Income taxes, and nothing more...

Do you think a completely income tax based tax system would be a good thing. Some people will say no, but here's my plan and subsequent reasoning:


0-100K = 0% tax rate
100K-1M = 20% tax rate
1M-10M = 40% tax rate
10M-100M = 60% tax rate
+100M = 80% tax rate


Here's how it works. Billionare Bob just got a 1 Billion dollar windfall off of selling his Exxon Mobil stock. He has two choices:

Invest it in Capital (his company, bonds, more stocks), or Personal (buy a manshion, put in the bank, live off it). If he invests in Capital, it doesn't get taxed. If he uses it like income (to buy or to save something for himself), then it's included in his income.

So basically, any personal income you make is taxed above $100,000. This would encourage more capital spending, give the middle class a break, and hopefully, create jobs.


After all, this eliminates taxes on property, sales, payroll, estates, inheritences, and lots of other things.



Could it work.

But it wouldn't work. There aren't enough people making the big bucks to support the government in the style to which it has become accustomed.
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The middle class has to be taxed because that's where the money is.

they would be the main beneficiaries - certainly in the UK, where, at considerable cost to themselves, they have to make up for some of the shortfall arising from the minimisation of the tax on the richest. The rest of the shortfall is simply not made up, and the country's social and physical infrastructure continues to deteriorate. The poor have already been bled dry.

Lots of British immigrants in my area (Philly), so it must be bad. Plus, they still outsource anyway (I heard UK industry is falling apart too). Greedy pigs.

That bitch began the process, and as a TV playwrite put it, has turned the country into a vast shanty-town of hamburger stalls. Mad cow meat, too.

ago. There are no more IT jobs in the USA. The GOP has declared war on the Middle Class and most of them do not know it yet.

The corporate psycopaths and their human enforcers in government.

No more staffers and secretaries. The government simply has to trim the waste. NYS spends 40 Billion of Medicaid for 5 million people. 20 Billion of that is striaght out fraud.


Besides, here's the key:


If companies invest in Capital (and American capital at that, not a new factory in Bejing), then new jobs are created and then the extra money the Middle class has creates even more new jobs and you have a totally capitalist system.

In example, I own a small business. I could be a fool and have my business "invest" in a 60K Hummer and then deduct it as a business expense.

Stricter regulations will be made to insure against this...

Business Owner B with a construction business might have a legimate use for a Hummer to get to remote construction sites.

I think that the patriotic thing to crow about would be how MUCH tax you paid, not how little. A true patriot would be pleased that part of his income would help support the country that gave him the opportunities which allowed him such magnanimous wealth. But it won't work. One word. GREED. He who has, wants more. Too bad. Can anyone imagine what this country would be like if we all supported it?
rich corporations whose sole purpose is greed will be the downfall of the united states.

And I cannot think of a single good reason why there should be any other taxes than an income tax - which is the only fair way of taxing people.

Why should people be taxed a number of times on different items and in different ways, when they have already paid income tax? This way, the poorer majority are forced in many different ways, to subidise the excessively opulent life-style of the rich. Not that that would suffer in the slightest, though, as whatever they paid by way of income tax would amount to little more than beer money for them.

Many employed by current flat-tax authorities could switch to the income department, and the others could find suitable jobs in a revitalised economy. Even parking tickets, to me, are a scandal. The money goes to the local authority, who are as impudently self-serving as the national politicians, with excessively high salaries, free junkets at the tax-payers' expense all over the world - on first-class or business class flights, often justified on a grotesquely unsatisfactory basis. Some also have chauffeur-driven cars and free parking.

As for the tax loop-holes by way of off-shore accounts, which Blair authorises, words fail me.

forms of 'income' equally. We need to drive home the once understood idea that supporting the country is a shared responsibility. While the 'middle class' is currently supporting the wealthy and the underclass, I think we all need to participate. We have to start thinking about America in the collective...it belongs to all of us and it is one's duty to pay a fair share for its upkeep.

The poor are surely taxed to the hilt over there, as well as here, but the middle class will surely be bearing an outrageous share of the burden of the rich.

having to pay tax more than once on their money, i.e. only on their paycheck. And if corporation tax were restored, at least, to the old levels - which must happen - a similar thing would apply, imo. Shareholders would pay at source, so there should be no need to tax them again on their dividends. Multiple taxation just obfuscates what's going on and plays into the hands of crooked governments. Transparency would be priceless. The same with regard to inheritance tax. Passing stuff on to their families is a very deep-rooted instinct in most parents, and they'll talk of it for years before they themselves pass on.

You're absolutely right, of course, that in a modern democracy, it is a patriotic duty to pay taxes. Different under despotic rulers of the past. However, the media in the UK have always been sinisister peddlers of the Establishment's propaganda, and the taxman became as standard a joke as the mother-in-law and British Rail. (How the people need British Rail now, shamefully underfunded as it was) Now, we are living under an oligarchic kleptocracy, they're finding that now it really isn't a joke at all and never was. The maldistribution of the country's wealth has become unconscionable.
But as for the poorer folk, they (I'm semi-retired and below the threshold - or will be) shouldn't pay tax at all, nor should have done for decades.

the money is invested in a 'tax-free' bond or savings account, such as a 401k. Shareholders, or large investors, receive their income via dividends, so I think that income should be taxed at the same rates as a paycheck. I resent paying a higher tax rate on my earned income (from working) than Helen Walton (widow of Wal-Mart's founder) does on her $millions in dividends. There is currently an earned income tax credit for the poorer folks, that greatly reduces their tax burden and in some cases, pays them.

by substantially raising corporation tax to at least earlier levels.
The whole beauty of income tax is its proportionality, and corporation tax should be the same in its effect. At least that's my belief, and I suppose I may be wrong. Maybe tax on dividends would be more proportional.

If so, it's a shame, because the more simple the tax system, the more transparent, and the less scope for stealthy flat to be taxes raised by corrupt politicians.

previous post. Well, I've just come across an example in one Anthony Wedgewood Benn's Diaries (1991-2001).

Benn writes, "I rang the BBC to say, 'I notice on your news bulletins that the Conference defied Tony Blair. Now, what is the meaning of defiance? I mean, in 1979, did the British electors defy Jim Callaghan or did they defeat Jim Callaghan?' The woman organiser laughed and said, I think you've got a point.' But they went on saying 'defied' of course. A wonderful example of weasel-word spin, eh?

It is said that the Blairs, manifest (de)meritocrats, resent the royal family's superior status. And Blair seems to do everything he can to appear presidential, rather than just prime ministerial. His narcissism makes Bush seem mature.

His latest yearning is for a Blairforce One trio of jet planes to fly him round the world. This would be to replace the Queen's aging fleet, but in future, she would have to ask his permission to use it. When his bill gets to the Lords, it could run into some trouble, but if he lasts that long, would presumably be passed eventually.

to the effect that really bad people enjoy the special protection of a very powerful unearthly being, who is not God. Fortunately, it is only for a time, but when he will be sacked, who knows?

The concept expressed by the word, "promise", is not one that Blair understands. I'm serious, by the way. He seems to think it is a convention commonly and routinely used to get one's own way by deception. I mean in a much more pronounced way than even politicians are accustomed to.

Most likely, you wouldn't be taxed. And inheritance would be considered income unless put to a capital use. If Sam's duaghter takes her billions and puts it into the bank, she's gonna get slammed. BUT, say she buys bonds for a new subway line in SF. Then that's not taxed, so she builds a bigger divided for the next time and the residents of SF get a new subway...



Either way, everyone benefits. Either the well-off keep on putting money into their companies and workers (Venture capital, expansion, wgaes)...or...They put it into the bank and Uncle Sam gets Universal Helath care, top-notch schools, Massive Public transit systems, Hoemland security, Bolstered SS, etc...


BTW, the Cayman islands are not optional. Any money made in the US is taxable under my plan. Also, what can be written off as a buisness expense will be quite strict...

Though, I do admit, that <100K is where most, but not all, income from wages reside. There are, however, good reasons to tax certain forms of property, as will be discussed below.

DON'T TAX WAGES!!!

-directly in the form of a payroll tax
-directly in the form of an income tax on wages
-indirectly in the form of sales taxes (on services and labor made goods)
-indirectly in the form of (labor-built) property taxes

Between a 15.3% payroll tax, a 25% fed income tax, an 8% state & local income tax, a 3% sales tax, and a 1% property tax, our taxes raise the cost of employment by more than 100% over a worker's take home product. How much does a 100% tax reduce demand for labor by? How much more demand for goods & services would there be if everyone's pay doubled?

It is awful hard to generate millions of dollars of annual income without the government doing your dirty work. I say make people pay for that dirty work: suppression of competition through limited license; monopoly priviledge through exclusive use titles; failure to enforce environmental laws on 'grandfathered' polluters, etc.

As for the reason to tax certain forms of property, namely licenses as described above, and land values. Tax land values to allow land markets to efficiently assign parcels. Otherwise, there is a profit to be had by land speculation - and since land isn't manufactured, there is no economic benefit to such speculation.

Let me repeat:

-No payroll taxes
-No sales taxes
-No property taxes

Just income, my friend.

How would you prescribe land values? Surely everyone is going to argue for low ones. And a arce in Montana is worth far less than an inch of Manhattan. But what's the difference between them? Are things like Public Transportation, high-quality schools, urbanness, culture, and the like a help or hinderance?


My plan offers no other chioce than good:


Choice A: Incomes reduced, full employment produced. More venture capital and maybe even full private healthcare.

Chioce B: Incomes steady, extra spending power produces more Capital, full employment results.

Choice C: Rich people take money and get slammed. Universal healthcare, Public Transit, school funding, Soical secruity and quality of life improvements increase.

Take away the loopholes and you've got yourself the ultimate capitalist system...

I would assess land values with far greater accuracy than income is defined. Would you count, as income, someone who's holding increased in value by $1,000,000? What if he took a loan against his new value?

The fortunate thing about property assessments, and particularly land assessments, is that they are market based - they use real values that occur in real transactions. The difference between NYC and MT is that lots and lots of people with a lot of money want to own property in NYC, not so much in MT. The difference is DEMAND. Accurate methods for assessing property values exist: real estate companies, banks, and insurance companies use them all the time. Discrepencies between assessments of land alone are readily apparent between comparable lots. In the extreme, if it were necessary, the assessing body could purchase a lot, clear it, and auction it.

Things like Public Transportation, high-quality schools, urbanness, culture, and the like are a help, and they increase land values. Conveniently, they also cost money, in the form of public investment. Taxing land values is a direct way to pay for these things.

Why won't an income-only tax work? Because, when land is untaxed, all of the value created by public transportation, urbanness, culture, advances in science, safe communities, beneficial commerce, etc. is collected by the relatively few who own the land. You might wind up with relatively high wages and employment under a steep progressive income tax, but most of the advances in wages would be collected in higher rents and real estate prices. Sort of like what has happened in the U.S. for the last several decades.

OTOH, taxes on land value do not raise the price of land. Land is priced as a monopoly, a collectible. It's price is based purely on DEMAND, and demand only. Raising the tax on land value does not increase the demand for land, so it doesn't raise the price. Actually, raising the tax on land decreases the demand for land, because it decreases land's utility as a speculative holding; it decreases the price of land.

A land value tax trades a mortgage for a tax, and saves the buyer the cost of the interest, as well as the speculative value of the lot, at least for the land portion of a real estate purchase. Additionally, the tax can be used to reduce other, more harmful taxes, such as sales taxes, building taxes, or wage taxes.

Because there is little reason to withold land from use, the best lots get used: Cities and urban sites get built upon, reducing sprawl pressure at the exurbs - leaving farmland farmland, and forests, forests.

Because an income tax can be avoided by moving to another jurisdiction, states and localities are hindered in applying income taxes at high rates: to be effective it must be done at the National level, else the states wind up competing with each other to attract residents. At the highest income brackets, there would be an impetus to move overseas, as well as to relocate operations overseas. Because it must be administered at the highest level possible, it lends itself to the concentration of power, which, in turn, lends itself to corruption. It makes little sense to me to collect taxes in Oregon, send them to DC, and have the congressman from Alaska tell Oregon how it will be spent.

Conversely, land cannot be moved to the next state or overseas. It's value cannot be hidden with accounting tricks, nor can it go unreported. It's on the map. All else being equal, a company choosing to relocate would choose a locality who's taxation was based on land rents rather than on income tax: they would pay less to aquire the property, they're employees would cost less, and they're employees would receive more.

Note that much of Hong Kong's public revenue is derived from land rents.

But let me warn you, the term "land rent" is going to get you labeled a Communist. Someone is gonna argue than you don't rent land, you buy it.


Maybe I should have been more specific with what I label income and capital and dealing with the overseas...


Okay, under my plan, any facilites you own overseas is income, period. since it serves no American financial prupose, then it must be serving your financial service. Second, I'd pass a law saying that bank accounts outside the US are illegal for US citizens. Don't wanna comply? Don't live here, simple as that. plus, with a profit tax, obscene profits get taxed to the hilt anyway.




OR, maybe states should leverage the LVT, while the Feds handle the Profit and Income taxes.

It only works if you raise the temperature gradually, so the frog doesn't get scared and jump out of the pot before it's too late.

Your jumps are too high and too quick. A truly graduated income tax is what we need, one that avoids the pitfall of the last one by tying it to the median wage, not to fixed dollar amounts.

That way, in times of rapid inflation or deflation, the tax code would be adjusted so the folks in the middle wouldn't get financially slaughtered or get a free ride, either.

Also, not taxing income that is put into investments seems a little bit silly. Property is property, whether Bob buys a Ferrari or shares in Microsoft.

Invesstment becomes its own reward when it generates its own income, either through appreciation or through dividends. Being afraid to tax income spent on that type of property is just a little bit silly, since most people who have taken care of the necessities of life will do just that to ensure income in their future.

suppress capital and wages.

I make an important difference between Capital, Land, and Privilege.

Capital is machinery, buildings, things built by man and used for further production. The owners of capital have a choice of where to invest. When someone or something purchase capital, Labor is employed creating it. This increases the demand for Labor, increasing both employment and wages. Furthermore, with access to Capital, Labor becomes more productive. Some portion of this increase in produce goes to labor, increasing wages.

Land is natural wealth, and not created by man. The owners of it have no choice about it's location, or even it's existence. They get paid, not because they caused it's creation, but rather because the government and society recognize their rights. Land's value is completely determined by demand, and is not affected by supply. As such, it may be taxed freely without suppressing productivity or employment.

Privelege is the set of advantages granted by government or society to a few at the expense of many. Examples are corporate personhood, broadcast rights, patents, certain government contracts, banking privelege and the like. Like land, these can be 'taxed' without suppressing productivity or employement.

Generally, the first few income brackets are filled with the Wages, or the earnings of labor. The upper brackets are filled with Interest, the earnings of Capital, as well as Rent, which is the income for Land and Privilege. Because it serves a proxy for the taxation of Land and Privelege, a progressive income tax has its merits. It is not, however, as effective as taxing the income of Land and Privilege directly.

I would advocate the immediate taxation of Federal Government privelege, coupled with a gradual reduction in Federal Spending, shifting local issues to the states to be paid for with Land Value Taxes. The Federal income tax should be 'rolled up' from the bottom, as Federal revenue needs are decreased.

Ideally, I'd like to see a flat federal income tax (YES A FLAT TAX!) coupled with a basic income grant - making the net tax on median wages zero. E.G. all income is taxed at 50%, but every adult receives $20,000 a year. A bit idealistic, though. A more realistic shift would be to set the brackets a 0% below median income, 20% for 1x to 2x median, 40% for 2x-3x income, 60% for 3x +.

but the experience of the past 25 years has proven you absolutely wrong.

The place to start is WAGES, not capital.

Punishing subsistence workers with the same tax one expects of plutocrats is the surest way to keep the economy in the toilet. It's people spending money at the bottom which creates the wealth at the top. History has shown us this again and again. Lavishing wealth on the top only creates stagnation and the greatest misery for the greatest number.

Please save your theorizing for your economics class, heavily endowed by the wealthy who want you to graduate thinking that continuing to fatten them is the only route to prosperity for us all.

We students of history know the truth. Every tax increase on the wealthy and every wage increase at the bottom have led to periods of economic growth.

you are awful snide

I disagree with mainstream economics, for many of the same reasons you do. If you read with open eyes, rather than 'tax the rich' mentality, you'll realize that what I propose does fall on the rich, particularly the 'idle' rich. It falls specifically on their privileges.

Centuries of experience have shown that taxing capital (as defined by Smith, Ricardo, Marx, et al rather than the Austrians) decreases the availability of Capital - which does, in fact, suppress wages. Capital is the product of wages. If you were a tailer, would a tax on clothing not hurt your wages? If you were a carpenter, would a tax on buildings not hurt your wages?

What I propose, in language perhaps more palatable to your tastes, is to reduce taxes on wages and working, and place them on wealth. However, in order not to put those tailors and carpenters out on the street - in order to maximise the demand for wages, and thus maximise employment, I would not levy a tax on their products, nor any other product of man's labor. I would only levy wealth taxes on 'natural' wealth - things such as license, titles, and patents.

In the mean time, I would allow for a steeply progressive income tax - particularly one that exempted the first $50K-$150K, the the realm chiefly populated by wages paid for labor.

and in fact, recent history proves the exact opposite to be true. It would suppress wages only if it were not recirculated at the bottom and were allowed to accumulate in a national treasury or were squandered on wars.

Only a steeply progressive income tax will ever raise enough money to float this country. A flat tax will never do it.

We are in debt. We have been weakened by 35 years of war against the working class, and by extension, against this country as a whole. We lack the strategic industry it takes to win a large war. We are in serious trouble here, and diddling around with elegant, untried theory simply won't work.

We know the New Deal worked for us all. Even the rich managed to get richer, although not quickly enough to suit them, and they're still screaming about having to pay taxes, the lowest burden they've had to bear since the earliest years of the Depression.

I think it's high time to get back to a rational system, one that keeps the consumer money pump functioning and doesn't use artificially low wages justified by the availability of third world consumer junk to give the illusions of low inflation and prosperity. The system is about to collapse. Getting back to rationality NOW might prevent it.

capital is produced by labor
reduced demand for capital reduces demand for labor
reduced demand for labor reduces wages and employment.

Recent history has shown that if you tax the crap out labor, you get un- and under-employment.

Recent history has shown that the American public has no clue what the difference between Land and Capital is. It is the failure to adequately tax Land and Privilege (esp. banking privilege) that has given us the problems you describe.

I understand the concept of a steeply progressive income tax, and believe it generally works. It works becuase it is a decent proxy for taxing Land and privilege. However, it is not ideal. The 'consumer money pump' you speak of functions to take money from high earners and pump it into public projects. This leaves plenty of opportunity for those with privileges to receive income without earning it. It also makes locating employers and capital (jobs) in the US that much less attractive.

Conversely, the analogy for my proposed scheme would be to harness the flow that naturally occurs from those who don't have privileges to those that do. Locating businesses and capital here would not be inhibited by taxes on capital: Potential employers would pay the same or less for access, only instead of to a private landlord, they'd pay it to the public purse.

My plan does not tax capital either. Why is yours different?

by dint of an income tax

Caveat: I do favor an income tax as a 'bridge' between what we have and what we should have. In fact, I'm willing to concede that we probably won't be able to 'catch' all of the unequal privileges our governments provide, and would probably wind up keeping a high-level income tax - say on income above $150-250,000.

Again, all investments into Capital for buisness is non-taxed. Only things you use for yourself is taxed. Plus, the worker bees(those making under 100k) have no tax. It's in essance, a rich person's privilage tax.

Imagine a man who owns a nursery and garden store, and makes $250,000 a year, while employing 10 people who make $30,000 a year.

His employees wages are purely returns to labor, they have no ownership of the company.

A portion of his earnings are wages - that which he earns by being the manager of the business, and a portion for being the entrepreneur - taking the risk to be in the right place at the right time. None of this should be taxed.

A portion of his earnings are interest - that which he earns by having built greenhouses, workshops, irrigation systems, and buying pots, shovels, tractors, and other equipment. None of this should be taxed, neither the earnings, nor the ownership of.

And a portion of his earnings are rent - that which he earns by owning a few acres within range of some market, and some of which he earns by being a licensed business. This should be taxed. It would be preferable to tax it annually, and not at the time of sale.

Excluding anything from an income tax leaves a lot of doors open for lobbying and distortion. Assessing which portion of his income comes in the form of interest is difficult, as is trying to amortize purchases over multiple years (depreciating a building over 25 years, though it lasts 50).

It is much easier to assess the annual value of rent due to the land. It is somewhat easier to assess the value of corporatehood - though this is still difficult. I'd rather devalue corporatehood by removing some of it's privileges.

(and btw, I too have to retype 'privilege' almost every time I type it)

His income comes from running the buisness. Fine and dandy, but if his money goes towards himself, it should be taxed. Keep in mind, I doubt a small buisness owner is going to get slammed. At most, 20%. Really not that bad.....