Suggestions for a Democratic tax program -how about an asset tax?

[papau]

How about a 5% tax annually on assets - after a deductible of the value of house plus 500,000, with the value of the house capped at 2 million.

Rome used an asset tax, and it seems a good way to go.

On the individual income tax the easy way is to keep all tax cuts on income below 100,000, and reset the marginal tax rate on income above 100,000 back to Clinton levels, including the tax on investment income/capital gains.

But we can be creative and go with a "flat tax" of 30% on income after a "standard deductible" (equal to 20000 per family plus 10000 per adult person on the return as either dependent or joint filer, plus 5000 per child), plus a mortgage deduction of 5% of the value of your house on your local real estate tax bill - not to exceed 50000, plus a charitable deduction limited to the smaller of the actual contribution to charity or 50000. Keep the earned income credit as a refundable credit.

On the corporate income tax side keep all laws as they are now, but do some IRS Code 482 - transfer pricing - enforcement, plus end the buying of financial structures when there is a tax effect over the next 10 years tax in excess of a 5% decrease in the amount of the tax being paid this year, unless there is a manufacturing or service cost savings that can be shown as a reasonable anticipation.

On all reform ideas treat investment income the same as wage income, apply the same tax rates applied to wage income to 100 cents of every dollar recieved.

Payroll tax reform might be to tie the wage cap to the ERISA COVERED WAGE CAP FOR BENEFIT CALCULATION (currently 220,000) and to include investment income in the calculation by having the income tax form pick up the payroll tax not yet paid on investment income. Throw in an increase in the full benefit retirement age from Reagan's 67 to say 68, taking effect in 2040, and Social Security is funded forever. Of course have Social Security invest its trust funds in non-government bonds, plus stocks via a broad based 2000 or 5000 stock index. Other countries do this and it is way past the point where we should do this.

Hire an audit crew at the IRS for every return, individual or corporate, paying more than $20 million in tax or showing more than $100 million in income (wage plus investment) before adjustments and deductions.

Then extend Medicare to everyone, funded by a 6% tax on all income over 20,000 - and we have economic and health and Social Security heaven.

[lcordero2]

1. uuuuuhmmmmmmmmmm

I take to Robert Kiyosaki's way of thinking. A house and car are liabilities and not assets.

[napi21]

2. Several southern states already have a tax on assets.

They call it an ad velorum tax. It's on cars, boats, trailers, etc. You pay a certain amount every year pased upon the value of the asset. I've never had a BIG problem with it because we never buy NEW cars, don't have a boat, and our little utility trailer is taxed ata very small mount...around $5.00 a year.

I think you eed to be careful about real estate taxes. Some of them are very high already! also, funds from real estate taxes have traditionally gone to primarily fund schools. I don't think we want to mess with that. At least not now.

I can give a very lucrativesuggestion right now that would not only fund the Gov't but level the playing field. "Eliminate all the soecial tax breaks for specific Corporations". The current tax xode isalmost 5,000 pages long, and the majority ofit is tax breaks to very specific companies. Most of the time, it's a break to ONE company alone! All thosequid Pro Quos ya know! Simply erase all of them!

[soothsayer]

3. Ah, the good old Luxury Tax (like in Monopoly). Had that when I

was a kid. They taxed your car, how many tvs you had, couches too I think (40, 50 years ago when my folks moved to Arlington VA)

[napi21]

4. No this is not a luxury tax. It's levied on anything you have to

license. You can renew the license until you pay the tax. It is based upon value, so one of our cars(an 88 Nissan) is only taxed at $38, the other car is a 99, and taxed at $185, we used to have a fishing boat that was taxed at $12, and of course the utility trailer at around $5.

I believe a luxury tax is different, and usually levied on "luxury" items, like Yachts, Rolls Royce's, etc.

[papau]

7. As the 94 luxury sales tax showed - the rich can avoid specific asset

taxes.

Personal property state taxes always miss the rich relative to the take one would get with a federal asset tax.

[papau]

6. The rich avoid most state asset tax via "wrong state" - and they have most

of the assets.

It is like the luxury sales tax on the rich in 93 - it collected no money because the rich can avoid a sales tax (which is why the rich push a "fair tax" - a sales tax - to replace the income tax)

The tax on assets I propose excludes the home as an asset so your concern is more or less met.

Corporate loopholes for individual companies should go - but there is little money in this move relative to other changes - such as enforcement of transfer pricing under IRS Code 482.

[theanarch]

5. i'd take a somewhat different...

...approach, focusing on making the rich pay their fair share. Before getting to any specific recommendations, i'd suggest that to make any tax reform proposal(s) palitable to the public, the changes have to framed in the context that paying taxes lowers one's cost of living, while raising the quality of life. The reason most people object to taxation is because, by the time Congress (and state legislatures and counties/municipalities/townships) get done paying off the special interests that bankrolled their elections, taxes increase the cost of living for ordinary citizens and lowers their standard of living.

With that overview in mind:

Repeal 'supply-side' tax cuts, and return to the progressive income tax with increasingly higher rates at the upper end (under Eisenhower, the tax on incomes above $1M. was 90%). Close corporate and upper-income loopholes--especially parking in tax-free, off-shore accounts (usually favored by the criminal class: gun/drug running; money-laundering; etc). Raise the capital-gains tax, and make it payable at the time of the transaction (e.g., sale of stocks, bonds, etc)--the software for this exists, and would pump tens, if not hundreds of millions per day into the treasury, with said payments being treated as estimated payments. Cap the estate tax at $1M. per individual and $2M. per couple (personally i'd lower it to $500K/$1M., but that's just my preference). Also, tax unearned income (above, say $50-75K) as earned income.

Socialize medicine, and pay for it by raising (or better yet eliminating) the cap on taxable income; this will lead to not only universal coverage, but lower Medicare tax rates as well (possibly 10 to 25 percent of what they are now, putting more disposable income in the pockets of working folks). The savings to business will be in the tens of billions, which can be reinvested (with appropriate incentives) in higher wages, modernization, pollution controls/abatement, etc., as well as higher earnings for stockholders. Ditto Social Security, again with lower rates for all, and actually allowing for a lowering of the retirement age (instead of constantly raising it).

Free education for all qualified students of any age, with increased aid to colleges and universities to accomodate the qualified. Getting people out of their cars and into public transit accomplishes several things: cleans the environment, gives tens of millions a bit more exercise than they get otherwise (a long-term public health plan as well); puts a brake on suburban (and exurban) sprawl; lowers the operating costs (less gas, fewer repairs, lower insurance, fewer accidents); and puts lots of people to work building the infrastructure for it (a real way to grow the tax base).

Massive government investment in rebuilding the infrastructure: water/sewer systems; electrical grids; improved housing, schools, public buildings and office/factory space (safer, healthier, more energy efficient)--again, providing meaningful, well-paid employment across the workforce (from the planners, engineers, etc., to the skilled, semi- and un-skilled); and (again) growing the tax base.

Just a few thoughts for now...

[papau]

8. Now I like every one of your ideas! - and would drop mine if I could get

your ideas passed!

Great post!

:-)

[hermetic]

9. You just got my vote

These are the kind of ideas we need from our pols, IMO. Will you run for president please.

:yourock:

[FogerRox]

10. How about we return to a progressive tax system

Like from WW2 to 1970. If it wasn't broke, why fix it? The top personal tax rate was 92%. Corporations paid 50-60+%. At the same time

Labor Unions were at the zenith of power
US was the Manufacturing center of the world
The US had the largest middle class in the history of mankind
The highest & best educated generation ever
A vigorous economy that grew at 3.5%
Corporations made money
US public schools were the best- planet wide, same for Colleges

[Jason101]

11. NEW Time saving innovative Tax Idea

How about if we jsu give the government all of our paycheck through witholding, let them figure out what they need and then have the IRS issue a refund every year on April 15th!