ii iv viii
Logo3 Merry Christmas and Happy New Year

NEW - In 2016 the 2-4-8 Tax Blend will become 2-4-8 Tax Choice
The "choice" would allow all taxpayers to choose an income tax rate between 8% and 28% paired with a net wealth tax rate of 2% going down to zero. Wealth taxes paid would reduce Estate and Gift taxes (also set at 28%). This would encourage wealthy individuals to pay some net wealth taxes as a form of inexpensive life insurance.


C - Corp
4% VAT
8% Income

Washington Post, March 30, 2012
The tax code is too complex and penalizes success
by Brian Stein

... The current tax code excessively punishes job creators and wealth builders.  Most small business which are S-corporations see large business revenues pass through to personal tax filing, even though these revenues exist solely as “inventory” or book “adjustments.” ... The tax code is income based and punishes success in this country.  A system which is more simplistic and moving toward consumption is more fair as taxes would be based upon the level of spending people choose to take part in. ... Simplify the system and move toward a consumption based tax system.  This step sounds like just another level of taxation, but for it to work as the fair tax indicates, in detail, is to simply remove all other taxation in current existence and replace it overnight with a consumption based system.

2-4-8 Response

A consumption tax or value added tax (VAT) is an important part of the solution, particularly where it would help to reduce the disparity between flow-through businesses and C corporations. A modest tax of even 4% could enable significant reductions in the corporate income tax rate. Unfortunately, a tax on consumption alone cannot create the dynamic balance and tax fairness that is needed. Indeed, complete reliance on consumption as in the “Fair Tax” plan is regressive, would require a 30% tax rate, and its half trillion dollar “prebate” program is unacceptable to most Americans (except for the high earners who will completely avoid income taxes, government reporting and oversight).

Both individual and corporate tax reform is needed. If we expand the tax base to include income, consumption and net wealth we can obtain the maximum benefit with very low rates. It is called the 2-4-8 Tax Blend.

For the first time in history, computers and internet databases have enabled the possibility of implementing a net wealth tax that would apply equally to rich and poor. A 5% tax on the $53 trillion in individual net wealth could replace the entire $2.1 trillion in FY 2010 tax revenue.

A more balanced approach might obtain the same revenue by taxing individual net wealth at 2% (excluding $15,000 and qualified retirement funds) and taxing the $12.5 trillion individual income at 8%. By eliminating the 14% payroll taxes (and paying social security and Medicare from general funds) all income earners get to take home 92% of their salary. The consumer power of the working class is maximized. Because the rich and poor would pay the same rates it would also be the fairest tax system on the planet.

Business tax reform is also needed to shift the economy into high gear and to raise some additional revenue. A 4% tax on $10 trillion in sales would yield another $0.4 trillion in revenue and permit reduction of the corporate income tax rate to 8%. This type of significant corporate tax reform is also a politically cognizable tradeoff for the elimination of business tax loopholes (including deferrals of foreign income) which are entrenched in the tax code. All business tax returns would be digital and available to the public in order to encourage both tax compliance and public confidence in business.

Taxes on capital gains, estates and gifts would not be necessary. Similarly, deductions for mortgage interest would not be necessary since the unpaid principal is an offset to net wealth computation. The rates of the 2-4-8 Tax Blend also make it easy to quickly estimate the tax that would be owed for any individual or business.

Eugene Patrick Devany, JD, MPA



    Skip Navigation LinksHome > News and Resourses > In the News Jul-Dec 2012 > NEWS Apr-Jun 2012 > Washington Post: Code Penalizes Success

Spread the word: Please let Congress know you want them to consider the 2-4-8 Tax Blend by simply tweeting "TaxNetWealth.com" or by copying any basic description and sending, faxing, or emailing it to at least one representative from each political party. Many representatives will only accept email through their individual websites.

Copyright 1985 to 2015 by Eugene Patrick Devany