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

Forbes, Jan. 23, 2012

Should Wealth Creation Be Rewarded?

"Do we want to motivate people to create wealth or not?"  is the question posed by Dean Zarris in Forbes op-ed "Should Wealth Creation Be Rewarded?"  He contends:

"It’s the unspoken question, the elephant in the room, [photo from Forbes] when President Obama attempts to whip up the populace with stories of “billionaires paying lower tax rates than their secretaries” and other class-warfare demagoguery."

Zarris believes, "that only investment actually raises the country’s total standard of living, it’s just plain suicidal to erect barrier after barrier to success.  The rational thing to do is to make investment and wealth creation as easy as possible, and just like dangling the proverbial carrot in front of the horse, low tax rates on capital gains need to be a big part of the plan."

The 2-4-8 Response:

The Wealthy Don't Need Welfare (a/k/a Incentives)

Wealth creation (as you describe it) is generally rewarded by high income and subsequent individual wealth accumulation. Your article suggests that Mitt Romney needs “low tax rates on capital gains” as if the ability to keep 85% of his profits encouraged him to work harder and better than he might have if he could have kept only 62% of his profits. In fact, a higher tax rate might have encouraged him to maximize business profits if he really needed to realize the same amount. The fallacy of the position is in the mistaken assumption that the Romney’s and Buffet’s of this world need any government incentive at all to excel at business. For them it is a lifelong sport, and they will play hard without regard to how much they are paid. They will insist on high rewards because they can. The inevitable consequence of their spectacular gain is a bit less for workers in the business. The welfare of the workers is not a major concern of the business since it relies upon the government to care for any exceptional needs of the workers that may come with layoffs or major illness; just as the business relies upon the government to educate and supply low wage workers.

Individual wealth accumulation by a few is no longer necessary since the government has created extraordinary tax incentives in the form of 401k’s and the like, to encourage the masses to save. The collective retirement funds are growing and are more than a sufficient source of capital to fund the risk takers of the future. The real problem is that there is a great deal of capital and cheep money but few businesses are poised to expand and put people back to work – at least in the United States. The fat cats have learned to move money and jobs overseas for the quick buck and that is the real “elephant in the room”.

I believe that the 2-4-8 Tax Plan is the solution. It consists of three taxes: a 2% tax on the Net Wealth of Individuals, a 4% Retail Sales tax and an 8% Payroll/Business Income tax. 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).
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. The concurrent elimination of social security, capital gains and estate taxes and a significant reduction of the corporate income tax rate to 8% should guarantee near universal support for the 2-4-8 Tax Plan from liberals and conservatives alike.

Eugene Patrick Devany, JD, MPA


    Skip Navigation LinksHome > News and Resourses > NEWS Jan-Mar 2012 > Forbes: Wealth Incentives

Forbes Elephant

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