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2-4-8 Tax Blend
January 10, 2013 | 06:48 PM
"[T]he increasing differences between those few who grow ever richer and the many who grow hopelessly poorer, should be a cause for dismay," according to Pope Benedict XVI in his address to the Diplomatic Corps on January 7, 2013. The $1.3 trillion in U.S. tax expenditures ("loopholes") illustrate the problem. Between 1995 and 2010 the top 10% increased their wealth by 10%, the next 40% (the middle class) lost 8% and the lower 50% lost 70% of their net wealth. Because the poor and middle class must consume so much of their wealth the "FairTax" reform would only make the wealth gap grow. A tax blend with low rates is the best way to stimulate the economy and make the system fair for all.
A "revenue neutral" 2% net wealth tax (excluding $15,000 cash and retirement funds) could replace the job killing payroll taxes and enable the income tax rate to be reduced to 8% for all (because no tax break for anyone can be justified at an 8% rate). Progressive tax liability is achieved with rich and poor paying the exact same rates because half the country only has 1% of the wealth while the top 10% have 75% of the $53 trillion (2010 FY) in individual net wealth.
A 4% VAT on all business sales would also enable the corporate rate to be reduced to 8%. The U.S. would have the most competitive rates in the world and trillions in foreign corporate profits would be returned for investment in the U.S. Read more at TaxNetWealth.com.
Eugene Patrick Devany
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