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

Slate, March 26, 2012,
Tax Reform is Really Hard
by Matthew Yglesias

Matthew Yglesias is Slate's business and economics correspondent. His first book, Heads in the Sand, was published by Wiley in 2008. His second, The Rent Is Too Damn High, was published by Simon & Schuster in March 2012.


... The above chart ... should underscore exactly how hard tax reform is. This is often portrayed in DC as if it's primarily a political difficulty, like the problem is simply that politicians lack the gumption to take on the interests behind these tax breaks. But part of what we see here is that many of these really high-value tax breaks are integral elements of American social policy. ... There's a case to be made for scrapping all of this stuff, but with the exception of the deduction for state and local income taxes I don't think you could do any of it without creating some kind of new replacement non-tax policy.

2-4-8 Response:

From 9-9-9 to 2-4-8 to Politically Cognizable Tradeoff

If you include the 14% Social Security/Medicare tax, most workers pay around 30% of their income in taxes. Of course Mr. Romney and Mr. Buffet don’t pay the 30% rate because they rely upon specialized tax expenditures (a/k/a loopholes). They can also delay paying taxes indefinitely or until they choose to sell stock or take a salary.

A few lesser tax expenditures are available to those who itemize their returns but it is the high earners in the higher tax rates that get the larger savings from the same deduction for state and local taxes, charitable contributions, mortgage interest, etc. While it makes a lot of sense to lower tax rates by eliminating popular deductions no one has figured out a way to make it politically palatable. The 9-9-9 plan of Herman Cane was an intellectual step in the right direction because it offered a 9% income tax rate as a political tradeoff for the elimination of common deductions and also expanded the tax base with a consumption tax (which all other modern countries have). Problems with the Cain plan included a failure to raise sufficient federal revenue and the fact that it was regressive - (lowering taxes on the rich while raising them for the poor and middle class).

The 2-4-8 Tax Blend goes a step beyond the Cane plan by adding a net wealth tax to the tax base in order to achieve a progressive tax system with the lowest possible rates. The entire $2.1 trillion in FY 2010 tax revenue could be replaced 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 would take home 92% of their salary. Typical workers would gain unprecedented economic mobility and consumer power. The rich and poor would also pay the same rates for 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. 

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 uniform 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.

Congress should act before the 99% get angry.

Eugene Patrick Devany, JD, MPA


    Skip Navigation LinksHome > News and Resourses > In the News Jul-Dec 2012 > NEWS Apr-Jun 2012 > Slate: Tax Reform is Hard

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