Flat Tax, Fair Tax

The “Flat Tax” is a variant of an Income Tax that taxes every dollar of income at the same rate. For example, after determining your taxable income, that amount would be taxed at, say, 25%. Rich or poor, every dollar of taxable income is taxed the same. In some cases (I have never seen an exception), the Flat Tax begins with an exemption of the first $20,000 or $30,000, to soften the blow on low wage earners.

The “Fair Tax” is another variant of an Income Tax that is really a fixed-rate Sales Tax or Consumption Tax. For example, you do some shopping at your local Big Box store and end up with a big wagon of stuff; in addition to local and state sales taxes on individual items, there would be a fixed rate federal Sales Tax on the total checkout that would be the same in every locality in the nation, and this would replace the old Income Tax. And like the Flat Tax, the Fair Tax begins with what they call a “prebate,” a monthly check, to soften the blow on low-wage earners (and everyone else).

Term Limits

Often when I impose my favorite topic (“we are NOT a democracy and what are we going to do about it?”) on other people, someone suggests Term Limits as his solution. “Term Limits will keep our elected officials from spending half their time dialing for dollars, especially with the donor class; it will keep lobbyists off their backs.” When I ask, “limited to how many terms?,” they invariably say two, "as they will need some time to learn their new jobs.” When I object that they will be dialing for dollars through that first term, the discussion ends of its own weight as this solution is not a perfect fix of the problem. And arguing over a detail is never much fun.

A Wealth Tax

I have been thinking about a Wealth Tax for a few years now.  Indeed, I think about it so often that I imagined that I had already written a blog post about it.  I checked and I had not!  So, here it is. 

I got kicked in the head when I learned, just a few months ago, that Senator (and recently declared candidate for President from the Democratic Party) Elizabeth Warren was proposing a wealth tax.  All of a sudden, my idea was not original, Warren had beat me to the punch.  Not so!  Her idea was a surcharge on the wealthiest men in the land, while my Wealth Tax replaces the federal Income Tax and the federal Capital Gains Tax altogether.  No more taxation of incomes and no more tax on capital gains!  Got that?