Buckeyecoinguy's 500th Post Contest - Last Page

Posted 02/21/2016 3:45 pm

Here is my preferred tax plan for anyone interested.

Eliminate income tax for individuals. Keep income tax for business.
Taxes discourage behavior. You want people being productive. You want more jobs, not less. Eliminate taxes on them (and the matching taxes on employment). You just made American labor more competitive globally and should lift the economy. People will keep more of their income and be able to spend or save it as they see fit. Would be a boon to the economy all around.

Businesses will still pay tax on income. I would liberally allow them to deduct capital expenses in the US. Business pass through income is still sadly double taxed until the budget is balanced for at least X period of time at which income is only taxed at one level (and I don't care which one either though think it would be easier to tax the individual (if it ends up in his wealth) and not the business, but that really doesn't sound fair with businesses paying no income tax so I would probably have the business pay and dividends and other profit distributions be tax free to the individual (unless it shows up in his wealth). Trust me it is a better deal for all if I just eliminate the business tax at the business level, but I can't sell that, so probably businesses are still income taxed and individuals would be doubly taxed if it shows up in their wealth (unless they spend it, it will show up in their wealth). You really aren't eliminating double taxation this way, but I don't think people are smart enough to understand this simple concept.

It depends on your tax bracket, but it is easy to figure out. You would be paid your gross wage. Keep it all and spend as you wish. For example if you now make $12.50 a hour and work 40 hours a week, you gross $500 weekly. That is your paycheck. The government gets nothing. Ballpark that weekly check would have been $350 - 400 after typical income taxes we have now (not accounting for insurance, topic for a different day). In this case you would keep that extra $100 - 150 per week. That is an extra $5200 - $7800 a year in that case. Now if you accumulate wealth, that will be taxed. If you spend it all though and rent a home instead of buying, you will pay zero wealth tax too. You just cheated the system, congrats, that is what I want people to do, spend their money and get money velocity going again.

Create wealth tax for individuals, waive wealth tax for businesses.
With individuals not paying income tax, they still need to contribute so I'd propose a wealth tax.

Revenue is your paycheck.

Expenses are what you spend.

The difference is savings.

Accumulated savings is wealth.

That is what I would tax.

All bank / brokerage accounts included in wealth tax. All home values included in wealth tax. All other private property is not part of the wealth tax. Standard deduction of $Y from wealth tax to account for typical housing. If you have wealth, but no income in the year, then you would need to liquidate assets. I don't like forced sales. If wealth > 0, and income less than $Z (probably some multiple of poverty level), then no wealth taxes on first $A of wealth.

Sadly I may need to have capital controls and no physical cash. I would allow private ownership of gold and silver still (and bitcoin) as alternative currencies.

A wealth tax is similar to a negative interest rate (coming to America soon, like within the next 12 - 24 months).

Consumption and Use Taxes
These sound fair, and in theory they are, but in practice they are not.

Poor people consume and use more as a percentage of either income or wealth than wealthy people. As a result these taxes are punitive on the poor.

Probably the worst kind of taxes possible unless they are for things you don't need to consume or use, then maybe as a social prod, but I don't like using my tax code for these purposes.

Keeping taxes and spending the same
We already spend roughly double what we take in in taxes from what I recall.

Spending does need cut.

Zero people welfare cuts.

With the elimination of double taxation of business income, we can motivate the business world to help eliminate corporate welfare in order to balance the budget to kick in the automatic end of double taxation of business income.

Cost of the system
Lots of cost involved in taxes. No need.

A personal wealth tax is fairly simple. You have your bank and brokerage accounts. You have your home value. You add the two up, subtract the standard deduction and pay a percentage of tax on that. Scratch that, the government will do that, show their work and send you a bill. You can dispute the math and have a hearing or just pay the bill.

I'd prefer one rate for all, but until the budget is balanced, we can keep a progressive tax scale. When we do balance the budget, everyone is paying the lowest rate listed.

Holes in my system
All non cash or cash like or non housing wealth escapes taxation. People would be incented to hoard / collect art, gold, silver, coins, cars, etc. Tangible items would be the escape, but I am OK with that. Who am I to determine what you need to spend your money on. If you feel you need a rare book collection in order to live, that is your decision. Any expenses you want to incur are valid in my world. Only your wealth is taxed and only if you have income so you don't need to liquidate your house. Private property values would skyrocket and I am fine with that. We should want our people to be prosperous and not domesticated and dependent on the state.

Renters escape the housing portion of the wealth tax. I am fine there. It will be charged back to them in rent I am sure by the market and the landlord. No worries. If that is an issue with getting this passed, I am willing to have a standard wealth deduction and a different standard wealth deduction for owners of real property (land / housing).

End game
I would like a complete elimination of taxes until we return to hard money (gold, silver, nickel, and copper coins with all paper backed by either gold and or silver and all transactions of nickel and copper coins capped at some low figure). The system of a flat wealth tax on individuals and an income tax on businesses is ideal until we transition back to hard money. It encourages spending in the economy and makes us more competitive globally. At some point people are going to realize that the most efficient government that respects private property rights and has a stable legal system will always attract all the financial and human capital it will ever need. It is high time governments compete for the right to serve their citizens.

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