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

Jay Schleifer commented 2012-02-25 04:25:38 -0500 · Flag
The capital gains tax is ridiculous and unfair. This is just another form of making money and should be taxed as such. The precept that a tax break is needed to encourage investment is a fallacy. There’s never been a businessman who would forgo a profit opportunity just because of a tax rate. If they can make one more dollar, they’ll go for it, regardless of how much they need to pay tax to get it.
Justin Renquist commented 2012-02-24 02:59:28 -0500 · Flag
Implementation of a value added tax (VAT) system (consumtion tax) at federal level to replace current state sales taxes, similar to VAT taxes in Europe, in order to fund universal social security/social welfare, healthcare and education for ALL US citizens and lawful residents. This tax could be 15-20% and should be included within the price of items on the price tag to allow citizens to see true cost. No exemptions from VAT except for wholesales, and VAT not permitted as a loophole deduction on state or federal income tax forms.
Gene Herd commented 2012-02-23 17:21:41 -0500 · Flag
Draconian. Once the profit motive is eliminated from elected office, voters will determine the length of the term.
Eric Hendrix commented 2012-02-21 11:17:50 -0500 · Flag
i think an economical stimulus needs to be added here. “No Corporation shall operate on U.S. soil or land without being economically profitable. No corporation shall be exempt from the tax owed to the U.S. people and at no time shall a corporation EVER claim a tax rebate from the american people. We the people are not here to pay someone to operate in out territory, when the tax code says that you must pay a portion of income generated in our territory to the territory.”
John Lockette commented 2012-02-19 21:12:54 -0500 · Flag
@ chuck gregory – I disagree that the signers of the Declaration of Independence were merely stating what was unacceptable and they did not propose or state any solutions. In fact, they advanced two major solutions – elevating the colonies to the level of free and independent states and dissolving all ties to the British monarchy. At the same time, however, I agree with your sentiment that getting too specific in advancing too many solutions could create roadblocks in terms of gaining support for the cause.

Therefore, I suggest that we should stick to two or three paramount issues. I would argue that eliminating the influence of money in politics, instituting terms limits, and reforming some of our election practices are the bare minimum. All the other areas can be fixed if we the 99% can regain control of our democracy and our government through the enactment of new rules in those three areas. Essentially, that means going with #’s 2, 4, and 17.
chuck gregory commented 2012-02-19 06:28:56 -0500 · Flag
When the revolutionaries drafted the Declaration of Independence, they did not propose specific solutions; they stated what was unacceptable under a new philosophical framework. If they had demanded a federal system of government, the United States would never have happened; they would have been abandoned by the public as they sank into a quagmire of quibbling over details. While the goal is admirable, to propose solutions instead of defining the problem (as the Declaration of Independence did) is to undercut the purpose of the movement.

If you want people to rally to your side, do as was done in the Declaration of Independence and clearly state the problem rather than offer the solution. Solutions are much better after people deal first with defining the problem.
chuck gregory followed this page 2012-02-19 06:28:53 -0500
John Lockette commented 2012-02-18 17:25:44 -0500 · Flag
One further addition to my earlier comment. “Capital gains” and “carried interest” should simply be classified as “income” and be subject to either personal or corporate taxes (on a graduated, progressive scale), as appropriate.
John Lockette commented 2012-02-18 17:16:11 -0500 · Flag
A truly “fair” domestic tax code should be based on the following five sources of revenue: a graduated, progressive personal income tax; a graduated, progressive corporate tax; a land use tax; a luxury tax; and, an integrated gift/estate tax. Sales taxes (other than luxury taxes) and other product or commodity based taxes should be eliminated since they are inherently very regressive, with exceptions for certain products (e.g., cigarettes, for example) that have an adverse impact on health care costs. Also, the tax code should be simplified through the elimination of the kinds of tax loopholes that only favor certain small groups of very wealthy and/or politically connected individuals (e.g., tax breaks for corporate jets and special tax treatment of “carried interest”). The guiding principle underlying our tax code should be that it should “promote the general welfare” (i.e., “general” means all of us, not just the wealthy few), as stated in the preamble to our Constitution. As history has shown us repeatedly, our very imperfect hybrid form of capitalism has an inherent tendency to produce a concentration of wealth in the hands of fewer and fewer people, which can ultimately lead to economic collapse. Therefore, an element that is a necessary and essential part of any “fair” tax code in any sustainable capitalist society is a graduated, progressive scale for personal and corporate income tax rates, as well as for integrated gift/estate tax rates. The use of a “luxury tax” would also help in that regard, as would a limited form of a “land use tax”. In addition, our tax code should allow for the use of fiscal policy measures to counteract the impact of troughs in our business cylcles, as well as to encourage individuals and businesses to engage in economically and socially desirable activities (e.g., buying homes, hiring workers here in the USA, investing in clean and renewable sources of energy, and contributing to charitable organizations, etc.).
Nathan Duncanson commented 2012-02-18 02:02:35 -0500 · Flag
From my experience and training in real estate investing, I fully believe that most successful investors gain their wealth by monopolizing what ought to be public resources. Land is a natural resource. Real estate investors look to acquire land and then deny other people access to the land unless they first pay rent to the investor. In commercial real estate, the landlords own the land, but require the tenants to build the buildings, pay the taxes, pay the insurance, maintain the property while also paying rent to the landlord. There is something seriously wrong with this picture: namely that the landlord has done NOTHING to benefit society, yet extracts wealth from society. The full amount of that rent is nothing more than a tax upon society which is given in full to the landlord for doing absolutely nothing.

So if government were funded by collecting the ground rent (or the equivalent for other natural resources), the profit motive to own and control land would go away, reducing rents and making land (and other resources) more readily available to the rest of society. Further, the wealth collected for the government from this would far surpass the wealth extracted by income taxes and sales taxes. In other words, we could totally eliminate taxes on labor. Taxing land and natural resources to the full market rent would remove all the unearned income from private hands and make it available to the community. And since the wealthiest people and corporations tend to control the most resources in both quantity and value, the land and resource taxes are automatically progressive, requiring more from the wealthy and less from the poor.
Robert Hall commented 2012-02-17 21:10:12 -0500 · Flag
Our tax policy should be graduated. From those who get more, more should be expected since thier success in part based on the structure of the land where they live. The whole code should be 10 pages or less. It really should be only one page but we have to allow some room for politics. A portion of the success of companies who develope natural resources like coal, oil, uranium, natural gas, silicone, sand, stone, in other words any product which starts as a basic natural substance should have aportion of their income apportioned equally to all citizens of the Unites States. This bonus could be done quarterly and would illiminate the plague of open poverty in this rich country.
Maria Cadwallader commented 2012-02-17 19:10:24 -0500 · Flag
I like the fair tax proposal and do NOT want a flat tax rate, which only benefits the wealthy at the expense of the rest of us. A flat tax in this respect is like sales taxes.

Edit the next to last paragraph to make the last sentence grammatical, please: “This is an annual $4 billion hedge fund…” or “This annual $4 billion hedge fund permits…”
John Martin commented 2012-02-17 18:35:41 -0500 · Flag
A simple answer would be treat all income the same! Semper Fidelis!
Nathan Duncanson commented 2012-02-17 00:06:07 -0500 · Flag
We should do away with all income taxes, value-added taxes, and sales taxes. All these taxes add to the tax collection burden, are difficult to enforce, and require citizens and businesses to become unpaid agents of the government.

Instead, replace taxes with rent and fees for using land and natural resources. Land and natural resources exist in limited amounts, are required by everyone, and ought to belong to the community as a whole. Requiring everyone who uses land to annually pay the full market rate rent for the land would ensure that unearned income from land serves the whole community instead of a few privileged owners. Likewise, requiring those who harvest natural resources to pay the full market rent for the right to harvest those resources would ensure any monopoly profits are fully returned to the community rather than enriching a few at the expense of the many.

These changes to our tax system would vastly simplify the collection of taxes. It would also turn over to the government, and hopefully the rest of the community, the vast majority of unearned income in our economy. The other thing I should add, is that after supporting all legitimate government expenses in serving the community, is that the remaining funds should be equally divided and distributed to every citizen and resident of our nation.
Jeffrey McCollim commented 2012-02-16 19:09:42 -0500 · Flag
Eliminate all capital gains tax rate and tax as regular income. Consider 15 to 20% federal sales tax and repeal all federal income tax,deductions,credits,etc
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