killing payroll taxes and the $1.3 trillion in tax expenditures that redistribute 7.5% of GNP primarily to those with above average wealth.

Capitalism is good but markets, including those for labor, which are routinely distorted by a corrupt tax code have been a continual challenge to Christians and moral people regardless of faith.

 

http://www.nytimes.com/2014/06/29/magazine/whats-the-matter-with-eastern-kentucky.html?comments#permid=12124382

Pro Growth Tax Reform

Senator Paul is in favor of, “letting you keep more of your own money” but federal tax liability should not change with residence. To overcome poverty, we need a tax policy that adjusts for wealth (need) and encourages full employment at the same time.

The top priority should be replacement of the job killing payroll taxes with a new, revenue neutral tax base (VAT, wealth tax, etc.). Bill Gates spoke about this last March at the American Enterprise Institute. It is the best way for the government to encourage full employment and higher salaries; and will also provide a more stable funding source for Social Security and Medicare. By eliminating the combined 15.3% payroll taxes the economy gets an immediate boost, split between workers (who would receive a 7.65% increase in take home pay) and businesses that are able to avoid a 7.65% tax on each job.

Unfortunately, the poverty in Kentucky reflects the broader 70% reduction in the net wealth of the poorer half of the U.S. population since 1995. Those in debt and with insufficient wealth to cope with emergencies need a lower income tax rate to, “keep more of [their] own money”. Consider a 26% income tax rate that lowers to 8% for anyone that elects to pay a 2% net wealth tax (excluding $15,000 and $500,000 retirement savings). Most in the Kentucky counties would not have sufficient wealth to pay any wealth tax and their 8% income tax would be mostly paid by a 7.65% increase in take home pay.

 

http://www.nytimes.com/2014/06/10/upshot/minimum-wage.html?rref=upshot#permid=11984326

Payroll Tax Replacement is Better than Minimum Wage

The data suggests that half the workers affected by the proposed federal $10.10 minimum wage don't really need it. A third of the workers come from families with average family income and others, no doubt, from families with above average wealth. Should the government harm some struggling businesses and workers to help people who have $50,000 and no debts?

Mr. Bernstein omits mention of the estimated 500,000 people (one in thirty) who will lose their jobs to pay for the minimum wage according to the nonpartisan CBO. Government minimum wage requirements are an effective tax only on struggling businesses that now pay below the minimum wage. Minimum wage increases are paid for, at least in part, by firing some of the workers or otherwise reducing the number of jobs and/or reducing raises for mid-level (Republican leaning) workers. Established businesses that already pay above the minimum wage are not harmed and may in fact be helped by the economic harm inflicted on struggling competitors and by increasing the costs on new start up businesses.

The harm of the proposed federal minimum wage could be avoided by replacing the job killing payroll taxes with a VAT and/or net wealth tax. All workers would get an immediate 7.65% in take home pay and stimulate consumer spending and economic demand. Businesses would have 7.65% more to spend on workers and full employment (and the higher salaries that come with it) would be encouraged.

http://www.nytimes.com/2014/06/08/opinion/sunday/starting-out-behind.html?comments#permid=11976103

"Responsive Policy" Means Replacing Payroll Taxes

Microsoft founder Bill Gates knows that the best way for government to encourage jobs is by replacing the job killing payroll taxes. He said so during a discussion of contemporary economic issues at the American Enterprise Institute on March 13, 2014 hosted by Arthur Brooks. Full employment, and the higher salaries that come with it, are created by the double-barreled action of eliminating the 7.65% business tax on each worker and by giving each worker 7.65% additional take home pay to increase spending and economic demand.

Other publications, such as the conservative Washington Times, have editorialized in favor of a payroll tax replacement. Of course the Washington Times did not say what the replacement tax should be. Arthur Brooks suggested a (regressive) consumption tax along the lines of a national sales tax but there are much better tax bases that don't harm the poor and lower middle class.

Indeed, the New York Times has in the past favorably mentioned a value added tax (VAT) as part of tax reform. An elective wealth tax that significantly lowers the income tax rate to 8% for taxpayers that elect to pay 2% of their wealth might also complement a Piketty inspired trend in tax reform theory.

The New York Times Editorial Board should at least connect the dots. Support Bill Gates and declare that a payroll tax replacement is needed for the economy and for full employment. Young adults deserve more than underachievement.

http://douthat.blogs.nytimes.com/2014/06/06/family-friendly-tax-reform-and-the-poor/?comments#permid=11969125

It's the Payroll Taxes "Stupid"

The payroll taxes of 15.3% caused congress to pass the Earned Income Tax Credit (EITC) with bipartisan support. The EITC (and food stamps and the ACA) encourage people (via more benefits) to work less, not to marry and have children. The Lee modification gives more to higher earning families with children. It is a tweak which helps Republican leaning middle class families while leaving the regressive, job killing payroll taxes in place. (See Bill Gates speaking at AEI on March 13).

The Lee plan has good intentions because the poor and middle class are overtaxed; as least when net wealth is considered. The solution is first to create full employment and higher salaries by replacing the payroll taxes. A tax replacement could include a business VAT of 4% (the lowest in the world) an 8% C corporation rate. Tax equity would then be achieved by giving a low 8% individual income tax rate to any taxpayer that elects to pay a 2% tax on net wealth (excluding $15,000 cash and $500,000 in retirement funds). Most families would pay no wealth tax because most have net wealth below the exemption (i.e. $60,000 for a family of four). The tax blend produces more take home pay and the wealth tax returns would actually help taxpayers to be more frugal. They will vote for those that help their wealth grow.

http://www.nytimes.com/2014/06/05/upshot/growth-has-been-good-for-decades-so-why-hasnt-poverty-declined.html?rref=upshot#permid=11957710

Income and Wealth

Low income poverty is a function of the high rate of unemployment. Bill Gates, has said the government could encourage jobs by replacing the payroll taxes. Full employment and the higher salaries would come from eliminating the 7.65% tax on each worker and by increasing the take home pay and consumer spending of each worker by 7.65%.

The low family wealth comes not just from earning too little to save but also from overtaxing those with high debts and few assets. Family wealth must adjust over time to reflect the demands of raising children and retirement years later. Significantly, the word "equality" has no useful meaning when it comes to family wealth. We know that between 1995 and 2010 all growth in net wealth was confined to the top 10% of the population while the poorer half of the population gradually lost 70% of their net wealth. See http://www.taxnetwealth.com/01_The_Wealth_Gap.aspx.

The need to encourage the growth of family wealth over time combined with the need for a replacement to the payroll taxes points to a tax blend with low rates. A low 8% income tax (with no payroll taxes) could be paid by any taxpayer electing to pay 2% of their net wealth (excluding $15,000 cash and $500,000 retirement savings). Without a wealth tax, a flat 26% income tax rate could be standard (along with estate taxes when the time comes). An 8% C corporation rate and a 4% VAT (the lowest rate in the world) would replace lost revenue from the payroll taxes.

http://www.nytimes.com/2014/05/23/upshot/theres-no-such-thing-as-a-free-tax-cut.html?comments#permid=11865194

Tax Options

"they haven’t made progress on finding a way to pay for a tax cut in the first place"

The 120 page "Room to Grow" book does not consider the replacement of the job killing payroll taxes discussed by Bill Gates on March 13, 2014 at AEI with Arthur Brooks moderating the panel. This revenue neutral proposal would create full employment and encourage higher wages for all workers. Perhaps the idea is too conservative for the rank and file GOP officials that supported the effort.

"Room to Grow" also omits any mention of a wealth tax which has been made quite popular by Thomas Piketty, author of “Capital in the Twenty-First Century". It is important to understand that a conservative wealth tax can be optional as in giving a low income tax rate (i.e. 8%) to any taxpayer willing to pay a 2% net wealth tax (excluding $15,000 cash and $500,000 in retirement savings). I estimate that 98% of taxpayers would make that election if they could and they would vote for the party that made it possible.

It was also a bit of a surprise to find not even one mention of a value added tax (VAT) in "Room to Grow". An optional wealth tax may be a new idea but a VAT is considered the fairest way to apportion taxes among different types of businesses and across different taxing jurisdictions. It has been used for decades and has been adopted by every developed country in the world. A small VAT of 8% could replace the 15.3% job killing payroll taxes and help all voters - errr ... workers.

http://www.nytimes.com/2014/05/23/upshot/how-much-would-home-prices-fall-if-you-couldnt-deduct-mortgage-interest.html?comments&_r=0#permid=11861143:11867161

Big Mortgage: Tax My Wealth Please

Tax reform, including the elimination of the mortgage interest deduction, can take many forms. Imagine a system that gives a tax break equal to 2% of the outstanding mortgage principal (and a similar 2% for student loans, auto loans and credit card debt). Tax reform along these lines would help families get out of debt quicker and accumulate wealth earlier. Imagine if the tax reform also reduced the income tax burden on workers by eliminating the payroll taxes and lowering the regular income tax rate to a flat 8%. With the additional take-home and after tax pay young families would significantly grow their wealth just in time for retirement saving and child rearing needs.

The tax reform described above combines an optional 2% tax on net wealth (excluding $500,000 retirement funds) with a low 8% income tax rate. A 26% income tax could be paid by anyone who does not want to pay a wealth tax. It is easy to see that a wealth tax may be just the boost our housing sector needs.

Understand, that the key to tax reform is not just the elimination of a few tax expenditures but rather the elimination of all $1.3 trillion in tax expenditures that have kept out tax rates twice as high as would otherwise be necessary. Adding additional tax bases such as an elective wealth tax enables rates which are so low that tax expenditures are not needed.

[response]

Denise,

$500k comes to a million for a couple on top of social security and other pensions. Anyone of the top 10% who feel the need to save more can do so without expecting a tax subsidy from the 90% of taxpayers that are not so well off

http://douthat.blogs.nytimes.com/2014/05/22/must-conservatism-soak-the-poor/?_php=true&_type=blogs&_r=0#permid=11863276

Afraid of Payroll Replacement or Success

Ross Douthat summaries, "the consensus 'reform conservative' position on welfare policy: ... a reform of the safety net should concentrate on 1) increasing take-home pay for low-wage workers and 2) removing and minimizing perverse anti-work incentives created by current transfer programs."

The most, "perverse anti-work incentive" is the earned income tax credit which has been increased several times over the last 20 years. The EITC is needed because the combined 15.3% payroll taxes are too high. If we replaced the payroll taxes with a new tax base, the EITC would not be needed and both conservative objectives would be met: 1) 7.65% more take-home pay for all workers (without increasing the minimum wage) and no need for the perverse EITC anti-work incentive.

Bill Gates spoke at AEI on March 13 and said that government replacement of the payroll taxes would create lots of sustainable private sector jobs. Indeed, Arthur Brooks, President of AEI moderated the panel. A 1% wealth tax or an 8% VAT (or a combination) could replace the payroll tax revenue and create full employment and higher wages for all workers.

It is therefore a bit odd that the 120 page "Room to Grow" book supported by AEI did not even analyze the payroll tax replacement, a wealth tax (or optional wealth tax) or a VAT.

I regret that  E.J. Dionne may be right about the GOP being like a failing pizza company that is only willing to change the box but not the pizza.

ttp://www.nytimes.com/2014/05/22/upshot/united-nations-forecasts-persistently-high-unemployment-for-the-young.html?comments#permid=11852819

Political Incompetence

The dire predictions about high rates of unemployment are based on the assumed continued incompetence of government leaders.

The U.S. could create and maintain full employment and higher salaries without more government spending. The primary reform would be to replace the payroll taxes with either a 1% wealth tax or 8% VAT (or perhaps half of each new tax base). Even Bill Gates knows how the business tax on each job combined with the reduced take home pay and consumer spending destroys jobs (speaking at A.E.I. on March 13).

The U.S. could maintain full employment by allowing the $30 billion tax expenditures for charitable deductions to be used only with churches and public charities that agree to provide transitional jobs for the long term unemployed (at a little below private sector wages).

Full employment, higher salaries, reduced safety net spending, expanded charitable services, family security, better economy, and the list goes on for anyone with an open and willing mind.

http://douthat.blogs.nytimes.com/2014/05/19/to-lift-up-the-poor-must-we-soak-the-rich/?comments#permid=11840092

Wealth-Income

Ross Douthat wears the same set of blinders as Jared Bernstein when he surmises, “you can’t have any sort of uplift without some good old-fashioned soaking of the rich”. There are proposals to create full employment by replacing the payroll taxes and to allow an optional wealth tax for those who want low income tax rates.

Both NYT authors conflate Wealth-Income and display an historical narrow mindedness when it comes to reform. These experienced business writers feel confident because any omission on their part is widely shared. The presidential tax reform commissions under both Bush and Obama were constrained to consider only revenue neutral income tax reform that produced the same distribution of tax liability. This means no alternative tax bases like a VAT or wealth tax and no help for the poor and middle class whose burden must remain the same in the end. Both Douthat and Bernstein need to shout to the rooftop that revenue neutral is fine for tax reform but new tax bases and relief for those with below average wealth (and high debt) is essential.

Oversimplifying, if all individuals paid 8% of their income and 2% of their wealth (excluding $500,000 retirement savings) the young would grow modest wealth quickly and the old would have a nest egg when they need it. The rich are not "soaked" if asked to pay only the same rates as the poor.

Bill Gates has also stated that the the government could create jobs by replacement of the job killing payroll taxes.

http://www.nytimes.com/2014/05/20/upshot/to-lift-the-poor-you-cant-avoid-taxing-the-rich.html?comments&_r=0#permid=11839762

… and Now for Something New

Jared Bernstein refuses to consider new economic approaches when he speaks about methods of helping those at the bottom through: economic security [EITC], investment in future productivity [education] and “targeted job opportunities at decent wages”. The reason we have the Earned Income Tax Credit is because the payroll taxes are too high going from 6% in the 1960’s to 15.3% today. Bill Gates, a Democrat himself, spoke at AEI in March and said that replacing the payroll taxes with a different tax base would create jobs if that is what the government wanted to do. A 1% wealth tax or an 8% VAT (or half of each) would approximate a revenue neutral replacement and create full employment without increasing taxes or total spending (and with no change in Social Security or Medicare). Full employment also leads to higher salaries for all.

By reducing the cost of each job by 7.65% the outsourcing of U.S. jobs are discouraged. Perhaps more importantly, each worker gets a 7.65% increase in take home pay which will increase consumer spending and economic demand for sustainable job growth. In other words the payroll tax replacement helps all workers rather than just being a targeted benefit that can reduce the incentive to work for those that now understandably want to maximize government support with food stamps, health insurance and EITC.

Mr. Bernstein and his liberal associates need to learn that we do not have to “soak the rich” to help the poor.

http://www.nytimes.com/2014/05/18/business/the-case-against-the-bernanke-obama-financial-rescue.html?rref=upshot

Reduced family wealth had been a problem not just for those with underwater mortgages but also for about 90% of the population. The middle class lost 8% of their net wealth between 1995 and 2010 and the bottom half of the population was devastated by a 70% loss of wealth. See chart at http://www.taxnetwealth.com/01_The_Wealth_Gap.aspx.

Thomas Piketty has people thinking about family wealth and how the U.S. tax structure has, on average, concentrated all gains in wealth with the top 10%. Consumer spending at the bottom has dried up while luxury markets remain robust. Bill Gates (speaking at AEI) made it clear that payroll taxes have destroyed jobs and replacing the payroll taxes can create jobs. This leads to obvious questions about whether a wealth tax and/or perhaps a VAT could be used to create jobs, restore wealth and maintain a robust economy. Consider the 2-4-8 Tax Blend.

An American style wealth tax would help workers and be "optional". Consider a flat income tax rate of 26% (plus gift and estate taxes) or a taxpayer choice of paying a low 8% income tax rate (and no 7.65% payroll tax) combined with a 2% wealth tax (excluding $500,000 retirement savings and $15,000 cash). Ninety-nine percent of taxpayers would elect to pay the 2% wealth tax to take advantage of the 8% income tax rate and elimination of gift, estate and capital gains taxes. A complementary business tax reform would consist of an 8% C corporation rate and 4% VAT.

http://www.nytimes.com/2014/05/15/upshot/how-to-turn-renters-into-savers.html?comments#permid=11806401

Tax Wealth More and Income Less

Thomas Piketty has people thinking about a wealth tax. The tax rate (assume it is 2%) might be imposed on the total value of assets less the total value of debts. For example, the new owner(s) of a $200,000 house with a $160,000 mortgage would have a wealth tax applied to only $40,000 ($200,000 less $160,000) for a tax liability of $800. If the owner also has a student loan of $30,000 the net wealth computation comes to $10,000 for a wealth tax liability of just $200. The important point is that most young families starting out would not have to worry much about wealth taxes. The government tax structure should not hold them back.

Imagine the same family in their 30's with a middle class income of $60,000 that is taxed at about 25% (when 15.3% combined payroll taxes are included). A young child may require one parent to work part time and saving for retirement may be minimal if at all. Net wealth might have grown to $80,000 given a reduction in the mortgage, student loans and appreciation in the housing value. A 2% wealth tax on $80,000 would come to $1,600 and begin to represent a small burden on this struggling middle class family. If there were no payroll taxes and the income tax rate was only 8% of gross wages ($4,800 instead of $15,000) than the wealth tax would not be a burden and significant retirement savings would be encouraged (especially if there was a wealth tax exemption for the first $500,000 per person in retirement savings).

http://www.nytimes.com/2014/05/15/opinion/kristof-its-now-the-canadian-dream.html?comments#permid=11805263

Face It: Payroll Taxes Have Destroyed U.S. Jobs

Professor Blinder panders for Republican congressional votes when he recommends business credits as a means of creating jobs - only some of which will be kept when the credits are gone. This mentality of paying business to do business is why the tax code has ballooned to $1.3 trillion in tax expenditures. The tax rates for everyone are twice what the need to be. Overtaxing workers has also reduced consumer spending and the economic demand that new jobs depend on.

The good news is that people like Bill Gates (speaking at AEI on March 13) have a simple job creation solution. Congress needs to permanently replace the combined 15.3% payroll taxes with a new tax base. A 1% wealth tax or an 8% VAT (or a combination) would generate sufficient revenue to insure financial security for both Social Security and Medicare for many decades.

The payroll tax replacement works by discouraging outsourcing and making every U.S. job 7.65% less expensive and giving every worker 7.65% more in take home pay. As workers spend more new jobs are added to meet the consumer demand. As the unemployment rates go down salaries go up and that leads to more consumer spending and sustained economic growth.

Unfortunately, there is not enough partisan advantage for the reform to be championed by either the Republicans or the Democrats.

http://www.nytimes.com/2014/05/14/opinion/edsall-thomas-piketty-and-his-critics.html?comments#permid=11797836

Divide and Conquer

Thomas Piketty has not considered an "optional" wealth tax (which does not require a constitutional amendment for the apportionment issue). It is the reduced share of wealth at the bottom that causes more trouble than the growing concentrations at the top. Half the families in the U.S. lost a staggering 70% of their net wealth between 1995 and 2010 while all profits on average were confined to the top 10%.

But what taxpayer (in their right mind) would want to pay a wealth tax?

In fact, most taxpayers would choose to pay a 2% tax on net wealth (excluding $500,000 retirement savings and $15,000 cash per taxpayer) if their income tax rate were lowered to a flat 8% (with no payroll tax). The standard no-wealth-tax alternative would be a flat 26% income rate (plus estate taxes when the time comes). A complementary business tax of 8% (for C corporations) and a 4% VAT would complete the 2-4-8 Tax Blend and produce as much tax revenue (or a bit more) than the current income-only system. [Note that the 2-4-8 Tax Blend was originally scored based on 2010 data of $53 trillion in individual wealth and current individual wealth just four years later is about $82 trillion].

An "optional" wealth tax permits wealth concentrations at the top while spreading growth to the bottom 99% through (wealth adjusted) tax liability. It is politically feasible because it divides the most powerful. Is it unfair to expect the wealthy to pay the same rates as the poor?

http://www.ucanews.com/news/pope-francis-urges-global-redistribution-of-wealth/70902

Mr. Piketty has made headlines for "soak the rich" style tax proposals for progressive (escalating rate) wealth taxes on top of progressive rate income taxes and progressive rate inheritance taxes. Americans like Bill Gates have shown greater concern for workers at the bottom. Labor is overtaxed and underpaid as a result of the 15.3% payroll taxes and the high rate of unemployment and low salaries that it causes.

If individual taxpayers had a choice of paying a flat 26% income tax rate (plus estate and gift taxes) or a low 8% income tax rate combined with a 2% tax on net wealth (excluding $15,000 cash and $500,000 in retirement, and no payroll taxes) the lost wealth at the bottom, full employment and a robust economy would be restored. See TaxNetWealth.com for more details on the 2-4-8 Tax Blend.

Pope Francis is not endorsing any particular political solution. He simply wants to make sure that the world understands that the growing wealth gap is the economic "climate change" issue of the century. Half the U.S. population lost 70% of their wealth between 1995 and 2010 resulting in a decline of marriage and procreation. Worldwide numbers are similar.

http://www.oregonlive.com/opinion/index.ssf/2014/05/pikettys_idea_of_a_wealth_tax.html

Mr. Piketty has made headlines for "soak the rich" style tax proposals for progressive (escalating rate) wealth taxes on top of progressive rate income taxes and progressive rate inheritance taxes. Americans like Bill Gates have shown greater concern for workers at the bottom. Labor is overtaxed and underpaid as a result of the 15.3% payroll taxes and the high rate of unemployment and low salaries that it causes.

If individual taxpayers had a choice of paying a flat 26% income tax rate (plus estate and gift taxes) or a low 8% income tax rate combined with a 2% tax on net wealth (excluding $15,000 cash and $500,000 in retirement, and no payroll taxes) the lost wealth at the bottom, full employment and a robust economy would be restored. See TaxNetWealth.com for more details on the 2-4-8 Tax Blend.

http://www.pbs.org/newshour/making-sense/inequality-will-worsen-in-america-unless-pikettys-rx/

Uniting the 99 Percent

This was a good interview with Thomas Piketty but I wish he could have been questioned about an "optional" wealth tax. The growth of wealth for the top 10% would not be so harmful if there was strong growth for the bottom 90%.

Consider a flat income tax rate of 26% (plus gift and estate taxes) or a taxpayer choice of paying a low 8% income tax rate (and no 7.65% payroll tax) combined with a 2% wealth tax (excluding $500,000 retirement savings and $15,000 cash). Ninety-nine percent of taxpayers would elect to pay the 2% wealth tax to take advantage of the 8% income tax rate and elimination of gift, estate and capital gains taxes.

A complementary business tax reform would consist of an 8% C corporation rate and 4% VAT. As a bonus, the replacement of payroll taxes would also create full employment, higher wages and a robust economy. I remain available to assist Mr. Piketty with his sequel to "Capital". Perhaps we can call it, "Uniting the 99 Percent".

http://www.nytimes.com/2014/05/09/upshot/obamas-top-economist-has-some-problems-with-pikettys-book.html?comments#permid=11756412

Can Wealth be Taxed as an Option

Mr. Furman and Mr. Piketty have their eye on the money at the top and, like most economists, ignore the shrinking net wealth of those at the bottom. Between 1995 and 2010 the top 10% of the population increased their share of wealth from 67.8% of the assets to 74.5%. The concentration of wealth was made possible by a gradual 70% loss of net wealth by the poorer half of the population over just 15 years. It is hard to believe that half the population has been so rapidly reduced to only 1.1% of the net wealth. The wealth survey data for 2013 should be available soon and will likely show how Obama's policies have increased the gap.

Mr. Piketty has made headlines for "soak the rich" style tax proposals for progressive (as in escalating rate) wealth taxes on top of progressive rate income taxes and progressive rate inheritance taxes. Americans like Bill Gates have shown greater concern for workers at the bottom. Labor is overtaxed and underpaid as a result of the 15.3% payroll taxes and the high rate of unemployment and low salaries that it causes.

If individual taxpayers had a choice of paying a flat 26% income tax rate (plus estate and gift taxes) or a low 8% income tax rate combined with a 2% tax on net wealth (excluding $15,000 cash and $500,000 in retirement, and no payroll taxes) the lost wealth at the bottom, full employment and a robust economy would be restored. See TaxNetWealth.com for more details on the 2-4-8 Tax Blend.

http://www.nytimes.com/2014/05/06/upshot/should-berkshire-hathaway-be-broken-up.html?comments#permid=11749553

Mr. Buffett is the poster child for an American net wealth tax that would give people the option of paying a 2% net wealth tax or an additional 18% income tax rate. He more than anyone else has championed tax rates for the wealthy that are no less than the middle class.

Consider an option to pay a 2% net wealth tax (excluding $15,000 cash and $500,000 retirement savings) combined with an 8% income tax and no payroll, capital gains, inheritance or gift taxes. It would leave more money for most taxpayers. Nevertheless even the very rich could be allowed to pay a flat 26% of gross income (and make up any shortfall with estate taxes later). Complementary business tax reform would consist of an 8% C corporation rate combined with a 4% VAT.

Allowing workers and families to accumulate more wealth and increase disposable income should be the long range focus of tax reform. The wealthy will do just fine with a growing economy.

http://www.futureofcapitalism.com/comments/7552

Let the Rich Pay the Same Tax Rate as the Poor

Prof. Epstein writes that concentrations of capital in a democratic society are deeply vulnerable "as evidenced by the strongly progressive income tax rates and estate tax rates". His evidence of progressive tax rates is odd since we could establish the same low rates for rich and poor and the rich would still complain.

Consider an option to pay a 2% net wealth tax (excluding $15,000 cash and $500,000 retirement savings) combined with an 8% income tax and no payroll, capital gains, inheritance or gift taxes. It would leave more money for most taxpayers outside the top one or two percent who have always managed to pay far less than the poor by avoiding tax on unrealized capital gains and similar forms of economic income.

The very rich would likely complain about paying the same rates as the poor. They could actually be allowed to avoid the wealth tax if they elected to pay a flat 26% of gross income (and make up any shortfall with estate taxes later).

Complementary business tax reform would consist of an 8% C corporation rate combined with a 4% VAT.

Allowing workers and families to accumulate more wealth and increase disposable income should be the long range focus. Creating full employment by eliminating the payroll taxes would be a welcome bonus. Read more about the 2-4-8 Tax Blend at TaxNetWealth.com

http://www.nytimes.com/2014/05/05/opinion/a-better-economy-still-far-from-good.html?comments#permid=11727949

Reduce Taxes on Jobs

The Democratic agenda has a negative effect on jobs: ACA (2,000,000 full time job equivalents), minimum wage (500,000 job loss) and immigration reform (millions more). The Republicans support unemployment but not extended benefits. Transitional jobs for the long term unemployed with nonprofits are a potential bipartisan solution.

Other news media have reported about Bill Gates's assessment (on March 13, 2014 at AEI) that a replacement of the payroll taxes will create a lot of jobs. Alternative tax replacements include an 8% VAT, 2% net wealth tax or elimination of almost $1.3 trillion in nonessential tax expenditures - any one of which would produce hundreds of billions of dollars more than necessary to fully fund Social Security and Medicare. A blend of new tax bases would be best because it enables the mathematically lowest possible tax rate for each base. Tax expenditures (including "prebates") are not needed when tax rates are very low.

Thomas Piketty, author of “Capital in the Twenty-First Century" has warned about the danger of trends reducing net wealth at the bottom. In the U.S. the income measure of poverty has reached 15% but a much larger group is suffering because the share of net wealth available to 50% of the population is now just 1% of the nation's assets. If we stop overtaxing jobs and workers we will create full employment and begin to reverse the dangerous gap in wealth that has finally caught the attention of policy makers.

http://www.nytimes.com/2014/05/04/opinion/sunday/bruni-america-the-shrunken.html?comments#permid=11722718

Full Employment Via Tax Reform

The American dream is widely shared by the top 10% of the population which owns 75% of the net wealth (a little over $1,000,000 per capita). This group is able to get most of the $1.3 trillion in tax expenditures because congress imposes payroll taxes on workers. A replacement of the payroll taxes (without any change to Social Security or Medicaid) would create full employment and higher wages (per Bill Gates speaking at AEI). Thus the American dream of a decent job simply requires agreement on how to replace the payroll taxes.

The payroll taxes (with a few hundred billion to spare) could be replaced by: 1) the elimination of tax expenditures, 2) an 8% value added tax (VAT) or 3) a 2% tax on net wealth. [The payroll taxes can't be replaced by the individual or C corporation income tax because they are really part of the income tax]. A combination of tax bases (tax blend) is the only way to keep rates extremely low and eliminate any need for tax expenditures (credits, deductions, deferrals, special rates and exemptions). The 2-4-8 Tax Blend is described at TaxNetWealth.com.

If you think the American dream can be restored without full employment via tax reform, you're still dreaming.

http://douthat.blogs.nytimes.com/2014/05/01/donald-sterling-and-the-inequality-debate/?comments#permid=11709427

New York State is the most segregated state in the country not because of a refusal "to rezone rich cities". It is due to segregation and single family zoning in the suburbs. Location matters more than liberal platitudes.

Raising the minimum wage is good for established companies  because it hurts their competitors without hurting them. The struggling competitors will have to lay off workers or go out of business. The CBO estimates a job loss of 500,000 if the federal minimum wage goes through.

Zoning and the minimum wage help some while harming others. The Piketty suggestion for a net wealth tax, if implemented properly, would harm no one and help all. Of course a soak the rich progressive wealth tax on top of a progressive income tax and progressive estate taxes with low wage workers still being over taxed will not help the economy.

Consider an option to pay a 2% net wealth tax (excluding $15,000 cash and $500,000 retirement savings) combined with an 8% income tax and no payroll, capital gains, inheritance or gift taxes. It would leave more money for most taxpayers. Nevertheless even the very rich could be allowed to pay a flat 26% of gross income (and make up any shortfall with estate taxes later). Complementary business tax reform would consist of an 8% C corporation rate combined with a 4% VAT.

Allowing workers and families to accumulate more wealth and increase disposable income should be the long range focus. The wealthy will do just fine with a growing economy.

http://www.nytimes.com/2014/04/30/upshot/radical-solution-to-challenge-of-corporate-taxes.html?comments#permid=11681351

Wishful Thinking

We need business tax reform not just C corporation tax reform. The reform can and should create full employment.

The details are not too complicated. Simply impose a 4% VAT, an 8% C corporation income tax rate and eliminate the payroll taxes. Tax expenditures are not needed with low rates and business revenue would increase.

An individual 8% income tax would also be available for individuals and pass-through businesses that elected to pay a 2% net wealth tax. This would tend to equalize the rates for all types of businesses. The net wealth tax could even be optional for individuals that were will to pay a higher 26% income tax rate and estate taxes later.

The solutions from AEI fail to encourage full employment and simply don't generate sufficient revenue. They also increase the gap between the pass-through businesses and the C corporations - (which have harmed U.S. workers the most).

http://blogs.marketwatch.com/capitolreport/2014/04/23/amazon-top-seller-on-global-wealth-inequality-draws-conservatives-counterfire/

An Optional Wealth Tax for America

There is an American version of a net wealth tax which would simply be an option to the income tax.

Consider an option to pay a 2% net wealth tax (excluding $15,000 cash and $500,000 retirement savings) combined with an 8% income tax and no payroll, capital gains, inheritance or gift taxes. It would be a very good deal for all but a few ultra wealthy. Without electing to pay a wealth tax a taxpayer would be allowed to pay a flat 26% of income and estate taxes later.

Complementary business tax reform would be an 8% C corporation rate combined with a 4% VAT. Tax expenditures are not needed with low rates. $2 trillion in foreign profits would be repatriated.

The elimination of payroll taxes would also create full employment as Bill Gates said last month at the AEI. Full employment and higher take-home pay without a penny more in taxes or spending. It is something worth considering. It is called the 2-4-8 Tax Plan and described at TaxNetWealth.com.

http://blogs.reuters.com/felix-salmon/2014/04/25/the-piketty-pessimist/?wpisrc=nl_wonk

A capital (net wealth) tax can take many forms. The best lowers taxes on the poor and middle class without soaking the rich - because it is optional. Piketty had never considered this option but the trendy Davos crowd should.

Consider a U.S. option to pay a 2% net wealth tax (excluding $15,000 cash and $500,000 retirement savings) combined with an 8% income tax and no payroll, capital gains, inheritance or gift taxes. It would be a very good deal for all but a few ultra wealthy but they should be allowed to pay a flat 26% of income and estate taxes later if they feel the rates of the poor and middle class would be too much.

The best business tax reform would be an 8% C corporation rate combined with a 4% VAT. Tax expenditures are not needed with low rates. Deferrals on the repatriation of $2 trillion in foreign profits would end with the 8% rate.

The elimination of payroll taxes would also create full employment as Bill Gates said last month at the AEI. Full employment and not a penny more in taxes or spending - something worth considering. It is called the 2-4-8 Tax Plan.

http://www.bloomberg.com/video/jeff-sachs-why-we-need-a-wealth-tax-J3QmS32RSS~QgK5SJNDUQA.html

Good presentation by Mr.Sachs. Keep in mind that there are different types of net wealth taxes and none are intended for C corporations.

Consider the option to pay a 2% net wealth tax (excluding $15,000 cash and $500,000 retirement savings) combined with an 8% income tax and no payroll, capital gains, inheritance or gift taxes. It would be a very good deal for all but a few ultra wealthy but they should be allowed to pay a flat 26% of income and estate taxes later if they feel the rates of the poor and middle class would be too much.

The best business tax reform would be an 8% C corporation rate combined with a 4% VAT. Tax expenditures and deferrals would not be needed. The elimination of payroll taxes would also create full employment as Bill Gates said last month.

http://thefederalist.com/2014/04/23/why-inequality-doesnt-matter/

Right now the income tax rates are $1.3 trillion higher than necessary for everyone so that a few can take advantage of credits, deductions, special rates, deferrals and exemptions. The conservative idea is that the government should help families get out of debt and save a little money for emergencies and retirement but the government should not expect below average taxpayers to subsidize those with above average income and wealth. Conversely, those at the top should be helping those at the bottom - period.

Consider the option to pay a 2% net wealth tax (excluding $15,000 cash and $500,000 retirement savings) combined with an 8% income tax and no payroll, capital gains, inheritance or gift taxes. It would be a very good deal for all but a few ultra wealthy but they should be allowed to pay a flat 26% of income and estate taxes later if they feel the rates of the poor and middle class would be too much.

http://douthat.blogs.nytimes.com/2014/04/25/piketty-and-the-petits-rentiers/?comments#permid=11658516

Liberal or Conservative:

An 8% Income Tax with Optional 2% Net Wealth Tax

Consideration of wealth in public spending and tax policy enables means tested programs like Food Stamps and housing assistance to help those with real needs. After all, Congress does not want to give food stamps to a family that might have inherited $10,000 or $15,000. There is also no logical reason why Congress should want to give money to anyone that does not need it and this includes the $1.3 trillion in annual tax expenditures (which congress plans to extend this week). Right now the income tax rates are $1.3 trillion higher than necessary for everyone so that a few can take advantage of credits, deductions, special rates, deferrals and exemptions. The conservative idea is that the government should help families get out of debt and save a little money for emergencies and retirement but the government should not expect below average taxpayers to subsidize those with above average income and wealth. Conversely, those at the top should be helping those at the bottom - period.

Consider the option to pay a 2% net wealth tax (excluding $15,000 cash and $500,000 retirement savings) combined with an 8% income tax and no payroll, capital gains, inheritance or gift taxes. It would be a very good deal for all but a few ultra wealthy but they should be allowed to pay a flat 26% of income and estate taxes later if they feel the rates of the poor and middle class would be too much.

http://www.futureofcapitalism.com/comments/7543

The wealth gap today has grown to reflect the distribution just before the Great Depression. It is one thing to examine the large 75% of net wealth held by the top 10% of the population or the dwindling 24% share held by the next 40% (the middle class). The real story is in the 1% of net wealth shared by half the population - a reduction of 70% since 1995 in the U.S. Most of these people can't afford to procreate and we simply don't need any more college educated restaurant staff.

The destruction of marriage and the middle class has given political control to the Democrats.

We can begin to rebuild by replacing the job killing payroll taxes with a VAT to create full employment. An optional 2% net wealth tax for anyone who wants to pay an 8% income tax would put the economy in high gear.

http://www.nytimes.com/2014/04/23/upshot/back-story-how-we-found-the-income-data.html?comments#permid=11622283

Mr. Piketty has done a good job explaining the limitations of the gini and successfully compares the top 10%, next 40% (middle class) and bottom 50% in terms of income and wealth. The more difficult trick is attempting to show the data, and change in data over time, in a single graph. See http://www.taxnetwealth.com/01_The_Wealth_Gap.aspx for U.S. data since 1995.

The Upshot needs to tell the story in ways that will finally lead to political change. Good luck.

http://www.nytimes.com/2014/04/23/upshot/the-american-middle-class-is-no-longer-the-worlds-richest.html?comments#permid=11621768:11624742

Rebuild

The article may give some momentum to bold tax reform. Revenue neutral is fine but distributional neutrality must end to rebuild the middle class. Bill Gates said last month that the payroll taxes need to be replaced to create jobs. Thomas Piketty, author of “Capital in the Twenty-First Century" (the economic book of the decade) believes we need a capital (net wealth) tax to slow and perhaps reverse the 70% loss of net wealth to the poorer half of the country since 1995. Conservatives like Rep. Paul Ryan are willing to consider new tax bases such as a VAT - (considered the fairest business tax by every developed country in the world). Pope Francis has challenged all governments to reverse the Economy of Exclusion that prevents too many from obtaining a life (and family) supporting share of wealth and work.

Consider:

Individual Tax Reform: 8% income tax combined with 2% net wealth (excluding $15,000 cash and $500,000 retirement) or a choice of 26% income tax (plus estate, gift and capital gains taxes).

Business Tax Reform: 8% income tax for C corporations and 4.% VAT (and no payroll taxes). This will repatriate $2 trillion in foreign profits and reduce welfare by creating full employment.

An optional net wealth tax is more politically feasible than "soak the rich" alternatives. The use of several tax bases enables the lowest rates and eliminates any need for $1.3 trillion in tax expenditures that have caused more harm than good to 90% of the population.

http://www.washingtonpost.com/opinions/robert-j-samuelson-class-warfare-justified/2014/04/20/0fe43ae0-c730-11e3-8b9a-8e0977a24aeb_allComments.html?ctab=all_&

An End to Class Warfare With an Optional Wealth Tax

Economist, Thomas Piketty has authored a great book but it is not, "a powerful intellectual justification for attacking the super-rich". History suggests that it is a powerful intellectual justification for saving the super-rich by saving the poor from more harm and expanding the middle class.

In the U.S. the top 10% have amassed 75% of the net wealth and permitted the next 40% (the middle class) to keep 24%. Those of you who are quick at math are shaking their heads at the impossibility of 50% of the population being relegated to just 1% of the net wealth. A wealth gap to this extent has not happened since the days leading to the Great Depression and that is why a reoccurrence is of concern to high wealth individuals.

Piketty has made a name for himself (and is selling a few books) recommending an admittedly "utopian" global net wealth tax. Unfortunately, when it comes to policy Piketty suffers from the French "soak the rich" mentality that seeks to impose a progressive and escalating net wealth tax on top of a progressive and escalating income tax (and keep a whopping inheritance tax for good measure).

Piketty is right about some type of capital (net wealth) tax but has not considered forms of the tax that would most help the poor and middle class. Consider:

Individual Tax Reform: 8% income tax combined with 2% net wealth (excluding $15,000 cash and $500,000 retirement) or a choice of 26% income tax (plus estate, gift and capital gains taxes).

Business Tax Reform: 8% income tax for C corporations and 4.% VAT (and no payroll taxes). This will repatriate $2 trillion in foreign profits and reduce welfare by creating full employment.

An optional net wealth tax can help all and is more politically feasible than the "soak the rich" alternative.

http://www.nytimes.com/2014/04/20/opinion/sunday/douthat-marx-rises-again.html?comments&_r=0#permid=11607730

A Conservative's Wealth Tax

There is nothing wrong with capitalism that an optional wealth tax couldn't fix. In the area of tax reform Ross Douthat should not be timid about his economic credentials. He needs to read both “Capital in the Twenty-First Century" by Thomas Piketty and the "Joy of the Gospels" by Pope Francis which describes the Economy of Exclusion and calls for economic reforms.

Capitalism is efficient and productive. Trickle down theories spread the wealth for those in the top 10% and work fine for the middle class with jobs. Trickle down has never worked for the poorer half of the population. See http://www.taxnetwealth.com/01_The_Wealth_Gap.aspx. Piketty has added an historical perspective and demonstrated that concentration in wealth, more than earned income, was the key factor leading to the Great Depression (and could repeat). Half the population are now excluded from sufficient wealth and work opportunities to the point where the religious vocation of marriage and procreation are too often out of the question. Consider:

Individual Tax Reform: 8% income tax combined with 2% net wealth (excluding $15,000 cash and $500,000 retirement) or a choice of 26% income tax (plus estate, gift and capital gains taxes).

Business Tax Reform: 8% income tax for C corporations and 4.% VAT (and no payroll taxes). This will repatriate $2 trillion in foreign profits and reduce welfare by creating full employment.

An optional net wealth tax can help all.

http://www.huffingtonpost.com/2014/04/14/the-highly-compelling-cas_n_5145749.html

An Optional Net Wealth Tax Does Not Need Apportionment.

Without raising or lowering total tax revenue we can create full employment by replacing the payroll taxes with a 4% VAT and optional 2% net wealth tax (excluding $15,000 cash and $500,000 in retirement funds). The wealth tax could be optional for those who want a low 8% income tax rate as opposed to a flat 26% income tax rate. This revenue neutral reform would reverse the overtaxing of low income and low wealth families and give the wealthy the option of paying the same low tax rates as the poor or avoiding the net wealth tax.

Individuals like Rep. Paul Ryan and Bill O'Reilly have supported a VAT, Gov. Perry likes optional flat income tax plans and Bill Gates said just last month that replacing the payroll taxes would create jobs. The EITC is not needed without the payroll taxes. The revenue would also permit the C corporation rate to be reduced to 8% and repatriate about $2 trillion for U.S. investment in jobs that would be 7.65% less expensive.

A optional U.S. net wealth tax can help the economy grow, help the wealthy and help workers at the same time. Read more at TaxNetWealth.com

http://economix.blogs.nytimes.com/2014/04/15/on-tax-day-whats-fair/?comments#permid=11574560:11579543

Tax Shares [Are Not] Broadly Fair

A review of the table at http://ctj.org/ctjreports/2014/04/who_pays_taxes_in_america_in_2014.php#.U02M6vldV8E

shows that the low income persons pay the highest percentage of state and local taxes and this is extremely regressive. The data in the chart included with the article also excludes economic income such as unrealized capital gains. If this were included the true regressive nature of the federal tax system would not be hidden.

By considering a truly fair tax reform based on 8% of income and 2% of net wealth (excluding $15,000 cash and $500,000 retirement savings) the gross unfairness of the U.S. tax system can be seen. The payroll taxes would not be needed with the additional revenue from a net wealth tax. Would the high earners be willing to pay the same low tax rates as the poor or would that be too fair?

The Washington think tanks on both the right and the left have been afraid to give a wealth tax (or optional wealth tax) a fair hearing. They are afraid to push for a replacement to the job killing payroll taxes. They are all resigned to supporting an extension of tax expenditures that have expired and every economist in Washington should be ashamed. At least Bill Gates made it clear that full U.S. employment requires a payroll tax replacement and Thomas Piketty, author of the economic book of the decade, "Capital in the Twenty-First Century" said a tax on capital (net wealth) is needed.

http://economix.blogs.nytimes.com/2014/04/14/equal-opportunity-and-social-innovation-obamas-policy-agenda/?comments#permid=11564617

Wealth Trends are Like Global Warming

President Obama delivered his best ever economic speech last December, "millions of families were stripped of whatever cushion they had left", "the top 1 percent has a net worth 288 times higher than the typical family", "gaps [in all social welfare measures] are now as much about growing up rich or poor as they are about anything else". The importance of family wealth in addition to earnings from work on the ability to support a family has been put in historical perspective by Thomas Piketty, in his new book “Capital in the Twenty-First Century". Piketty believes that a wealth tax and inheritance taxes can stop the imbalance. Just 10% of the U.S. population has 75% of the wealth and the poorer half living with only 1%.

Wealth concentration is on a magnitude with global warming and requires substantial tax reform rather than isolated social programs. For example, expansion of the Earned Income Tax Credit would not be needed congress followed the advice of Bill Gates to replace payroll taxes which tax each job and overtax the working poor. Full employment can be maintained if the $30 billion charitable deduction were limited to donations to those charities that agree to create transitional jobs for the long term unemployed. A fairer individual tax policy would give all taxpayers a choice of paying either a 26% income tax rate or an 8% rate combined with a 2% tax on net wealth (excluding $15,000 cash and $500,000 in retirement funds).

http://www.nytimes.com/2014/04/13/opinion/sunday/recovery-for-whom.html?comments&_r=0#permid=11559094

Let the Wealthy Pay the Taxes

Many do not understand that the stock market and the economy can grow while most of the population does worse and millions are effectively excluded from the resources needed to support a family. The majority wrongly believe that income trickles down to most but the share of income going to workers has decreased for decades while the share of wealth going to owners has skyrocketed. Wealth creates a permanent income stream for the top 10 percent that own 75% of the net wealth and none of the family members and their decedents ever have to work for necessities. This is why Thomas Piketty, author of “Capital in the Twenty-First Century" has caused such a stir in the world economic community with his recent call for a global progressive tax on capital (net wealth) on top of a progressive tax on income.

A less utopian tax on net wealth might assume a flat 26% income tax rate with the option to pay a lower 8% income tax rate when combined with a 2% tax on net wealth (excluding $15,000 cash and $500,000 retirement savings). The C corporation tax rate could also be reduced to 8% with a 4% VAT. The combined revenue would be more than sufficient to replace the payroll taxes which Bill Gates said is needed to create jobs an boost worker take-home pay. Economic mobility and family wealth can be restored. The Millennials can yet be saved if they marshal the independent political will to demand a fair share of both work and wealth.

http://www.futureofcapitalism.com/2014/04/flat-tax-or-fair-tax

The high 23% Fair Tax is a mixture of good and bad. The Fair Tax includes a prebate - a handout to low income families intended to offset the regressive nature of the tax. Unfortunately, there is nothing to stop people from keeping the prebate and avoiding the high tax rate by purchasing used items from clothing to furniture and everything in between. This legal tax avoidance will reduce the demand for new goods, slow the economy and require an increase in the initial 23% tax rate. At least the wealthy will be able to sell their used items rather than discarding or donating them.

The claimed concern for, "a European-style value-added tax that exists not as a substitute for the existing income tax system, but as an ever-increasing addition to it" does not explain why every developed country in the world considers a VAT to be the fairest business tax ever invented. A VAT is a business income tax on gross sales that permits a credit for VAT taxes paid by other businesses in the chain of production and distribution but does not allow other income deductions, deferrals, exemptions or special rates (which is why it is fair). In practice, a VAT is a very good substitute for some but not all income tax revenue because it must be paid by business owners rather than low income families.

The optional 19% Flat Tax is very good for high earners who will be able to lower their taxes but does nothing for low income families who have suffered the most since the 1970s. Workers have been overtaxed with the 15.3% payroll taxes on top of the income tax. Even Bill Gates agrees (March 13 at AEI) that we need to eliminate the payroll taxes to create full employment and raise wages for all. The tax code has caused the poorer half of the U.S. population to lose 70% of their net wealth between 1995 and 2010 and the trend continues. Low wealth individuals cannot support families and are pressured to take lower paying jobs with stagnating wages.

Only a blend of taxes can produce very low tax rates. The 2-4-8 Tax Blend maintains only the best tax reform features with the same flat rates for rich and poor. Consider a flat 8% income tax rate combined with an option to pay either a 2% of net wealth tax (excluding $15,000 cash and $500,000 in retirement savings) or paying an additional 18% on income. (Note that the 15.3% combined payroll taxes would be eliminated). If it takes more than a few moments to approximate your taxes and select an option you are either slow at math or in the top 10% of wealth holders.

A low 4% VAT and 8% C corporation rate would complete the essential business tax reform and even the tax liability for pass through businesses and large publically traded companies.

http://updatedpriors.blogspot.com/2014/03/capital-in-partial-equilibrium.html?showComment=1396978755393#c3515598797947847686

Consider An "Optional" Net Wealth Tax

The Piketty diagnosis sounds like the "Economy of Exclusion" described by Pope Francis a few months back. The trickle-down economic theories and global markets work to concentrate wealth at the top as they become more efficient. This growing concentration has left more and more people excluded from work and a share of wealth needed to support family life.

Piketty’s version of a wealth tax is extreme because it is global (said to be needed to prevent wealth from leaving the country) and has a progressive rate structure (for no necessary reason). His design may reflect problems with the implementation of a "soak the rich" style wealth tax in France.

A global wealth tax is not needed because the U.S. has maintained a worldwide tax jurisdiction and already requires that overseas assets be reported to the Treasury under penalty of a felony. Consider the same rates for rich and poor – 8% on income, no payroll taxes and 2% on net wealth (excluding $15,000 cash and $500,000 in retirement savings). Even C corporations could be taxed at a flat 8% with a 4% VAT - (considered the fairest way to apportion taxes among businesses worldwide).

For individuals who want to avoid a 2% net wealth tax, there would be nothing wrong with an optional flat 26% income tax rate (and capital taxes on gains, gifts and estate taxes later). An optional net wealth tax paired with very low income tax rates is, at least, politically cognizable. According to Bill Gates (speaking at AEI on March 13, 2014) the elimination of payroll taxes is also the best way to encourage full employment.

http://www.washingtonpost.com/opinions/george-f-will-ron-wydens-uphill-push-for-tax-reform/2014/04/04/6954105a-bb5a-11e3-9c3c-311301e2167d_allComments.html?ctab=all_&wp_login_redirect=0

Tax Reform: Stop the Bad, Combine the Good

Both parties deserve condemnation for the planned borrowing to extend $90 billion in tax extenders. At the very least, the expired tax expenditures should be removed from the tax code and converted to spending programs that can be reviewed each year with the budget.

Real tax reform will require new tax bases. The national sales tax (the FairTax) is attractive but the planned rate is so high it will cause millions of consumers to purchase used items to avoid the tax. This will decrease demand for new goods and hurt the economy. The "prebate" to help the poor is just one more form of welfare which is not needed with better tax reforms that use a VAT and/or optional net wealth tax.

An optional net wealth tax could be the solution that has remained elusive. Consider a low 8% income tax rate (and no payroll taxes) for those willing to pay 2% of their net wealth (excluding $15,000 cash and $500,000 in retirement funds). Both workers and pass through business owners could kept 92% of their earnings. An flat 26% income tax rate (plus capital taxes on gains, gifts and estates) could be paid by the handful of taxpayers who might choose not to pay net wealth taxes. A 4% VAT on business would also enable an 8% C corporation income tax rate.

For what it's worth, the greatest economist of the decade. Thomas Piketty, author of “Capital in the Twenty-First Century" has recommended a net wealth tax. The greatest business person, Bill Gates, has recommended the elimination of payroll taxes to create full employment (March 13, 2014 at AEI). The greatest budget expert, Rep. Paul Ryan, has recommended using a VAT to reduce C corporation taxes. See TaxNetWealth.com for more information.

http://www.nationalreview.com/agenda/374380/thomas-pikettys-wealth-tax-proposal-has-huge-problems-james-wetzler

An Optional Wealth Tax is Better for All

Piketty’s version of a wealth tax is extreme because it is global and has a progressive rate structure (for no necessary reason). His design may reflect problems with the implementation of a "soak the rich" style wealth tax in France. A global wealth tax is not needed because the U.S. has maintained a worldwide tax jurisdiction and already requires that overseas assets be reported to the Treasury under penalty of a felony.

Consider the same rates for rich and poor – 8% on income, no payroll taxes and 2% on net wealth (excluding $15,000 cash and $500,000 in retirement savings). Even C corporations could be taxed at a flat 8% with a 4% VAT - (the fairest way to apportion taxes among businesses worldwide).

For individuals who want to avoid a 2% net wealth tax, there would be nothing wrong with an a flat 26% income tax rate (instead of the 8% rate). Capital taxes on gains, gifts and estates would make the choice a bit more difficult.

An optional net wealth tax paired with very low income tax rates is, at least, politically cognizable. According to Bill Gates (speaking at AEI on March 13, 2014) the elimination of payroll taxes is also the best way to encourage full employment.

http://www.cepr.net/index.php/blogs/beat-the-press/krugman-and-delong-on-avoiding-secular-stagnation

"We [in the top 10%] are too rich" acquiring all gains in net wealth for decades and a 75% share. That leaves only 24% of net wealth for the middle class and 1% of U.S. net wealth for the poorer half of the population.

With fewer workers getting a smaller share of G.D.P. the payroll taxes have become a burden on both job creation and real take-home pay. Bill Gates said two weeks ago that they should be eliminated to create jobs and a VAT would be a good replacement. Piketty thinks we need a net wealth tax at the top but a 2% net wealth tax (excluding $15,000 cash and $500,000 retirement) could be combined with an 8% income tax for those at the bottom. The wealthy could pay a flat 26% on income (plus capital taxes on gains, estates and gifts) if they are "Too Rich".

http://www.mainstreet.com/article/moneyinvesting/taxes/scrooge-tax-wealthy#

An Optional Net Wealth Tax

There are narrow minded tax reform advocates who see "distributional neutrality" and payroll taxes as necessary. Overtaxing income is destructive. A net wealth tax can capture real economic income (much of it now avoiding tax) and a VAT can fairly apportion taxes among businesses - both without slowing the economy.

Consider eliminating the job killing payroll taxes (as Bill Gates said two weeks ago) and combining a low 8% income tax with a 2% net wealth tax (excluding $15,000 cash and $500,000 in retirement funds). The net wealth tax might even be optional for those willing to pay a 26% income tax (plus capital taxes on gains, estates and gifts). A VAT of just 4% would also enable the C corporation rate to be reduced to 8%.

http://economix.blogs.nytimes.com/2014/03/11/qa-thomas-piketty-on-the-wealth-divide/?comments#permid=11327514

An Optional Option

"A. The ideal solution is a progressive tax on individual net wealth. This will foster wealth mobility and keep concentration under control and under public scrutiny.

Q. Owners of wealth are unlikely to like this solution. And they probably have the political power to stop it. In this sense, do you think our democratic systems will be able to address and slow this trend?"

Thomas Piketty is wise to see the global need for a net wealth tax but it does not have to be progressive if combined with a low flat income tax rate. Eduardo Porter is also wise to suggest that the "owners of wealth" may not like the net wealth tax solution but what if it were "optional".

Imagine a flat income tax rate of 8% and no job killing payroll taxes. Eligibility for the low rate would come from joining it with a 2% tax on net wealth (excluding $15,000 cash and $500,000 in retirement funds). The wealth tax exclusions would help every family move into the black and begin some real saving. Taxpayers could optionally choose a flat 26% income tax rate (plus capital taxes on gains, gifts and estates). If it takes you more than a minute to compute your personal tax liability you are either slow at math or in the top 10% of net wealth holders.

A complementary business tax reform would reduce the C corporation rate to 8% and impose a 4% VAT - (the fairest business tax worldwide). The rounded 2-4-8 and 26% tax rates would be a little above revenue neutral. The economy would scream.

http://www.nytimes.com/2014/02/15/opinion/nocera-innovation-optimism-and-jobs.html?ref=opinion

Tax the Owners of Technology - (the Ones Taking Both Jobs and Income)

Technology, in the form of intelligent machines and methods of doing business, enables increasing portions of business income and wealth to be produced with smaller payrolls going to fewer workers. In 1970, 94 percent of men worked, but by 2010 only 81 percent were working. Earnings for men with just a high school diploma fell by 41 percent from 1970 to 2010. With smaller payrolls a tax rate of 15.3% on the first $115,000 in income is needed just to generate retirement benefits for Social Security and Medicare.

Of course seniors are not the only people that need help in light of the fact that the U.S. has the highest portion (25%) of low and minimum wage workers in the world. For many, even the payroll taxes are too much so we have the EITC and Food Stamps to help ends meet. The ACA has recently added health care as an entitlement for some which will be paid by businesses (passing the costs to consumers), by the government and from further depleting the savings of middle class individuals.

The middle class lost 8% of their net wealth between 1995 and 2010 while the poorer half of the population lost 70% of their net wealth. Instead of taxing income (which is easily avoided at the top) we could eliminate the job killing payroll taxes and join a low flat 8% income tax rate with a 2% net wealth tax (excluding $15,000 cash and $500,000 in retirement funds).

http://www.nytimes.com/2014/01/29/opinion/capitalism-vs-democracy.html?comments#permid=11046744

Why Not An "Optional" Net Wealth Tax, Really

The Piketty diagnosis sounds like the "Economy of Exclusion" described by Pope Francis. This growing concentration has left more and more people excluded from work and a share of wealth needed to support family life.

Piketty’s version of a wealth tax is extreme because it is global (said to be needed to prevent wealth from leaving the country) and has a progressive rate structure (for no necessary reason). His design may reflect problems with the implementation of a "soak the rich" style wealth tax in France. "Piketty’s wealth tax solution runs directly counter to the principles of contemporary American conservatives who advocate antithetical public policies: cutting top rates and eliminating the estate tax."

A global wealth tax is not needed because the U.S. has maintained a worldwide tax jurisdiction and already requires that overseas assets be reported to the Treasury under penalty of a felony. Consider the same rates for rich and poor – 8% on income, no payroll taxes and 2% on net wealth (excluding $15,000 cash and $500,000 in retirement savings). Even C corporations could be taxed at a flat 8% with a 4% VAT - (considered the fairest way to apportion taxes among businesses worldwide).

For individuals who want to avoid a 2% net wealth tax, there would be nothing wrong with an optional flat 26% income tax rate (and capital taxes on gains, gifts and estate taxes later).

http://www.washingtonpost.com/opinions/can-the-two-parties-agree-on-priorities-and-goals/2014/01/22/ae229dc0-7e27-11e3-9556-4a4bf7bcbd84_allComments.html?ctab=all_&

Bad Policies:

•           Single family zoning

•           Job killing payroll taxes

•           Tax expenditures for high earners

•           Minimum wage laws

•           Employment at Will (and discrimination against straight white men)

•           Food Stamps

•           ACA (Obamacare)

•           25 year government plans to raise other people's children

Good Policies:

•           Optional net wealth tax paired with low income tax

•           Value added tax

•           Full employment through transitional jobs with public charities that increase automatically as private employment declines

•           Prohibit health insurance discounts and discrimination, post primary care prices and regulate hospitals

•           Free online education (texts, tests and degrees recognized by civil service)

•           Permit churches and public charities to openly participate in politics to give a voice to the poor and balance the voice of the 1%.

http://www.forbes.com/sites/taxanalysts/2014/01/22/what-if-the-income-tax-is-all-about-envy-would-that-be-so-bad/?utm_source=alertscalledoutcomment&utm_medium=email&utm_campaign=20140127

Envy, Greed and Fairness

Pope Francis knows the difference between the do-nothings who give lip service to “inequality” and those who understand “exclusion” and expect governments to eliminate it. Families are the primary economic unit and they require a share of work and wealth to sustain marriage, procreation, child rearing, care for the elderly and life in general.

Consider tax reform that has the same rate for rich and poor – 8% on income, no payroll taxes and 2% on net wealth (excluding $15,000 cash and $500,000 in retirement savings). Over time it would help to restore the net wealth lost by the poorer half of the U.S. population (down 70% since 1995). Even C corporations could be taxed at a flat 8% with a 4% VAT.

To be fair to the 1% or anyone who may oppose a net wealth tax option, there would be nothing wrong with a flat 26% income tax rate (and estate taxes later).

Now an optional net wealth tax is certainly not about envy It is about family stability, fairness and responsibility. Let everyone pay the same rates or let their estate make up the difference.

http://economiccollapsenews.com/2014/01/22/pope-continues-to-promote-socialist-economic-policies/#comment-509

Pope Francis may know something about religion, and he certainly has a worldwide army of economic advisors at his fingertips. He has spent most of his life a leader of the most brilliant group of men ever assembled – the Jesuits. It is perhaps arrogant for Mr. Moran to suggest that Pope Francis, “doesn’t understand economics”. President Obama believes he does and will meet on March 27 to discuss economics further. Of course Mr. Moran may also think he knows more about economics than the President.

Pope Francis knows the difference between the do-nothings who give lip service to “inequality” and those who understand “exclusion” and expect governments to eliminate it. Families are the primary economic unit and they require a share of work and wealth to sustain marriage, procreation, child rearing, care for the elderly and life in general.

Consider tax reform that has the same rate for rich and poor – 8% on income, no payroll taxes and 2% on net wealth (excluding $15,000 cash and $500,000 in retirement savings). Over time it would help to restore the net wealth lost by the poorer half of the U.S. population. Even C corporations could be taxed at a flat 8% with a 4% VAT.

To be fair to the 1% who may think they cannot afford a net wealth tax even with the option of keeping 92% of their earnings, there would be nothing wrong with letting them (or anyone else) pay a flat 26% income tax rate (and estate taxes later).

Now who doesn’t understand economics?

http://economix.blogs.nytimes.com/2014/01/14/how-the-courts-constrain-tax-reform/?comments#permid=10962986

A Capital Option

The legal objections of 70 years ago that market value could not be fairly determined and taxed without a sale (gain) fixing the price in the "free market" are no longer valid in the age of vast internet markets selling near identical property. Even private businesses can be more easily valued based upon a history of earnings and liquidation value of tangible assets. Increasingly easy valuation has led some to advocate an annual mark to market approach for tax liability.

Capital gains tax payment can be painful especially when we all know Warren Buffet and will Gates will avoid billions by never selling their appreciated stock. The middle class may be happy to pay a reduced rate on gains to supplement retirement but it is the small business person in the upper middle class that often gets hurt with a once-in-a-lifetime large sale.

A revenue neutral tax reform featuring an optional net wealth tax could be the capital tax solution that has remained elusive. Consider a low 8% income tax rate (and no payroll taxes) for most of the 99% willing to pay 2% of their net wealth (excluding $15,000 cash and $500,000 in retirement funds). Keeping 92% of earnings is a very good incentive for both workers and pass through business owners. An optional flat 26% income tax rate (plus capital taxes on gains, gifts and estates) could be paid by the handful of taxpayers who might choose not to pay net wealth taxes. A 4% VAT on business would also enable an 8% C corporation income tax rate.

http://www.nytimes.com/2014/01/06/opinion/abolish-the-corporate-income-tax.html?comments#permid=10888813

Hurting Workers

I am concerned about tax fairness for all segments rather than trickle-down theories that exclude too many at the bottom. With my objective clear, it is always surprising to some that I advocate an 8% corporate income tax rate (see TaxNetWealth.com). The 8% income tax rate (with no tax expenditures) can be part of a fair and "revenue neutral" income tax for all taxpayers if joined with an optional 2% tax on net wealth (excluding $15,000 cash and $500,000 in retirement) and a 4% value added tax on business (replacing payroll taxes). A higher 26% income tax can be paid by the few who don't want to share their fortune during their lifetime.

Laurence Kotlikoff states, "I, like many economists, suspect that our corporate income tax is economically self-defeating — hurting workers, not capitalists ...". If Kotlikoff cared about workers he would at least mention the payroll taxes that impose a 7.65% tax on each worker (helping to send jobs overseas) and reduce worker take home pay by another 7.65% (slowing the demand economy and increasing inequality).

I find it almost impossible to consider any major tax reform that fails to mention a value added tax. While some think of a VAT as a tax on consumption it is really more like a business income tax that fairly distributes the tax burden among all businesses in the chain of production. Every developed country in the world has considered and adopted a VAT. U.S. corporations have never wanted business tax fairness.

http://www.nytimes.com/roomfordebate/2014/01/05/does-the-us-need-another-war-on-poverty/why-we-need-another-war-on-poverty

Restore Modest Family Wealth

The war on poverty has failed because it has focused on equality and overlooked family wealth.

Plaintiff's attorneys armed with laws that would permit recovery of attorney fees could eliminate adult discrimination quickly.

Educational inequality is different because success is measured in terms of jobs and no amount of education can create more good jobs than the economy needs. At most a few children from poor families will be able to take a few jobs from children from more wealthy families who attended the best schools. Face it, over education of the population leads to too many job seekers and lower salaries.

It has taken five years but President Obama has finally recognized the importance of family wealth: "millions of families were stripped of whatever cushion they had left", "the top 1 percent has a net worth 288 times higher than the typical family, which is a record for this country", "gaps [in all social welfare measures] are now as much about growing up rich or poor as they are about anything else". The poorer half of the population have lost 70% of their net wealth since 1995 and they is no plan or bill in congress to reverse this long-term trend.

Poverty and the destruction of family life that comes with it will remain until the safety net is replaced with guaranteed jobs and a net wealth tax that enables the poor and working class to start paying most taxes only after modest family wealth is reached. See TaxNetWealth.com

http://opinionator.blogs.nytimes.com/2014/01/04/happy-new-year-politicians-seriously/?comments#permid=10882957

Honest Debate

"[N]egotiations between the administration and the insurance companies over health care ought to be put on C-Span." Perhaps the negotiations began off camera by explaining to the President that insurance companies work with volume discounts that limit medical choice to "discount providers" and necessarily raise the rates for anyone without health insurance.

Obamacare Solution

"Either you have a truly centralized single-payer system or ... Volume discounts can be prohibited. Primary care providers should post their medical prices to create a cost effective market. Hospitals are local monopolies and their rates should be regulated like utilities.

"Political Giving"

"transparency in political giving" is good, but only if we let churches and nonprofits participate on behalf of the poor. (Dorothy Day would understand).

"Economic System is ... Broken"

"Government programs have to be built around the paradigm of individual choice ... aggressively redistribute wealth ... [and/or]  invest in human capital". Perhaps Pope Francis is right about the trickle-down theories and free markets being incomplete (rather than "broken"). Many people are excluded from a family-sustaining share of both work and wealth. Replace the job killing payroll taxes with a VAT for full employment. Allow taxpayers a choice of an 8% income tax combined with a 2% tax on net wealth (excluding $15,000 cash and $500,000 retirement) or let the few pay a flat 26% on income.