A Modest Taxation/Deficit Reduction Proposal

Everyone complains about the Tax Code and The Deficit, but no one in Washington is willing to do anything about it. Here is a simple solution: soak The Rich and Corporations with a truly Progressive Tax system, just like Republican Theodore Roosevelt and his cousin FDR later once did to save the Country from the greed of The Filthy Rich.

Personal Taxes

Federal Income Taxation

1)     Income Taxes are based on total calendar year Household Income from all sources, with no distinction between wages and passive income.

2)     All deductions are eliminated, with two exceptions: the personal and dependent deduction is doubled, with a cap of three (3) dependents, and charitable contributions (only for households with gross income in the bottom 75th percentile).[1]

3)     The Tax Rate for Households with total income at or below the Median Income is Zero percent (0 %).

4)     The Tax Rate for Households with total income between the Median Income and $100,000 is Twenty percent (20%) on all income above the Median Income.

5)     The Tax Rate for Households with total income between $100,000 and $250,000 is (4) above for the first $100,000, and Twenty-five percent (25%) on all income above $100,000.

6)     The Tax Rate for Households with total income between $250,000 and $1,000,000 is as proscribed in (5) above for the first $250,000 and Thirty-five percent  (35%)  on all income above $250,000.

7)     The Tax Rate for Households with total income between $1,000,000 and $10,000,000 is as proscribed in (6) above for the first $1,000,000 and Fifty percent (50%) on all income above $1,000,000.

8)     The Tax Rate for Households with total income above $10,000,000 is as proscribed in (7) for the first $10,000,000 and Seventy percent (70%) on all income above $10,000,000.

Federal Inheritance Taxation

Much like the tax treatment with Total Income, the Inheritance Tax Code is as follows:

1)     The first $1,000,000; Tax Rate Zero percent (0%).

2)     $1,000,000 to $5,000,000; Tax Rate Twenty-five percent (25%) on everything above $1,000,000.

3)     $5,000,000 to $10,000,000; Tax rate up to $5,000,000 as in (2), over that, Fifty percent (50%).

4)     Over $10,000,000; Tax rate up to $10,000,000 as in (3), over that, Seventy-five percent (75%).

Comments

The message in this proposed Federal tax code is simple and clear: obscene income and wealth are not acceptable on a finite planet with finite resources and most people struggling to survive. You can still steal it, you just don’t get to keep it or pass it on to your greedy descendants.

All assets are determined by the IRS before the new laws take effect and frozen within US borders until the laws are implemented. Any citizen who chafes at The New Rules here is free to leave the Country, they just forfeit 50% of all their assets to the IRS on the way out and we send them a Hallmark Farewell and Best of Luck in your new home card.

The penalty for deliberate Tax evasion is five (5) years in a real prison, in the general population, so help you God.

The States

A consensus on my above proposal could be implemented in just one National Election cycle, all that would be needed is for We The People to wake up and freely elect a 2/3rds Progressive Democratic majority in the House and Senate and a Progressive Democratic President with some balls. Similar reforms could be implemented in Blue States if their residents overthrew the corrupt State elected officials owned on-the-cheap by local special interests and elected real reformers.[2]

Corporate Taxes

Alright, you get the idea; I bet you could write this part yourself. But it’s my Dell Inspiron Notebook…

1)     Right-wind Supreme Court Justices’ fantasies to the contrary, Corporations are not People. In a modern Democracy, they are publically chartered organizing principles intended to provide safe and useful goods and services at an honest price to the public and well-paid jobs and benefits to their workers for The Common Good—not to enrich the few at the expense of the many.[3]

2)     Given (1), with the exception of a handful of environmental and real expenses like infrastructure/facilities, plant modernization, and wages/benefits deductions, no deductions or write-offs for anything, especially Senior Management compensation.

3)     Corporations with Gross yearly Earnings below the median pay no Federal Taxes, over the median to $50,000,000, 15%; $50,000,000 to one billion dollars 25%; over one billion dollars, 35% of net earnings.

4)     The penalty for deliberate Tax evasion is five years in a real prison, in the general population, for every Senior Manager and member of The Board of Directors, so help you God.

5)     Any Corporation can relocate out of the Country; they just forfeit 75% of their material assets and their final year net earnings to the IRS, and place in escrow 100% of their last year salary/benefits costs for the benefit of their displaced workers. We send them a Hallmark Farewell and Best of Luck in your new home card.

6)     The penalty for deliberate evasion of (5) is 10 years in a real prison, in the general population, for every Senior Manager and member of The Board of Directors if total assets are less than one billion dollars. If greater than that sum, the penalty is Life in a Maximum Security Prison without chance of parole or Death by televised Public Execution for every Senior Manager or Board member with prior knowledge of the attempt to flee the Country with our assets.

The Deficit and National Debt

It is assumed that the new Tax Code will provide enough money to run the Country at current spending levels with a surplus, if not, marginal rates with the same progressivity will be adjusted up to 100% if need be, to balance the budget. If the confiscation of all assets of the Filthy Rich and to a lessor extend, just most of the assets of the Way Too Rich are not sufficient, across the board budget cuts for all Federal Programs will be automatically implemented.

To pay off the national debt, an ongoing Wealth Surtax of five percent (5%) of actual Net Worth per year for every citizen with a net worth in excess of $1,000,000 will be implemented until such time as the National Debt is paid off or every citizen with a net worth over $1,000,000 has paid everything they own above that amount to the IRS. In that event, the Federal Government will announce that it will either stop paying any interest and all debt will be converted to interest-free instruments, or it will default on any debt owed to an entity which does not accept the no-interest option.

Some Final Thoughts

I’m pretty confident that I will not be getting a call from the Obama Administration after we win the November Election to discuss my modest proposal. The point of the exercise is to demonstrate that it is a lack of political will and consensus that prevents us from living in not a utopia but at least a functional modern Western Democracy like our Canadian neighbors to our north. I do not envy Barack his riches or beautiful family. I cannot ask him to make or even risk the sacrifice that JFK and MLK Jr. made to try to save America. They were true Leaders, who saw their purpose as transcendent and more important than even their precious lives. Barack is a smart guy, but he is no JFK or MLK, Jr. He will ineffectually and half-heartedly try to save the Country, but in the end he could care less about us and is betting that his wealth will protect him from the coming storm. I am confident he will lose that bet, but you and me—my children and grandchildren and yours—will die sooner and badly, though maybe not worse, than will he and his loved ones. Maybe he can finish his second term, pass a few meaningless incremental laws like the convoluted “Health Reform” Law he wasted all his political capital and most of his first two goddamn years in office dicking around with, sign another book deal, and make another few million dollars before this all comes crashing down. But like me, I bet he will not die peacefully and an old man. The time has run out, the bill has come due. The Have Nots will soon have nuclear weapons; they have already brought the fight to our shores and demonstrated that they have had enough.

Though I am a Zen Buddhist, Jesus was right about at least one thing: Love is not the key to Heaven; it is the only way the world can work. The hateful, greedy Filthy Rich and Corporations, abetted by their hand-maidens, The Republican Party, have broken our Nation, Economy and Home World. They are not going to let us fix it; we lack the will to force them by ballot or at gunpoint to do so. Obama blathers about bi-partisanship even as they bend him over and rip off his pants. This is not an honest debate among well-meaning reasonable people; this is a mortal struggle between the forces of Reason and Madness; between Good and Evil. In the past our species has taken on such challenges and prevailed. Today I fear we lack the will, courage, and stomach to do so.


[1] You can still have nine children and let Grandma live with you, you just only get a tax deduction for three (3) dependents. Poor Hispanics and others (Mormons and members of other culturally archaic Patriarchal Fertility Cults for example) with more than three children can have them, just not on the government’s nickel. The Filthy Rich can still have their Foundations and “Look How Generous I Am” charity projects, just for the glory, again, not on the government’s nickel.

[2] The first part is not a fantasy, it happened after the Great Depression when FDR and my Party saved the Country from the greed of the Filthy Rich and Corporations. As for the second part: I say Blue States because I assume we will eventually have to re-litigate the already fought and won Civil War, only this time finish the job. We evacuate Blue State supporters; then annihilate the Red States, killing every single Red State supporter or sympathizer once and for all—like we could and should have done in the 1860s when Union Generals Grant and Sherman were burning The South to the ground and well on their way to finishing the job; and lastly, rebuild and re-populate the devastated former Red States with self-volunteered functional citizens. Unfortunately for us and our Union 150 years later, these great generals and their mighty armies reinforced with tens of thousands of freed Southern slaves were stopped by President Lincoln’s misguided compassion, preserving the historically archaic ignorant/racist/anti-intellectual-science-reason-facts-reality/religious fundamentalist culture we are still having to fight every election. We don’t have to educate/enlighten/convert them, we just have to have the will to either throw them out of The Union through forced Secession or kill them. I personally have a preference, but freely acknowledge it may just be the Philly City Boy Yankee in me or the fact that I suffered over a decade among these unenlightened and ignorant Red Neck Flat Heads while in Indiana in late High School (Lawrence, IN) and an undergraduate and graduate student at Purdue University (West Lafayette, IN).

[Please note that I originally published this before the November 2012 election. Now that We The People  have rejected Romney/Ryan decisively, I’m prepared to simply propose a State-by-State plebiscite whereby any Red State can vote by two-thirds majority to voluntarily secede from the United States. After a two-year transition to allow for Blue State sympathizers to move out and all Federal assets to be removed, these States are out. They can form a Third World Theocracy, maybe call it Jesus Land…]

[3] For an extreme and wonderful illustration, see how Corporations act and are treated in Japan, a nation whose people we dropped two atomic bombs on at the end of WW II killing hundreds of thousands.

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