5. A Fair Tax Code

A Fair Tax CodeA complete reformation and simplification of the United States Tax Code to require ALL individuals and corporations to pay a fair share of a progressive, graduated income tax by eliminating loopholes, unfair tax breaks, exemptions and unfair deductions, subsidies and ending all other methods of evading income taxes. 

The current system of taxation unjustly favors the wealthiest Americans and corporations, many of who pay fewer taxes to the United States Treasury than citizens who earn much less and pay a much higher percentage of their incomes in taxes. Any corporation or entity that does business in the United States and generates income from that business in the United States shall be fully taxed on that income regardless of corporate domicile or they will be barred from earning their profits in the United States.

This will allow honest companies and individuals who pay their fair share in income taxes to take over those markets in the United States economy formerly held by income tax cheats.

Businesses and individuals that pay taxes in other countries will no longer be permitted to use that excuse to justify their failure to pay federal income tax in the United States if they obtain benefits from doing business in the United States.

Corporations that create jobs in the United States will be rewarded by the tax code and corporations that remove jobs from the United States will be penalized by the tax code. The substitution of lower capital gains tax rates for graduated income tax rates shall be eliminated. This $4 billion a year “hedge fund loophole” which permits certain individuals engaged in financial transactions to evade graduated income tax rates by treating their income as long-term capital gains which are taxed at a much lower rate (approximately 15%) than income tax.

“Our new Constitution is now established, and has an appearance that promises permanency; but in this world nothing can be said to be certain, except death and taxes.”  -Benjamin Franklin, 1789.

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Showing 114 reactions

chuck gregory commented 2012-03-11 10:27:17 -0400 · Flag
Actually, Dorothy, sales taxes (which is what the Fair Tax is) are the worst form of taxes in terms of equitability.

Consider Dick and Liz Cheney’s 2000 income for example: $14,000,000. And compare it with my household’s for that year: $32,000. Dick and Liz ate just as much food, drove just as much, bought as much clothing, gifts, newspapers and used just as much electricity and telecommunications access as I did— but their tax burden for all those purchases was less than one four- hundredth of mine! If they’d bought a Learjet and paid 9% tax on it (very unlikely, tax breaks for such purchases being what they are), they would have gotten into the ballpark with me, but. . .

Another problem I have with a Fair Tax is that it feeds into the “I work for my money, I pay taxes; my money works for me, I don’t pay taxes” Romney ethic. It allows the Cheneys to avoid any tax whatever on capital gains. Under the Fair Tax, they get even richer!

A third problem is that since the tax would be based on sales, any time there was a recession, there would be a huge drop in tax revenues, since hundreds of millions would have to cut their spending. True, the Cheneys wouldn’t have to cut back, but there are too few of their type to make a difference in the revenue picture. And then where will the money come from?

How can we possibly afford to invest our money in schools, roads, safe travel, justice or even national defense if the 1% who already have 40% of the income and 70% of the wealth don’t have it taxed?

As I reported before, the Fair Tax is being sold to you by the same type of guys who believe they have the right to buy justice for themselves in Texas (google Bob Johnson Texas developer), and they’ve done a number on you.
Rodger Malcolm Mitchell commented 2012-03-11 10:10:44 -0400 · Flag
Your comment has two flaws:

1. There never can be a “fair” tax. See: http://rodgermmitchell.wordpress.com/2010/12/16/which-taxes-are-fairest-which-taxes-are-least-fair/

2. Federal taxes are unnecessary in a Monetarily Sovereign government, as they do not fund federal spending. See: http://rodgermmitchell.wordpress.com/2010/08/13/monetarily-sovereign-the-key-to-understanding-economics/

Rather that opting for a “fair” tax, you should opt for tax elimination.

Dorthy Toto commented 2012-03-11 10:05:29 -0400 · Flag
@Nathan Dunn
You have the right idea, but are missing a critical point.

Most of the current so-called “tax reforms” are nothing more than camouflage, designed to keep the current income tax system in place so the entrenched special interests and corrupt politicians can continue to enrich themselves off the misery of the greater public. We have to recognize that any faux reform that keeps the income tax in place is nothing but a license for the continued plunder of the American public.

That leaves a sales tax as the most reasonable way to proceed, and one our Founders understood and, reluctantly, accepted. The question is how to implement it. The FairTax has spent more than $22 million studying the most efficient and fair means of doing so!!! They do have an answer to the questions about how the tax will effect the poor (the prebate untaxes the poor on the basic necessities), Congressional corruption (take the power away from Congress, and their corruption won’t matter), growing the economy (explosively under the FairTax), as well as the plethora of others.

Check it out at www.ohfairtax.org

The FairTax: Once you understand it, you’ll demand it.
Nathan Dunn commented 2012-03-11 00:30:28 -0500 · Flag
I’m considering running for a delegate spot, so I’ve been going through the declaration’s suggested points, item by item, and writing mini-essays. I’m posting them all on a blog at http://99essays.blogspot.com
The purpose of the blog is solely to organize my thoughts and discussions on each topic.
Here’s my entry on this topic:

Wow, I almost don’t even want to tackle this one. There is a ridiculous number of conflicting ideas out there. They all have their pros and cons, on paper, but who knows what’s actually going to work? And what does “fair” mean?

First things first, let’s look at what’s proposed here. We’re looking at a progressive income tax (which is what we have now). It says, “eliminating unfair tax breaks, exemptions and unfair deductions [and] subsidies,” so I’m not sure if we’re talking about pruning the exemptions, etc, or eliminating them altogether. This also seeks to have corporations pay income tax the same as individuals do, and to have all income treated the same.
So, I think that what this proposes is essentially the system that we have now, but with no way to reduce the amount of tax that you owe, and everyone has to pay the same graduated rate on each tier of income, regardless of its source. In simpler terms: if you get money, you owe tax on it.
Generally, I’m OK with that.

When we talk about a “fair” tax, that can mean lots of things. To me, I think that we’re talking about a system in which everyone shoulders the burden of having a government, but no one is overburdened by it. If any of your citizens cannot afford basic living expenses because of taxation, there’s a problem with the tax.
Many people favor a flat tax — one percentage that everyone pays regardless of income level. That sounds fair. My unease comes from the natural fact that in order to collect the same amount of revenue that we do now, the lowest earners would necessarily have their tax rate raised. In some cases (and I probably fall into this category), that tax rate increase would be the difference between affording basic living expenses and not. That should be unacceptable regardless of where you fall in the spectrum.

There are people who propose getting all revenue from other taxes and doing away with income tax altogether. I could find myself in this camp. For instance, if income tax was eliminated, and sales tax was raised, a person would be taxed more on their lifestyle than their income. The sales tax would have to become much more complicated, however, which could lead to exactly the same problems that we have now.
You would need food to be untaxed (as it is now), essentials (such as clothing and toiletries) either untaxed or mildly taxed, housing mildly taxed, and luxuries highly taxed (which could vary depending on the type of luxury — electronics might be a mid-range tax, but a blimp would be very highly taxed). With all of these categories, who determines what product falls into which category? How do you ensure that the proper tax is paid when an item is bought? What happens when people stop buying blimps because they’re taxed at 300%? Where does that leave the blimp industry?

So, here’s my biggest problem with this whole thing: I’m not an economist. I can read about different plans all day long — I still have no idea what’s going to work. I’m really leaning toward thinking that instead of demanding sweeping reform and outlining a plan, we instead demand reform, period. Get the ball rolling.
We need incremental changes. Implement parts of one plan, and see how they work. Adjust as necessary. Implement some other bits and pieces. Adjust. Implement, adjust. I’m fine with starting with eliminating loopholes. That seems like it’s just common sense.
Anything beyond that needs to be taken slow and measured against results.
@AlexMango2 mentioned @ConnectOCCUPY link to this page. 2012-03-04 22:23:06 -0500
5. A Fair Tax Code http://t.co/pS3xo7nS vía @ConnectOCCUPY---Igualito que en México, los ricos evaden, los pobres pagan a huevo o cárcel.---
Nathan Duncanson commented 2012-02-29 20:12:55 -0500 · Flag
@Dorothy Toto:

You have incorrectly claimed that I’m promoting the taking of value from those who produce it and giving it to those who did not.

I am promoting the idea that that which no one produced (land, natural resources) or which the community as a whole produces (special privileges from the government) be owned and managed as public monopolies for the benefit of everyone.

I believe everyone who actually produces value, such as the crops raised by a farmer, the products produced by a craftsman, or the paychecks received by teachers, and others whose mental or physical labor adds to the human wealth, should be able to retain the full amount of value they create.

They should not retain the value from the underlying resources or the value from their inputs – unless they have first compensated their supplier or the community. But all the value they add to their inputs should be theirs to keep – not taxed away by the government, not given to their employer, and not given in interest payments to the bank.
Dan Flemming commented 2012-02-29 00:33:55 -0500 · Flag
Well there are at least 4 choices for currency, 1) Fiat borrowed from banks through the FED 2) Fiat greenback issued from the Treasury that is not borrowed simply issued 3) Gold backed dollar 4) Basket of goods backed dollar.
Jamie Swanger commented 2012-02-28 17:34:25 -0500 · Flag
Now, as far as “gold standard”, entitlement class, and other such things, there is misinformation.

Whether a “monetary system” is backed by a commodity (gold) or the government (the current dollar) does not matter. What matters is if a person or society is willing to accept the currency as trade for services rendered or for items.

Backing currency by a commodity can be worthless if nobody is willing to accept the currency for a trading tool. Currency is actually an IOU, that is easily transferred from one person to another person.

Those that did not need it, but wanted it anyways would just find ways around it by giving their wealth to their children so as to game the “means test” anyways, and then you would have to start passing rules to check the wealth of offspring, siblings, friends, and maybe even pets.

Means testing is not the way to go, but set a certain amount that everybody gets based on basic living standards and such.
Rodger Malcolm Mitchell commented 2012-02-28 17:22:54 -0500 · Flag
Tim, you said what you said. Don’t send me to your diatribe.

If you didn’t mean, " Rothschild’s decision to take possession of ALL the gold on the planet" then why did you say it? If you did mean it, you should buy the bridge I offered you.

The old “Rothschild-taking-over-the-world” crap is merely a cover for antisemitism. This BS about the Rothschild family has been going on for at least 100 years. Don’t you get tired of spreading manure?

Jamie Swanger commented 2012-02-28 17:21:11 -0500 · Flag
Some need to reread the first paragraph. It calls for a simplification of the tax code and a progressive tax system.

That means tax brackets. I do think that it can be refined further. For example

On the first 15,000 of income, after deducting for dependents, no tax is paid.
On the second 30,ooo, 5% is paid in taxes.
On the 3rd 60.000, 10% is paid in taxes.
etc. etc. etc.

Now, let’s say each person, is allotted 15,000. A family of 3 would be allotted 45,000.

Let’s say household income is 125.000. 45,000 is not taxed, 30,000 is taxed at 5% and 50,000 is taxed at 10%.

SS/MC, could be reformed, but for the most part, it must be put in a separate fund, that can not be used for general spending.
Timothy Price commented 2012-02-28 17:01:51 -0500 · Flag
Rodger Malcolm Mitchell commented: It isn’t an unusual remark to come form someone who would rather talk that read what I recommended.

Could take your two days to read it. Go ahead, never hurts to be informed.
Rodger Malcolm Mitchell commented 2012-02-28 16:32:19 -0500 · Flag
Dan Flemming said, ". . . Rothschild’s decision to take possession of ALL the gold on the planet. Take gold out of circulation… by them owning it all. "

If you believe that, there is a bridge in Brooklyn I would like to sell you. Just send me some gold and you can own that bridge.
Dorthy Toto commented 2012-02-28 11:07:54 -0500 · Flag
While I am sorry for the positions which some find themselves, what did you expect. Social Security and Medicare were never really intended to help people like you.

The purpose of SS/MC was to create an entitlement class that depends upon government payments and, as a consequence, will vote as directed by the party promising to maintain or increase those payments. As part of that system, individuals such as yourselves must first be “stripped” of the means of taking care of themselves. This is done by using the tax code to drain resources that could be used for things like personal (rather than business provided) insurance, investments to guarantee support after retirement, and estates to pass on to children to help them escape the clutches of government dependency.

Right now, we have just under 50% of the population who is dependent upon government payments, and the Washington establishment is working overtime to push it to the magic 55% level where they need never worry about a “political revolt”.

If the system isn’t broken soon, it will be too late to keep America from becoming a Nation of serfs, feeding at the trough of government, and doing exactly what they are told out of fear of losing “entitlements”.
Timothy Price commented 2012-02-28 10:57:29 -0500 · Flag
Dan Flemming commented:
“Roger; Yes, I am worried that any move to a gold standard would mean only people with gold will be able to spend or have money.”
That is the premise put forth for the Rothschild’s decision to take possession of ALL the gold on the planet. Take gold out of circulation… by them owning it all. Please read this great series.
Fortunately for us, and unfortunately for them, there is apparently enough shared information now to topple them.
Dorthy Toto commented 2012-02-28 10:20:07 -0500 · Flag
Now there is an idea that hasn’t come up before… give the State total control of all the land and means of production. Take from anyone who produces value and “share” with everyone.

Abolish those pesky right to property laws, so that “no one” has ownership, and only the State can determine how and to what use land and other resources shall be committed. Let the centralized government, filled with hard-working, uber-intelligent, self-sacrificing individuals committed to advancing the lives of others make all the decisions, take all the responsibility, and allocate everything in the “fairest” way possible. (While taking nothing for themselves… just like Congress now)

Even though it may look like the original Mayflower compact (the one that almost caused fatal starvation), the Fascist regimes of Germany and Italy, the failed Poliboros of the Soviet Union, the Chinese Central Committee under Mao (the current on is introducing free market elements), the brutal starvation in dozens of African countries throughout the last 60 years, the bloodbath of the French Revolution, not to mention the Killing Fields of Cambodia, I am sure that this time Nathan Duncanson’s ideas of collectivism will work out just fine.

Just like they did in …….. (can’t think of anyplace, but I’m sure there must be somewhere, sometime, that collectivism/statism worked out pretty well.)
Dan Flemming commented 2012-02-28 09:48:11 -0500 · Flag
Roger; Yes, I am worried that any move to a gold standard would mean only people with gold will be able to spend or have money. Therefore, I have been accepting ideas on Modern Monetary Theory (MMT). It seems simple and obvious that the US and Other sovereign governments should print their own money instead of being beholden to Big New york Banks.

Chuck: Yes, we need to force Lawyers to follow the intent of the tax law instead of coddling them and allowing them to take advantage of the system with deferred taxes and carried interest taxes (otherwise known as tax loopholes and lobbyist advantages).
Rodger Malcolm Mitchell commented 2012-02-28 08:25:53 -0500 · Flag
Before you debate taxes, you really should understand Monetary Sovereignty ( http://rodgermmitchell.wordpress.com/2010/08/13/monetarily-sovereign-the-key-to-understanding-economics/ ) Otherwise your proposal makes no sense at all.
Jim Britt commented 2012-02-28 06:56:51 -0500 · Flag
Because Medicare only pays 80% I can not retire until the day I die thus I will never get to use MY 401K money. My current insurance pays 100% after I pay a $2,250 deductible and my wife’s expenses exceed $50,000 a year meaning my out-of-pocket would be $10,000 a year, 1/2 of my social security!

I blame both democrats and republicans; the democrats allow those with too many kids to not pay income taxes; instead they get money back they never paid via “earned income credit”, $1,000 per child credit, etc. They support welfare bums who I pay the rent for and I buy groceries for while they drive nice cars and enjoy 50" plasma TVs!

Social Security is a JOKE; had all the money I paid into that bottomless pit been going into a 401K, I would have MILLIONS and COULD retire.
chuck gregory commented 2012-02-28 06:17:53 -0500 · Flag
Jim, I’m three years past my retirement age, and I can’t touch my 401K either, unless I quit my job. Medicare has nothing to do with it. Vermont is working on solving your problem right now with a universal, affordable, single payer health care plan. You can bet the big boys are trying to kill it. They’re funneling their opposition money to a former aide to retired senator Jeffords— and legally, she doesn’t have to disclose who her backers are.

Dan, Jack Strauss, a hedge fund manager, made $9 billion in 2010 and hasn’t paid a penny in income tax. Thanks to the Republicans under Bush, they passed a law that treats hedge fund managers’ income as capital gains, unlike that of a bank clerk, who performs the same money-shuffling function. The “carried interest” part of the law allows him to take tax-free “loans” on it. And should it still be untouched when he dies, his children (if any) will fight an estate tax to the death. Then the mantle of “job creators” will pass to them, and the Republicans will fight on their behalf for even lower taxes.
Jim Britt commented 2012-02-28 05:27:59 -0500 · Flag
My big beef is that even though I am legal retirement age I can’t touch my 401K unless I quit my job! My wife has major health problems and I can NOT retire because I have to have insurance… Medicare is horrible.

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