My Views on Taxes

At this stage, I do not have the kind of tools the congressional budget office or well-educated economists would afford me. Therefore, the specifics herein are designed to give an idea of the magnitude of consumption (Fair, modified Fair HR-25, (Fair Tax HR 25), income, and estate tax changes I propose. My views on taxes and the proposed system will be refined as I am able to afford experts to assist me in ensuring it will work properly in our financially complex nation.

My Political Views on Taxes and Proposed Taxation Actions

Please be careful about listening to those who say our economy will collapse if we move to a consumption-based tax system. We will be cautious. The economy may collapse anyway, the way things are going. We are behind in the world partly because we consume far too much and do not save enough for our collective futures. Because of this, my political views on taxes and proposed taxation plans are as follows to transition to an income and investment-based economy.

Proposition #1

The income tax system should be abolished in the near term, say four years or so. It does not work because Congress has been unwilling/unable to keep the system fair and has provided excessive tax breaks for their supporters and favorite causes. It also does little to discourage consumption as most consumers are not even taxed on their income (the lower than 55% of income earners). These folks effectively have representation without taxation.

Proposition #2

After four years or so, we would have federal taxes only based (in likely order of significance) on the following:

  1. Consumption (after spending cuts, estimated at 11-15%)
  2. Use fees (interstates, parks, postal service, fuel, other services)
  3. Estates (modest, except at the very high wealth brackets, and maybe not at all). It is simply unwise to allow excessive wealth in the hands of individuals who might not favor the American people in their spending.

Proposition #3

To return our nation to fiscal soundness, I propose temporarily and significantly increasing the income and wealth taxes at the highest tax brackets. This would look something like a 50% marginal tax rate on all incomes over $1,000,000 (while cutting many tax breaks) and a 90% zero-exemption estate tax on all estates over $5-$10,000,000, with a vehicle to protect illiquid estates such as farms, ranches, equipment, factories, etc. (I do not want to force the liquidation of productive assets by raising the estate tax.)

Estates of this magnitude have simply been allowed to draw too much wealth to the top wealth brackets, and this money must be used to pay down our debts and invest in our future. Yes, the millionaires and billionaires will be asked to pay, but so will the 55% of Americans that currently pay no income tax.

Proposition #4

I expect to slash federal spending in year one and beyond significantly. See the policy paper on that, please. With time, the IRS would be eliminated with compassion. I have met many federal employees who have privately told me the federal government is bloated and the incentives in budgeting encourage even more spending.

Proposition #5

I would immediately institute a Fair Tax type system requiring a 5% tax at the checkout counter/page for all transactions. I would temporarily reduce income taxes on the middle class to offset this new and additional consumption tax. The income tax would only remain for the well-off after year one.  This consumption tax would be raised, over time, to adjust for lost income tax revenue and as the economy adjusts.

Fair tax exemption cards would temporarily be available to exempt healthy foods, addiction programs, modest shelter, preventative medical care, and fitness programs for the very poor to avoid poverty as we transition away from being a consumption-based economy to an income and investment-based economy. We would transition these exemptions away as the numbers in poverty decrease.

In Summary

We would temporarily raise taxes on the wealthy and high-income earners as we transition from a consumption-based economy to an income and investment-based economy while drastically cutting spending, paying down debt, and, soon after, eliminating the income and most estate taxes for good.

4 Responses

  1. I see lots of holes in this & will go at it one by one
    1st in prop 1
    You ask in 4 years abolish the income tax after being signed.
    Under FairTax HR 25 it takes effect quickly & there is a 7 year period were if FairTax does not work, income tax can be voted back in again by the people after that FairTax becomes law.

    In your prop 2
    A consumption tax of 15% or less, which sounds great but presents problems when asking for a higher tax for the wealthy, we are back to income taxes
    Under FairTax HR 25 it is set at 23% everybody pays equally from the wealthy to the tourist to the lowest of incomes.
    With the monthly prebates up to poverty
    level under FairTax middle incomes will be paying about 15% or less & lower incomes more than likely zero or close, while the wealthy even with the monthly prebate closer to 22%
    In your prop 3
    Again you ask for a income tax & here we go again with tax lobbyist, FairTax HR 25 has no deductions = no embedded taxes which currently we are paying at least 20% on every purchase & why FairTax really does not change the final price of goods but your taxes will be paid for since it is an inclusive tax just like current is.
    In prop 4
    Under FairTax HR 25 it is revenue neutral but will hugely save trillions in gov, businesses & citizens just doing taxes & related expenses from & the tax paying base will go from 90 million to 350 million including illegals, tourist, criminals, rich, poor everybody paying equal & every legal American citizen adult able to receive a monthly prebate if wanted.
    In prop 5
    I have already covered the simplicity of a consumption tax only & no income taxes which brings in lobbyist with winners & losers
    FairTax HR 25 is only 131 pages long & is plainly common sense practical simple effective & transparent.
    Under FairTax HR 25 benefits like offshore money & businesses will come back to the USA which will bring loan money & huge demand for good workers, along with lowering the environmental impact, decreasing lobbyist greatly & long-term politicians since donations are real politicians will need to perform, non profits will greatly expand & be more real they also will need to preform, the lower incomes will find it much easier to earn a income & survive.

    1. Thank you, Craig.
      1) The reason I propose keeping the income tax on the wealthy for a time, is to have extra taxes coming in to straighten out the fiscal mess we are in. We can always eliminate the income tax sooner, but I aim to eliminate much of the $31T of debt by taxing the very wealthy who really have not paid their fair share for decades due to congressional loopholes. Once our debt is paid down, we can cut taxes back, hopefully on all.
      2) 23% is too high. Don’t forget, we will also be slashing the debt and budget so the need for tax revenues will diminish. I don’t care for prebates and other subdidies and they will be for a last resort. Look where loopholes and subsidies have gotten us.
      3) No, the income tax will be only on the wealthy and loopholes can go away. This is just a transfer of wealth, frankly, from those who have not been paying much taxes as a percentage. I don’t think the rich will even mind because it is fair over the long term, and we must eliminate our massive debt.
      4) I’ll stop now, but I think your mind is hard set on HR 25. I like this concept, but we must also resolve the huge debt and deficit, and HR 25 cannot likely do that on its own without a too high of tax for the poor and middle. Could you afford 23% at the register. Maybe when things are all evened out in 4 years, but I doubt you could today. Think outside the HR25 box. It is not enough to solve our nation’s problems, but will be perfect once we get through this. Thanks. Oh, and when I have some professional economists on board, I will have a detailed plan with tax rates and all. My MBA tells me my plan will work, but it will need to be tweeked. Watch the establishment blow up when we talk about getting rid soon of income taxes. It is the best thing we can do. TY.

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