Fair Taxes

Working-class and poor people are paying an ever greater proportion of federal taxes, and too often state and local taxes are unfair and regressive. The tax code is a labyrinth of deductions, loopholes, exceptions and write-offs, the result of insider and industry-lobbying and has damaged our economy as it has served the interests of big business, financial institutions and the rich.

I would introduce legislation that would initiate system wide tax reform which would simplify the tax system. Subsidies, export incentives, tax loopholes and tax shelters that benefit large corporations now amount to hundreds of billions of dollars each year and must be cut to the bone.

I would initiate a tax policy that moves to eliminate loopholes and other exemptions that favor powerful interests over tax justice. Small business, in particular, should not be penalized by a tax system which benefits those who can “work” the legislative tax committees for breaks and subsidies.

Presidents George W. Bush and Barack Obama have irresponsibly expanded our national debt by trillions of dollars to finance tax cuts for our wealthiest citizens, war, corporate welfare and bailouts of Wall Street and the automotive industry. This debt and the interest that must be paid on it are not sustainable.

These tax cuts threaten our ability to fund critical national priorities; they unfairly shift the responsibility of paying taxes from the wealthy and corporations toward lower- and middle-income workers; they will burden future generations with enormous debt; and they have failed to create decent paying jobs or wage growth for working Americans.

The complexity and distortions of the federal tax code produces distributions of tax incidence and payroll tax burdens that are skewed in favor of the wealthy and the corporations further garnished by tax shelters, insufficient enforcement and other avoidances.

The GAO reported in 2008 that “two out of every three UNITED STATES CORPORATIONS
 paid no federal income taxes from 1998 through 2005.”

(Here’s what the graph says.)
After the Great Depression and during World War II, the US government collected 40% of its taxes from corporations.  By 1955 over twenty-seven percent of Federal revenue came from corporations and 8.9% from individuals. After the war, corporations went to work to change the federal tax system.

Corporate tax contributions as a percent of the overall federal revenue stream have been declining for over fifty years and now stand at 8.9% despite massive record profits while individuals now shoulder 81% of the tax burden.

Corporate Taxes as a Percentage of Federal Revenue
1955 . . . 27.3%
2010 . . . 8.9%

Individual Income/Payrolls as a Percentage of Federal Revenue
1955 . . . 58.0%
2010 . . . 81.5%

I WOULD INTRODUCE LEGISLATION that would create a fair tax plan which would include the following provisions:

• Americans making less than $100,000 a year would not have to pay an income tax.
  
• After $100,000 there would be a graduated tax where the top rate would be around the 35% mark. There will be no loopholes.
  
• We must move the incidence of taxation from work to wealth.
  
• We would maintain the estate tax at 35% on estates above $10 million. There will still be a tax on smaller estates. All estates over $500,000 would pay some tax the estate tax as a whole would raise about $32 billion a year. The loopholes in the present state tax laws would be removed. It should be kept in mind that this tax would only affect approximately 2% of the American taxpayers.

• Sol Price, the founder of Price Clubs which is now merged with Costco, is correct we would have a "wealth tax". There would be a 1% "wealth tax". This tax would be levied on the 1% of Americans with the highest net worth.
• I would tax the things we like the least. We should tax polluters. We should tax gambling. We should attack the addictive industries that are costing us so much and luring the young into alcoholism and tobacco.
• There should be a tax on stock and currency speculation. If you go to the store to buy furniture, food and clothing, books you pay 6% or 7% or more in sales tax. Yet if you buy a thousand shares of General Motors stocks you pay nothing. This would not be an exorbitant tax rate in fact a 0.25% tax on the purchase of stocks, bonds, derivatives and currency speculation would produce hundreds of billions of dollars a year because of the volatility. It is now not unheard of to have a day on Wall Street where 1.5 billion shares are traded!

The thrust of my policy is this: work should be taxed the least. Then we move to wealth, and then we move to things we do not like.
Then we will have more than enough to replace the taxes formerly paid by those citizens earning less than $100,000 and enough to provide for decent public transit and for repairing the public-works infrastructure to boot!

Your tax dollars at work: our government dropped one ton bombs on the civilian population in Baghdad.