Thoughts from Tom Maguire.
It seems unconstitutional to me on its face. We had to amend the Constitution to get an income tax, and I’m pretty confident that it would be required here as well. Anyway, as Jim Bennett noted on Facebook, we should reserve comment until we can properly understand the proposal by reading it in the original Cherokee.
[Update a while later]
Want to soak the rich and help poor people? Tax fringe benefits. Yes, this would help a lot with decoupling health insurance from employment, which is how the mess got started.
What we need is the Fairtax. That would be a national sales tax,it would be set at 23%, would be on all goods, and it would abolish the income tax, payroll tax, capital gains tax, and the death tax. April 15th would be just another day. You would file no more taxes. If you buy an item that cost $100.00, then you will pay $100.00. The store owner sends $23.00 to the government. Items that are made in other countries, will be taxed. But if a company makes a product here, and exports that product to another country, then there would be no taxes on it.
But I don’t think congress will enact the Fairtax. This will need to be done by the states. The state legislators can go around congress, the president, and the supreme court. We need to tell our state legislators that we want the Fairtax.
They would but only if they kept all the other taxes.
A wealth tax is a horrible idea. It wont generate much revenue but it will punish the small number of people it targets until they have no assets to speak of. Of course, then they will have to redefine who it applies to and the misery will trickle down until we have only the impoverished and the powerful party people. How many decades would it take for the shining light of the sum total of human civilization to be reduced to raiding zoos for food?
We might never know because zoos will be outlawed before that happens.
Instead of taxing fringe benefits, how about tax credits for what regular people spend on insurance and retirement programs? A rational way to look at it, is that every dollar a person saves for a dedicated purpose is five less dollars that the government has to spend on social services.
How do you define wealth? What level of government intrusiveness is required to determine what the value of non-financial holdings are?
The rich will always find a way to mitigate their losses to a point which they find moderately acceptable; they have the resources to do so, up to and including relocating to another country. The less-well-off? Not so much.
FairTax? It seems like VAT (Value Added Tax) to me.
We already have that in the EU but 23% is really high. That is about what you would get in Sweden. 16% is more reasonable.
I think a “wealth tax” is basically pointless. Just increase the amount of tax brackets in the income tax. Add a bracket for people with really large incomes with a higher tax percentage.
There have been talks about a capital gains tax. I do not think that is all that of a good idea. But something like a per transaction tax on stocks might decrease the amount of pointless high frequency trades. Or you could make it so some stock market transactions are only made at fixed intervals to make high frequency trading impossible.
But most important of all, I think, would be to revisit the practice of stock buybacks. Especially if those are made against raised debt like Apple does.
Its not a VAT. Everybody would get a prebate each month. That would be about $200.00 a month. There would be no income tax, payroll tax, capital gains tax, or a death tax. Just a national sales tax on all goods, and services.
Businesses don’t pay taxes. There is no business in the world that pays taxes. Instead it is people that pay taxes. When you buy something at the store, you don’t just pay for labor, and resources that made that item. You also pay for that business taxes.
So when politicians talk about raising taxes on businesses, what they end up with is higher prices for goods, and services. But if a good is made in another country, then its price does not go up. If made here in the U.S., then it will go up.
But with the Fairtax, a cellphone made in China, or South Korea will be taxed. Anything made here, and exported over seas will not be taxed. If you own an apartment in another country, and you rent it out, then you pay no taxes from that rental. Charlie Rangel got into trouble for that very reason.
Also, if you give somebody a brand new car, the person that receives that car pays no taxes on that car.
Oprah gave some audience members a brand new car. They then had to pay taxes on that car. They didn’t know that, and got into trouble.
So I say yes to the Fairtax, and no to other taxes. That includes the flat tax.