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first, let me thank you for raising the tax issue ... it really should be a central theme for the democrats ... for too long, we've let the republicans label us as tax and spend ... we've seen a massive erosion of tax fairness under republican administrations since 1980 ... corporate welfare, aided by the tax code, is alive and well ...
now, having said that, i think your tax plan creates all kinds of problems ...
first, i think the rates are way too high ... i'm concerned about my retirement ... social security is in big trouble ... i, along with millions of others, have lost a significant percentage of my retirement savings when the stock market crapped out ...
i need every penny i can save ... your 45% rate on income over $40K would kill me ... you need to understand that my property taxes are approaching 8% of my income and state taxes account for another 5% ... so, not including sales tax and other taxes, i could end up paying almost 60% of my income to taxes ... trust me, i'm not a wealthy person ... this would kill me ...
the other problem i see is one of fairness ... let's say my house is worth $1 million dollars ... i assume from your plan i would pay no income tax on this because i already own the house ... now, someone buying a house nearby pays $300K for a house that's 15% above the median price in this area ... under your plan, this person would be subject to your luxury tax even though my house had a value more than 3 times higher ... not to mention the fact that you could be hurting builders and others whose income is dependent on the housing industry ... the luxury tax they imposed on expensive boats several years ago really did have a negative impact on jobs in the boatbuilding industry ... and, i think this tax would kill the democrats politically ...
as for your "no taxes on income under $40K", count me in ... i have no problem with a progressive tax structure that benefits those at the bottom of the income scale ...
here are a couple of my tax proposals that i posted on kerry's website about a month ago ... no one liked them very much ... that's too bad ... perhaps they need some work but i think the basic idea is sound ...
1. gain on stock sales of any company not headquartered in the U.S. will not be eligible for lower capital gains rates and will be taxed as ordinary income ... if companies want to move offshore to reduce their corporate tax liability, they are really going to piss off their shareholders ... the shareholders would have no incentive to allow them to do relocate ...
2. companies would be required to report to the federal government the percentage of their workforce that resides in the U.S. (or are U.S. citizens) ... stockbrokers would be required to report this percentage of domestic labor to their customers when a stock is sold ... proceeds from the sale would be allocated, based on this percentage, between those proceeds eligible for lower capital gain rates (the domestic labor percentage) and ordinary income rates (the non-domestic percentage) ...
so, for example, let's say you made a $1000 profit on the sale of a stock in a company headquartered in the U.S. ... but let's say that only 20% of that company's employees are in the U.S. (or are U.S. citizens) and the rest are in India ... $200 of your gain would be eligible for lower capital gain rates and the remaining $800 would be taxed as ordinary income ... companies would be free to outsource if they chose to, but they would have a much harder time attracting capital and satisfying their investors ...
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