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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

Politico, Feb. 15, 2012

Obama, in Wisconsin, talks tax reform

by Donovan Slack

Mr. Slack opines:

... he started his trip here, at a Master Lock factory that he praised in his State of the Union address for bringing 100 jobs back from China. He used the factory as an example of his efforts to eliminate deductions and loopholes ...

... “Right now, companies get tax breaks for moving jobs and profits overseas. They’re taking deductions for the expenses of moving out of the [country],” he said. “Meanwhile, companies that choose to stay here, they get hit with one of the highest tax rates in the world. That doesn’t make sense. Everybody knows it doesn’t make sense. … So my message to Congress is, ‘Don’t wait.’”

Republicans have already lambasted the proposal and the continued deficit spending it includes, calling Obama’s plan for encouraging domestic manufacturing growth misbegotten.

2-4-8 Response: Tax Reform and Manufacturing

"He used the factory as an example of his efforts to eliminate deductions and loopholes for companies ..." even though the tax code already has a manufacturing deduction and loophole that costs the taxpayers about $171 billion per year. It even applies to the manufactures of software and movies. We need real tax reform and we need to have the same rules apply to all.

If we expand the tax base we can we can lower the income tax rate, maintain progressivity and have the same brackets for the rich and poor. The solution is the 2-4-8 Tax Blend which broadens the tax base by taxing 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 2011 federal revenue). The tax blend is progressive even though rich and poor would pay the same rates. The concurrent elimination of payroll, 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.

Please think outside the box before you react. Try to contrast a 30% income tax (the Buffet Rule rate or the rate paid by the middle class when the payroll tax is included) 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 keep 22% more salary each year. If one saved just the 22% extra take home for 11 years it would amount to several years’ salary in the bank - a very nice retirement fund, (conservatively assuming the 2% wealth tax was offset by 4% investment interest). Now that’s real economic mobility!

How would an 8% corporate income tax affect jobs and the economy? Those answers may be better left to your talent and imagination - and not to Mr. Obama


Eugene Patrick Devany, JD. MPA 



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Copyright 1985 to 2015 by Eugene Patrick Devany