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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

US News, Feb. 29, 2012

Obama, Romney, Santorum, and Gingrich Fall Short on Tax 'Reform'

by Anthony Davies

Antony Davies is an affiliated senior scholar at the Mercatus Center at George Mason University and an associate professor of economics at Duquesne University.

... The candidates' economic policies are a hodgepodge of window dressing, shell games, and irrelevant tweaks. And this includes the president, who has found another bad idea on which to double-down: the alternative minimum tax, or AMT. ... Obama claims that he wants to cut corporate tax rates and end tax credits and subsidies. Buried in the fine print is that he wants to do these things selectively for politically-favored industries. Some industries, like manufacturing, will see tax cuts, and some industries, like oil and gas, will see reduced credits and subsidies. This isn't a plan to end corporate welfare. It's a plan to redirect corporate welfare.

... Most of the political debate involves tinkering with the tax code. ... It is mathematically impossible for the federal government to continue the way it has been going. Forget about cutting a program here or closing a military base there. If we were to shut down the entire federal government save for Social Security, Medicare, and interest payments on the debt, we still wouldn't be able to balance the budget. ... We can't afford any of the programs. That is, unless we're willing to reform Social Security and Medicare ...

2-4-8 Response: Don't Cut Social Security

You are right about the, “hodgepodge of window dressing, shell games, and irrelevant tweaks” but I disagree with your conclusion that we, “can't afford any of the programs. That is, unless we're willing to reform Social Security and Medicare”. I believe we simply have to raise taxes in a way that is Efficient, Simple and Fair.

Consider a wealth tax (Warren Buffett will), a sales tax (Bill O’Reilly will) and eliminate tax expenditures (Simpson and Bowles will). Put the three tax ideas together and you have the 2-4-8 Tax Blend which taxes individual and foreign-owned net wealth at 2% (above a $15,000 exemption), retail sales (or VAT) at 4% and income at 8%. The low rates yield $2.6 trillion – ($400 billion more than FY 2010 federal revenue). 
• Rich and poor would pay the same “2-4-8” rates - making it the fairest tax system on the planet.
• Social Security and Medicare payroll taxes are eliminated - guaranteeing future unrestricted benefits paid out of the general fund for all.
• Earners keep about 20% to 30% more income each year - creating economic mobility and consumer power. 
• Taxes on capital gains, estate transfers and gifts would not be necessary - restoring economic freedom to the investment class. 
• Reduce the corporate income tax to 8% for all types of business - jump-starting the economy. 

The United States is the only developed country that does not have a national consumption (VAT) tax. We must stop blaming Social Security and Medicare for spending problems caused by a grossly unfair tax code. Our $15 trillion debt has grown along with the $60 trillion in private wealth resulting in a concentration of income and wealth in the hands of an unproductive few. Only a tax blend that includes wealth, sales and income can achieve extremely low rates and economic mobility. Let’s stop the, “hodgepodge of window dressing, shell games, and irrelevant tweaks”.

Eugene Patrick Devany, JD, MPA

February 29, 2012

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Copyright 1985 to 2015 by Eugene Patrick Devany