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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

The Kansas City Star, Feb. 4, 2012

Commentary: Obama's corporate tax charade

by E. Thomas McClanahan

Mr. McClanahan opines:

... [President Obama] said to businessmen: “Ask yourselves what you can do to bring jobs back to your country, and your country will do everything we can to help you succeed. … We should start with our tax code.” Whoa, I thought. He’s going to push for corporate tax reform.

... Here’s Obama himself explaining it: “Companies that choose to stay in America get hit with one of the highest tax rates in the world. It makes no sense, and everyone knows it. … So let’s change it.”

... Given the sluggish economy, the challenge for policymakers is how to move business psychology from fear of loss to fear of losing opportunity. Reforming corporate taxes would be a huge lift to the “animal spirits” of entrepreneurs.

... More than that, it would be a gateway to wider tax reform — to the lower rates and broader base suggested by a presidential commission in late 2010.

2-4-8 Response:

You are correct about President Obama’s $40 to $50 billion tax on those earning above $1,000,000 as amounting to “more deductions, loopholes and tax-code complicators”. It is an attempt to redistribute wealth to his favored programs (i.e. green energy and selective manufactures). You are also right in the country’s need for, “a gateway to wider tax reform - to the lower rates and broader base”. I would be remiss if I did not invite you to consider the 2-4-8 Tax Plan.

1) Make all business tax returns publicly available online for free. Cheating will be substantially reduced. Business contributions (political or otherwise) will be public and become part of the business’s reputation. The market (not the government) will more easily and transparently identify the businesses which are productive.

2) Adopt the 2-4-8 Tax Plan which is a simple mix of three flat rate taxes. Tax 2% on individual net wealth, 4% on retail sales and 8% on individual and corporate income. The exact same rates apply to the rich and poor. There are no different tax brackets, deductions or credits, and no favoritism. The three taxes would yield about $2.6 trillion per year (slightly more than the current combination of Income, Social Security, gasoline and other federal taxes and fees).

At the risk of over simplification the process of upward mobility can be illustrated by contrasting a flat rate income tax of 28% versus a combined 8% income tax and 2% wealth tax for each of the next ten years. The latter combined tax would permit an individual to keep 20% more salary each year and tax another 2% of the amount not consumed for the next ten years. If one saved the 20% for 5 years it would be like having a year’s of salary in the bank on top of what might have otherwise been saved under a 28% flat tax rate (conservatively assuming the 2% wealth tax was offset by investment interest).

It is hard to imagine anyone that wouldn’t welcome a 2% tax on net wealth and a small 4% sales tax, in exchange for drastically reduced 8% individual income tax rate. Even Bill O’Rielly (a/k/a the “Factor”) supports a national sales tax (of 3%) as part of much needed tax reform. The concurrent elimination of social security, capital gains, estate and gift taxes; and a significant reduction of the corporate income tax rate to 8% should guarantee near universal support from social liberals and business conservatives alike.

3) More jobs through improved business competition, restored upward mobility, problem solved!

Eugene Patrick Devany JD, MPA



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Copyright 1985 to 2015 by Eugene Patrick Devany