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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 Daily Caller, Feb. 24, 2012

The ‘Fair Share’ Myth

by Joseph F. Petros III

Joseph Petros is an associate at the law firm of Warren and Young PLL in Ashtabula, Ohio. He served as executive editor of the Notre Dame Journal of Law, Ethics & Public Policy. He opines:

... The president has deliberately framed his tax argument in terms of fairness, demanding that the rich simply pay their “fair share” ... the president cannot run on the true substance of his proposals, which demand that the rich contribute much more of their income than everyone else. ... He has taken advantage of the complexity of the tax code to mislead the American people on a subject they do not fully understand, and few in the Republican ranks have directly called him out on it.

... If Republican candidates, presidential and congressional, want to gain any traction with the electorate this year, they must address this fairness myth head on. ... Here’s an idea: raise the rates on dividends and capital gains to parallel the regular income rates, but totally eliminate the corporate tax. ... It would give corporations a huge incentive to reinvest their profits in further growth, and it would give investors a reason to prefer long-term investment over short-term payoff. ... It is no coincidence that candidates have been most successful this election season when they have talked about true tax reform (remember 9-9-9 fever?)

2-4-8 Response

It’s, “time to explain the truth to the American people.” All right, the tax code is not fair. The disparity in both income and accumulated wealth of the well-to-do has grown along with the $15 trillion national debt. The economic mobility (and purchasing power) of most Americans has diminished. High unemployment is a major drain on the market. Corporations don’t reinvest more of their profits because the customer base is not there.

Alas we should simply be nostalgic about 9-9-9 fever. It would be fun to, “call the president’s bluff and propose a plan for tax reform that truly is fair.” I invite you and Mr. Obama to consider the 2-4-8 Tax Blend.

The 2-4-8 Tax Blend broadens the tax base by taxing individual and foreign-owned net wealth at 2% (above a $15,000 exemption), retail sales at 4% and income at 8%. It would yield $2.6 trillion – ($400 billion more than FY 2010 federal revenue). The tax blend is progressive even though rich and poor would pay the same tax rate. Diverse individuals and groups from Bill O’Reilly (a/k/a the Factor) to Herman Cane and the Bipartisan Policy Center support a national sales tax (between 3 and 9%) as a necessary component of tax reform. Periodic (event-based) taxes from capital gains, estate and gift taxes would not be necessary because of the wealth tax. The concurrent elimination of payroll taxes and a significant reduction of the corporate income tax rate to 8% should merit near universal support from social liberals and business conservatives alike. The winners and losers (-if there be any) do not follow any traditional partisan or political spectrum.

Please think outside the box before you react. Try to contrast a 30% income tax with an 8% income tax joined with a 2% wealth tax for each of the next 11 years. The latter combined income-wealth tax would permit an individual to save and keep at least 22% more salary each year. Now that’s real economic mobility-especially for young people starting out.

Corporations would feel less of a need to influence politicians once tax incentives are off the table. How would an 8% corporate income tax affect jobs and the economy? Those answers are better left to your talents and dreams for a brighter future.

Eugene Patrick Devany, JD, MPA



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