When I say "Income Tax" I mean any and all Payroll taxes. Including federal income tax, state income tax, social security (both employer and employee portions), medicare, etc. I am 100% for abolishing this sort of tax, complete with a constitutional amendment to make sure it stays gone.
I get a little bit ticked off each year while I am entering all of my tax info into Turbo Tax each year, not uncomfortable enough to go get my tin-foil hat and put it on, I mean I am trusting enough to go ahead and give them direct deposit info to my bank. But honestly, what an invasion of privacy. Asking for my W2 statements, and how many kids I have... Ok, I'm still on board. But, in order to get the best possible return, we are asked to share as much information as possible about every aspect of our lives. Medical, financial, educational, ... ... ... honestly, eliminate the loopholes and just tell me what I owe.
The other problem with Income tax is that it is prone to loopholes. In order to make it "progressive" there are all of these deductions and credits and stuff. but the rich are just as capable of using the deductions and credits, in fact more so because in their case its worth it to pay a specialist to find and exploit every possible loophole. The tax code ends up being ridiculous. If you had 10 different tax specialists prepare your taxes, I bet you would end up with 10 different numbers. Worse than that, you have to save all of that info for 7 years in order to make your case if the IRS comes to hunt you down for being wrong (And, yes, you are guilty until proven innocent when the IRS is involved). I am honest on my tax returns, but I am still scared to death that the IRS might knock on my door and demand that I show them receipts for all of the medications that I claimed as medical expenses on my 2009 tax return. Sure, I have them in my little 2009 folder, but what if stuff is missing or doesn't count like I figured it would? I just get uncomfortable knowing that even doing my best, I might still be targeted. What ever happened to innocent until proven guilty, and whatever happened to probable cause?
Paradigm Shift
Anyway, suppose you abolish all of the payroll taxes (and also swap the Captial Gains tax for an Investment Exchange tax) . This would be a game changer. A total paradigm shift. It fixes so many problems. It eliminates so much red tape. It makes things simple again.
There is no difference between a traditional IRA, a wroth IRA, a 401K, or any other sort of investment account. There is no "hit" for early withdrawal of your "retirement" account. If the company you work for is not cool enough to have a 401K program, you can go set up a perfectly normal bank account and make deposits into it, you can even set up automatic transfers like the 401K thing does. And, in the end, you have exactly the same kind of account as what the cool kids have.
There is no maximum you can put away for retirement each year. No need to hire a financial planner just to successfully retire. If you have enough savings, you can retire whenever you want to rather than having to wait until you reach the ripe old age of .... whatever the government considers retirement age to be once you get there.
There is no need for Flexible Medical Spending Accounts, because all money is "pre-tax" money. If you want a special account for paying your medical expenses, then you don't have to wait for your employer to set everything up, you just walk down to a credit union or bank, and tell them to open a savings account for you. You can make contributions to it each month, your employer can even give you extra money to put in there if they are feeling generous. And, as an added bonus, if you don't spend all of it at the end of the year, you get to keep your money. Now, that is what I call a FLEXIBLE medical spending account.
Waitresses no longer need to care about reporting tips as income because ... no one cares what their actual income was, its all tax free. Spend it wisely.
The more I think about all of the annoying financial stuff that gets fixed by eliminating the payroll taxes, the more I think to myself ... why hasn't anyone seriously considered this before? It fixes so many things.
Some would argue that if the government doesn't know exactly how much everyone makes, then how can we make sure that the rich pay their fair share? Simple. The value of a person's property is almost always directly related to how rich they are. You don't see poor people in mansions, and you don't see rich people in the projects. Most people buy as much house as they can afford. Property value is directly correlated to purchasing power. The value of a person's property also is a good indicator of how much they can afford to pay in taxes.
So, a case could be made that property tax is roughly the same thing as income tax, except without the privacy concerns, and without the IRS needing to exist, and without complicating paychecks.
You'll still be taxed
Now, understand that if we used property tax to replace income tax and sales tax, and ... everything else, you can expect that you wont have any extra money at the end. if you pay $300 per month in payroll taxes, as well as $200 in sales tax, you better expect that at the end of the day your property tax is going to increase by something in the ballpark of $500 per month. I'm not talking about eliminating taxes so much as I am talking about changing how they are paid.
In a property tax system, the local government is responsible for tracking property values. And for making sure the rates they tax on those properties is enough to pay all of the bills. One of those bills is to pay the State what they need in order to pay all of their bills. The state would tax the local governments using a formula based on population, land value, ... whatever they come up with. County governments would have to come up with rates to bring in that much revenue. The states would have to turn around and fund the federal government too, so the same sort of formula would be used to decide what is a fair amount for each state to pay.
Friday, October 28, 2011
Reforming the Tax Code : Thoughts on the Sales Tax
I am not a fan of the Sales Tax. Its certainly not as bad as the Income tax, or the Corporate tax.
The Fair Tax book, which I mostly agree with, builds an excellent case for using the sales tax exclusively (no other taxes at all). And, while I think their plan would be better than what we have now, I don't think its the right way to skin the cat. (please don't post about how much you don't like the Fair Tax unless you have actual read the book, or you will prove your own stupidity, almost all of the obvious objections are addressed in the book itself and if you haven't read it you wont know which of your objections are just ignorance. If you have read it all and still object, then I'd love to have your comments.)
So, here is why I dont like sales tax (aside from the fact that it takes money out of my pocket). The sales tax is a burden on businesses. And, its kind of regressive. Even after the "prebate" idea that the Fair Tax book publishes, it still hits the little guy harder (in my opinion).
But my real complaint is the cost of compliance. How many hundreds of thousands of businesses are calculating sales tax and sending regular payments in to various governmental entities. I mean, sure for retail stores, its part of doing business, you just accept the fact that its a necessary evil.
But, its a killer for small businesses. Let me explain that by telling my own personal small business story: While I was in collage, I supported my family by being a free lance computer repair guy. I could have ALSO sold computers (rather than just fix them) except I was scared to death to collect sales tax. It meant I would be responsible to the state for getting them that tax money according to whatever schedule that they require, and fill out whatever forms were required, etc. I didn't have time to care about that sort of thing. I had a business to run, I had clients to take care of, I had a family to feed, I had classes to be at, and homework to do. Sales tax was just one more piece of red tape I didn't want to deal with. What I really didn't want to deal with was the possibility that I would handle it wrong and then have some unexpected fine or a court date to defend my ignorance that would further get in the way of me doing all of the other things that I needed to do from day to day.
Sure, collecting sales tax isn't the worst possible burden you can ask of a business. But honestly, if there is an alternative that requires less administrative overhead I'm for the alternative. Which is why I prefer the Property Tax.
The Fair Tax book, which I mostly agree with, builds an excellent case for using the sales tax exclusively (no other taxes at all). And, while I think their plan would be better than what we have now, I don't think its the right way to skin the cat. (please don't post about how much you don't like the Fair Tax unless you have actual read the book, or you will prove your own stupidity, almost all of the obvious objections are addressed in the book itself and if you haven't read it you wont know which of your objections are just ignorance. If you have read it all and still object, then I'd love to have your comments.)
So, here is why I dont like sales tax (aside from the fact that it takes money out of my pocket). The sales tax is a burden on businesses. And, its kind of regressive. Even after the "prebate" idea that the Fair Tax book publishes, it still hits the little guy harder (in my opinion).
But my real complaint is the cost of compliance. How many hundreds of thousands of businesses are calculating sales tax and sending regular payments in to various governmental entities. I mean, sure for retail stores, its part of doing business, you just accept the fact that its a necessary evil.
But, its a killer for small businesses. Let me explain that by telling my own personal small business story: While I was in collage, I supported my family by being a free lance computer repair guy. I could have ALSO sold computers (rather than just fix them) except I was scared to death to collect sales tax. It meant I would be responsible to the state for getting them that tax money according to whatever schedule that they require, and fill out whatever forms were required, etc. I didn't have time to care about that sort of thing. I had a business to run, I had clients to take care of, I had a family to feed, I had classes to be at, and homework to do. Sales tax was just one more piece of red tape I didn't want to deal with. What I really didn't want to deal with was the possibility that I would handle it wrong and then have some unexpected fine or a court date to defend my ignorance that would further get in the way of me doing all of the other things that I needed to do from day to day.
Sure, collecting sales tax isn't the worst possible burden you can ask of a business. But honestly, if there is an alternative that requires less administrative overhead I'm for the alternative. Which is why I prefer the Property Tax.
Reforming the Tax Code : Corporate Tax is Stupid
The Fair Tax Book does a better job at explaining this than I ever could, and even if you don't like the tax system they propose in the book, its hard to disagree with their evaluation of the Corporate tax.
For those of you who don't intend to spend the time or money on the book, here is what I got out of it....
No matter how much you tax a corporation, what you are really doing is taking money that would ultimately go to a person in one way or another. Now, the general feeling among those who support the Corporate tax is that the person you are taxing is the CEO and the other people who run off with all of the profit earned by the company .... rich people. Therefore, its a tax on the rich, and how can anyone be against that?
But, paying dividends is not the only thing companies do with their earnings. If you want to tax rich people then tax the dividends, not the corporation. Corporations spend their earnings in lots of ways, many of which are VERY desirable. Such as expanding into new areas, building new plants, buying equipment, paying employees more, hiring more employees, investing in other companies, .... these are all good things.
So, while I agree that not every penny of every dollar of profit that a company earns goes to create higher paying jobs for the little guy, that doesn't mean that we should pillage the earnings of companies.
The real problem with this tax though is that it chases business away from America. Its not who ultimately pays the tax, its the ugly trend in manufacturing job loss that it creates that is the real problem. America taxes corporations 35%. Other countries tax around 15%. So, American businesses move their manufacturing to places where they can keep more of the money the make. Its fairly simple really.
Now, if we decided not to tax corporations AT ALL, wouldn't that have the exact opposite effect? companies that get taxed at 15% in other areas of the world would say .... hey, if we move our manufacturing plant to America, we could avoid that 15% tax....
The corporate tax chases jobs away plain and simple, and that is stupid.
For those of you who don't intend to spend the time or money on the book, here is what I got out of it....
No matter how much you tax a corporation, what you are really doing is taking money that would ultimately go to a person in one way or another. Now, the general feeling among those who support the Corporate tax is that the person you are taxing is the CEO and the other people who run off with all of the profit earned by the company .... rich people. Therefore, its a tax on the rich, and how can anyone be against that?
But, paying dividends is not the only thing companies do with their earnings. If you want to tax rich people then tax the dividends, not the corporation. Corporations spend their earnings in lots of ways, many of which are VERY desirable. Such as expanding into new areas, building new plants, buying equipment, paying employees more, hiring more employees, investing in other companies, .... these are all good things.
So, while I agree that not every penny of every dollar of profit that a company earns goes to create higher paying jobs for the little guy, that doesn't mean that we should pillage the earnings of companies.
The real problem with this tax though is that it chases business away from America. Its not who ultimately pays the tax, its the ugly trend in manufacturing job loss that it creates that is the real problem. America taxes corporations 35%. Other countries tax around 15%. So, American businesses move their manufacturing to places where they can keep more of the money the make. Its fairly simple really.
Now, if we decided not to tax corporations AT ALL, wouldn't that have the exact opposite effect? companies that get taxed at 15% in other areas of the world would say .... hey, if we move our manufacturing plant to America, we could avoid that 15% tax....
The corporate tax chases jobs away plain and simple, and that is stupid.
Thursday, October 27, 2011
Reforming the Tax Code : a new Investment Exchange tax would be Useful
This post is PART of a larger set of posts on Reforming the Tax Code, an overview of the entire idea can be found here.
Social Engineering
I admit it, this tax is about more than raising revenue. It is about creating incentive for wise, long-term investment and eliminating incentive for speculative, short-term investment. Its also about simplifying retirement investment. (More on that here).
What is wrong with Short Term Investment.
In the ideal economy, every exchange of money benefits two parties. Suppose I work for you, and you pay me for my time and effort. Both the employee and employer benefit, right? OR, suppose I invest in your company, your company pays me back using some of the profits, so long as that works out, everyone benefits.
Now, suppose a man puts two million dollars in some crazy stock that he knows is going to bump a little bit today. And suppose it turns out that the stock really does bump a couple of percentage points before he sells it at the end of the day. He makes $40,000. Question: Where did that money come from? AND (other than the guy with an extra $40,000) did anyone at all get anything in return for that $40,000?
But, in our day trade example, someone got $40,000 in exchange for 1 day of "investment" of a couple million dollars. The company cant turn around 2% profit on millions dollars in a single day of having someone's money. That's ludicrous. Which brings me back to my original question.... who benefits? does the overall economy get stronger? do a hundred little people get a little bit of benefit? does the company who's stock was owned temporarily benefit? .... no. No one else benefits in any way. Its a very one sided transaction. All of the other one sided transactions I can think of are considered fraud.
The end result of this day trade was that one man got a years wages for the average American household on a single afternoon in exchange for .... nothing. Call me crazy, but I don't think that's good for the economy. If you want to bet on horses, go to the race tracks. At least there they have gambling odds stacked in such a way that someone else benefits from the wagering. The problem with the stock market is that stocks ride semi consistent waves, so if you have truly huge amounts of money to invest, and swap them around at the right parts of each of these waves, you can effectively skim the cream off the top of the stock market. Its a little bit different from standard "gambling" even if it does include some risk.
What is the Investment Exchange Tax?
The Investment Exchange tax is nothing more than a sales tax that is collected whenever an investment changes hands. When I say "Investment" I mean anything that is created to be saved and resold as opposed to consumed. Such as stocks, bonds, precious metals, land, homes, ... (the sorts of stuff taxed via capital gains today).
To contrast it with Capital Gains tax, the investment exchange tax would be paid at the time of purchase rather than being paid at the time of sale. And, the investment exchange tax would be calculated using the entire value of the investment being purchased, where capital gains only taxes the profit from the investment. Also, the investment exchange tax would be charged even when you are simply moving your investment from one place to another.
To explain that last point, consider what happens today when you buy a home, and end up with lots of equity. then suppose you sell your home in order to use that equity to get a nicer home. So long as you re-invest the money you "earned" you don't pay capital gains tax. You only pay it if you remove your investment from the system and walk away with cash. This is NOT AT ALL the way the investment exchange tax would work.
Under the Investment Exchange tax, if you move your money from Google stock to Apple stock, and then move it again to Microsoft stock and finally back to Google stock, you will pay the tax on the entire amount being bought/sold at each step of the process (a total of 3 times).
Doesn't that scare away investors?
No. But it does scare away anyone who doesn't intend to stick around long enough to make up for that initial investment. It actually attracts serious investment. Suppose you decide to start saving up a retirement by purchasing $100 worth of stock every month. And suppose the current tax rate for investment exchange is 5%. So, you pay $105 for something worth $100. Within a year, its worth $105 (stocks generally go up over time). Suppose it continues to rise until you retire. At which point, your $100 is now worth $400 (not unreasonable). You earned $300. In the "capital gains" system, you now pay tax on the $300 (which you can bet will be more than you did when you paid it on $100). Anyway, the only investor it scares away is the one who intends to pull their money out in less than a few months (we call those day traders).
It completely eliminates crazy statistical geniuses with deep pockets from skimming the stock market into their bank accounts without anyone else benefiting from their "investment" money. It also makes the tinfoil hat crowd feel safer about crazy super rich people sloshing money all around the globe and using their ridiculous amounts of cash manipulate entire economies, etc, etc. Honestly, whether that's happening or not, I do prefer a world where we tax them every time they do. If it isn't happening, no big deal. If it is, at least we are skimming money out of their pockets when they do.
Now, without money being skimmed off the system by day traders, the overall market should have stronger gains. Which will also encourage REAL investment.
Social Engineering
I admit it, this tax is about more than raising revenue. It is about creating incentive for wise, long-term investment and eliminating incentive for speculative, short-term investment. Its also about simplifying retirement investment. (More on that here).
What is wrong with Short Term Investment.
In the ideal economy, every exchange of money benefits two parties. Suppose I work for you, and you pay me for my time and effort. Both the employee and employer benefit, right? OR, suppose I invest in your company, your company pays me back using some of the profits, so long as that works out, everyone benefits.
Now, suppose a man puts two million dollars in some crazy stock that he knows is going to bump a little bit today. And suppose it turns out that the stock really does bump a couple of percentage points before he sells it at the end of the day. He makes $40,000. Question: Where did that money come from? AND (other than the guy with an extra $40,000) did anyone at all get anything in return for that $40,000?
But, in our day trade example, someone got $40,000 in exchange for 1 day of "investment" of a couple million dollars. The company cant turn around 2% profit on millions dollars in a single day of having someone's money. That's ludicrous. Which brings me back to my original question.... who benefits? does the overall economy get stronger? do a hundred little people get a little bit of benefit? does the company who's stock was owned temporarily benefit? .... no. No one else benefits in any way. Its a very one sided transaction. All of the other one sided transactions I can think of are considered fraud.
The end result of this day trade was that one man got a years wages for the average American household on a single afternoon in exchange for .... nothing. Call me crazy, but I don't think that's good for the economy. If you want to bet on horses, go to the race tracks. At least there they have gambling odds stacked in such a way that someone else benefits from the wagering. The problem with the stock market is that stocks ride semi consistent waves, so if you have truly huge amounts of money to invest, and swap them around at the right parts of each of these waves, you can effectively skim the cream off the top of the stock market. Its a little bit different from standard "gambling" even if it does include some risk.
What is the Investment Exchange Tax?
The Investment Exchange tax is nothing more than a sales tax that is collected whenever an investment changes hands. When I say "Investment" I mean anything that is created to be saved and resold as opposed to consumed. Such as stocks, bonds, precious metals, land, homes, ... (the sorts of stuff taxed via capital gains today).
To contrast it with Capital Gains tax, the investment exchange tax would be paid at the time of purchase rather than being paid at the time of sale. And, the investment exchange tax would be calculated using the entire value of the investment being purchased, where capital gains only taxes the profit from the investment. Also, the investment exchange tax would be charged even when you are simply moving your investment from one place to another.
To explain that last point, consider what happens today when you buy a home, and end up with lots of equity. then suppose you sell your home in order to use that equity to get a nicer home. So long as you re-invest the money you "earned" you don't pay capital gains tax. You only pay it if you remove your investment from the system and walk away with cash. This is NOT AT ALL the way the investment exchange tax would work.
Under the Investment Exchange tax, if you move your money from Google stock to Apple stock, and then move it again to Microsoft stock and finally back to Google stock, you will pay the tax on the entire amount being bought/sold at each step of the process (a total of 3 times).
Doesn't that scare away investors?
No. But it does scare away anyone who doesn't intend to stick around long enough to make up for that initial investment. It actually attracts serious investment. Suppose you decide to start saving up a retirement by purchasing $100 worth of stock every month. And suppose the current tax rate for investment exchange is 5%. So, you pay $105 for something worth $100. Within a year, its worth $105 (stocks generally go up over time). Suppose it continues to rise until you retire. At which point, your $100 is now worth $400 (not unreasonable). You earned $300. In the "capital gains" system, you now pay tax on the $300 (which you can bet will be more than you did when you paid it on $100). Anyway, the only investor it scares away is the one who intends to pull their money out in less than a few months (we call those day traders).
It completely eliminates crazy statistical geniuses with deep pockets from skimming the stock market into their bank accounts without anyone else benefiting from their "investment" money. It also makes the tinfoil hat crowd feel safer about crazy super rich people sloshing money all around the globe and using their ridiculous amounts of cash manipulate entire economies, etc, etc. Honestly, whether that's happening or not, I do prefer a world where we tax them every time they do. If it isn't happening, no big deal. If it is, at least we are skimming money out of their pockets when they do.
Now, without money being skimmed off the system by day traders, the overall market should have stronger gains. Which will also encourage REAL investment.
Reforming the Tax Code : Capital Gains Tax is Stupid
This post is PART of a larger set of posts on Reforming the Tax Code, an overview of the entire idea can be found here.
How should we tax Investment Earnings?
I am in favor of replacing the current Capital Gains tax with an Investment Exchange tax.
The Capital Gains tax is stupid
The capital gains tax is basically an income tax on investment earnings, and all Income tax is stupid (more on that here).
Some people argue that the Capital Gains tax is a tax on the rich and therefor doesn't affect other people. But this is false. This tax is a burden on anyone who buys a home, or intends to save money for retirement.
The Capital Gains tax is one more piece of the disgusting tax code that makes it so that the average american has to hire a financial planner in order to successfully retire. It is part of the reason we have different kinds of retirement accounts. It is part of the reason we have "retirement" accounts at all (rather than just having money invested someplace that we intend to use when we retire. The existing tax code (including capital gains) is why we take a "hit" when we cash out of our retirement because we run on hard times and need to liquidate our retirement early.
Without the capital gains tax (and payroll tax that it is trying to mimic) there is no difference between withdrawing YOUR money at age 50 than at age 60. If you have enough to retire at age 40, why should you have to wait until the government retirement age in order to withdraw money from your retirement account. Really, its ludicrous.
That's not to say that investment taxing has to be thrown away, but we are taxing the wrong end of it all. Instead, we need to go with an Investment Exchange tax (as outlined here).
What is Capital Gains Tax anyway?
Suppose you invested $1,000 in yahoo back in the 1990s. Then, after holding it for 5 years, sold it for $11,000. On the surface, you earned $10,000. But it is not really fair to treat it as a big jolt of income all in the one year because you "earned" it over the course of 5 years. So, it was more like earning $2000 a year for 5 years, which is a way different tax bracket than what you would be taxed at for making a $10,000 bonus all in one day.
Now, take that and complicate it a little further by assuming that inflation has occurred over those 5 years. $1000 today is not worth what it was 5 years ago. So, without going into the details, its not exactly like earning $2000 per year either. Its ugly.
In order to make it less "ugly" the current tax system just says that any profit you make on aged investments when you cash them in gets taxed at a particular rate (which is lower than the income tax rate for the same amount of money). In the end, this is more or less "fair", or at least that is the aim of the tax itself.
I am not here to dispute whether or not the current rate charged on capital gains is exactly comparable to the same sort of income tax, for the sake of discussion lets assume that the numbers actually would mean that the capital gains tax somehow equals exactly the same thing you would have paid in income tax if you had paid over time instead of realizing your earnings all at once.
How should we tax Investment Earnings?
I am in favor of replacing the current Capital Gains tax with an Investment Exchange tax.
The Capital Gains tax is stupid
The capital gains tax is basically an income tax on investment earnings, and all Income tax is stupid (more on that here).
Some people argue that the Capital Gains tax is a tax on the rich and therefor doesn't affect other people. But this is false. This tax is a burden on anyone who buys a home, or intends to save money for retirement.
The Capital Gains tax is one more piece of the disgusting tax code that makes it so that the average american has to hire a financial planner in order to successfully retire. It is part of the reason we have different kinds of retirement accounts. It is part of the reason we have "retirement" accounts at all (rather than just having money invested someplace that we intend to use when we retire. The existing tax code (including capital gains) is why we take a "hit" when we cash out of our retirement because we run on hard times and need to liquidate our retirement early.
Without the capital gains tax (and payroll tax that it is trying to mimic) there is no difference between withdrawing YOUR money at age 50 than at age 60. If you have enough to retire at age 40, why should you have to wait until the government retirement age in order to withdraw money from your retirement account. Really, its ludicrous.
That's not to say that investment taxing has to be thrown away, but we are taxing the wrong end of it all. Instead, we need to go with an Investment Exchange tax (as outlined here).
What is Capital Gains Tax anyway?
Suppose you invested $1,000 in yahoo back in the 1990s. Then, after holding it for 5 years, sold it for $11,000. On the surface, you earned $10,000. But it is not really fair to treat it as a big jolt of income all in the one year because you "earned" it over the course of 5 years. So, it was more like earning $2000 a year for 5 years, which is a way different tax bracket than what you would be taxed at for making a $10,000 bonus all in one day.
Now, take that and complicate it a little further by assuming that inflation has occurred over those 5 years. $1000 today is not worth what it was 5 years ago. So, without going into the details, its not exactly like earning $2000 per year either. Its ugly.
In order to make it less "ugly" the current tax system just says that any profit you make on aged investments when you cash them in gets taxed at a particular rate (which is lower than the income tax rate for the same amount of money). In the end, this is more or less "fair", or at least that is the aim of the tax itself.
I am not here to dispute whether or not the current rate charged on capital gains is exactly comparable to the same sort of income tax, for the sake of discussion lets assume that the numbers actually would mean that the capital gains tax somehow equals exactly the same thing you would have paid in income tax if you had paid over time instead of realizing your earnings all at once.
Reforming the Tax Code : Overview
Here is my "plan" for fixing the US tax code by putting in a new tax code that is progressive (Should please Democrats), respects the privacy of tax payers (Should please Libertarians and Constitutionalists), and very pro American business (should please Republicans), and eliminates tons and tons of paperwork (should please Environmental types).
At the Federal Level
Eliminate all Payroll Related taxes (reasons), the Capital Gains tax (reasons), the Corporate tax (reasons) and basically anything else other than a Direct Tax on the States (details), an Import tax (details), and a new Investment Exchange tax (details).
At the State Level
At the County (or City) Level
To Sum up
So, to restate that in reverse, the current Property Tax system that is currently the bread and butter of basically all local governments in America today would become the only tax that most Americans ever think about. It would have to go up significantly, BUT all other taxes you are paying would go away so it shouldn't be any more burdensome..
The States would end up collecting their money from the county governments which means a large portion of your property tax would end up going to the state).
And the nation would use the Import tax and the Investment Exchange tax to "engineer" the economy, and a direct tax on the states to fill the budget gap if those two taxes aren't sufficient. Which means that, in the end your property tax pays for basically everything.
If you missed the link above, here is a link to my post about why the Property Tax is the "least bad".
At the Federal Level
Eliminate all Payroll Related taxes (reasons), the Capital Gains tax (reasons), the Corporate tax (reasons) and basically anything else other than a Direct Tax on the States (details), an Import tax (details), and a new Investment Exchange tax (details).
At the State Level
Eliminate all Payroll related taxes (reasons), all Sales Tax (reasons), any Corporate tax (reasons), and ALL Tolls (reasons) and basically anything else other than a Direct tax on the Counties (details).
At the County (or City) Level
Eliminate any sort of vehicle and pet fees, cell phone usage fees, local Sales Tax and basically anything else other than the Property Tax (details).
To Sum up
So, to restate that in reverse, the current Property Tax system that is currently the bread and butter of basically all local governments in America today would become the only tax that most Americans ever think about. It would have to go up significantly, BUT all other taxes you are paying would go away so it shouldn't be any more burdensome..
The States would end up collecting their money from the county governments which means a large portion of your property tax would end up going to the state).
And the nation would use the Import tax and the Investment Exchange tax to "engineer" the economy, and a direct tax on the states to fill the budget gap if those two taxes aren't sufficient. Which means that, in the end your property tax pays for basically everything.
If you missed the link above, here is a link to my post about why the Property Tax is the "least bad".
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