Tax Net Wealth

ii iv viii	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.	Wealth 0% 0.5% 1% 1.5% 2%	Income 28% 23% 18% 13% 8%
		Business C - Corp	4% VAT 8% Income

TownHall

Debunking the 'Conservative' Argument for a Wealth Tax

Daniel J. Mitchell, a top expert on tax reform and supply-side tax policy at the Cato Institute, has authored "Debunking the 'Conservative' Argument for a Wealth Tax", Jan. 17, 2012.

He opines:

... sometimes itâ€™s necessary to counter absurd arguments, precisely so they donâ€™t gain a foothold among otherwise sensible people. Thatâ€™s why itâ€™s time to write about the economics of a wealth tax.

The wealth tax is really a tax on saving and investment. And the tax rates are likely to be very high. Indeed, if the economy is sour and portfolios are growing at less than 3 percent, the tax rate can be more than 100 percent! You donâ€™t have to be a wild-eyed supply sider to conclude that there may be some negative effect on incentives to save and invest. [responding to a suggestion for a 3% tax on net wealth].

248 Response: There is a Conservative Case

There can be a conservative case for a wealth tax. In August of 2006, I proposed the 2-4-8 Tax Plan to the Presidentâ€™s Advisory Panel on Tax Reform which consists of three taxes: a 2% Net Individual Wealth tax, a 4% Retail Sales tax and an 8% Payroll/Business Income tax.

Please try to think outside the box before you react. The 2-4-8 Tax Plan applies the exact same rates to the rich and poor. There are no deductions, no tax brackets and no tax credits. There is no favoritism. It 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).

A 2% wealth tax applied to all, is a conservative trade off for an 8% individual and corporate income tax.

248 Response to "Constitutional" Comment

Your constitutional analysis oversimplifies the issue of what is income and when must it be taxed. In the 2000 Symposium on Wealth Taxes by Tax Law Professors David Shakow and Reed Shuldiner, income is defined as â€œthe sum of consumption and any change in net worthâ€ Tax rates can be applied to any base (income [however computed], consumption and/or net worth) to raise government revenue.

Contrast a 48% annual tax on income verses an 8% tax on income this year combined with an additional 2% each year the money is saved (not consumed) for the next 20 years. There is nothing unconstitutional about the multi-year computation of the tax that transcends your dispositive notion of a â€œliquidity eventâ€ - (a term which is not in the constitution).

248 Response to "Retirement" Issue

The â€˜fair marketâ€ aspect of the valuation seeks to limit the scope of assets subject to taxation of those items for which there is a normal and customary market. For reasons of custom, public policy and/or legal restriction there is no market for ones kidney, a personal copyrighted item not put up for sale, a wedding ring during the term of a marriage, personal clothing, food, controlled substances, family bible and similar items. Retirement plans subject to strict government control, such as an IRA or 401k plan, would also be exempt from taxation until a proper withdrawal is made. Thus, most retired people would do well.

248 Response to "Fair Tax"Proponent

Ill-considered proposals to impose a wealth tax only the very wealthy are just as inequitable as the so called â€œFair Taxâ€ attempt to impose a national sales tax which would devastate the poor. The Fair Tax on â€œnew goods and servicesâ€ requires a rate of about 23% (tax exclusive) [or 30% tax inclusive]. The proposed adjustment for basic necessities also requires the creation of an almost half trillion dollar entitlement program to send monthly welfare (I mean â€œrebateâ€) checks to most Americans.
An 8% corporate tax rate under the 2-4-8 Plan should accomplish your "tax haven" objectives.

Home > News and Resourses > NEWS Jan-Mar 2012 > TownHall: Constitution, Retirement

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.