Well, as a libertarian on economic matters I'd like to propose a new tax system that would satisfy everyone: Everyone: 10 percent flat tax of income (hmmmm) 10 percent national sales tax Poor: No extra taxes Middle class: 10 percent tax on unearned wealth (Investments, bonds, etc.) Rich: 25 percent tax on unearned wealth (ditto)
Why make the rich pay a greater percentage? How is that fair? And I'd like to suggest that unless stolen, no wealth is unearned. Any time you risk capital and enjoy a return, it is earned... as is a loss.
I favor the following tax system: 1. A 1 to 6 percent derivatives and securities tax on such assets' notional values. 2. Temporary stabilizing progressive tax structure with a 5-bracket system from 1 to 5 percent with no preferences, deductions, credits, loopholes, or havens. All other things being equal, such a tax system would generate a maximum $14.88 trillion in federal revenue without taxing most corporations/rich people, the entire middle class, or the entire poor.
I find it hard to believe that a libertarian would support a 25% tax on wealth. Using Warren Buffett for example, He's worth about 40 billion or so. So for the first year, that's an unearned wealth tax of 10 billion. That's not money he has in a safe or special money room like Scrooge McDuck; that's in his ownership of Berkshire Hathaway. So he would have to sell 10 billion dollars worth of shares the first year to pay his tax bill. Imagine that replicated throughout the economy. Then comes the next year...
That is simply untrue. If I invest $10 in XYZ, LTD and in 5 years, my investment is worth $20, I have earned $10.
Any system which taxes some at a different rate due to their worth is inherently doomed to fail, as it will be co-opted by demagogues willing to create constituencies via class warfare and division. All tax rates should apply to everyone equally. We should be able to agree on this principle. If we cannot, there will be no peace; there will be no harmony; there will be inefficiency and dysfunction.
I don't mind the flat income rate or the federal sales tax, but I really dont like the progressive scale you've got. I'm all for taxing all money earned as well as investment, capital gains, ect., provided everyone pays the same rate.
Yeah, I offer a substantial improvement. Simple elimination of all incomes taxation and impose a national sales tax on all transactions. No exceptions, no exemptions, no deductions. Set the rate at spending plus 2% to reduce debt. If Obama insists on spending 25% of GDP then the tax rate is 27%. A sales tax is nothing more than a combination of tariffs and excises as described in the Constitution. Linking taxation directly to spending will put downward pressure on government spending.
