Tax Policy Wonks Needed! Apply Within!!!

Do you dream of writing a brand new tax code? Do you ponder the best ways to raise and collect tax revenue? If you answered yes, then we need to chat!

Oct 30, 2024

Help me craft a 21st Century tax code that would make Adam Smith proud! I am looking for tax policy wonks to help write a comprehensive wealth tax plan that would have the wealthy pay, in Adam Smith's words, “not only in proportion to their revenue, but something more than in that proportion.” When our Billionaire Oligarchs pay something more than in their proportion, we can have a culture, economy and politics that works for all of us.

The following is based on my initial work taking an article, Adam Smith and the Search for an Ideal Tax System, written by Dr. Beverly Moran, Professor Emerita of Law at Vanderbilt University, and turning it into an outline proposal for a comprehensive wealth tax with a high exemption and tax on luxuries.

First, we throw away every last line of our current tax code and start over.

Then we implement a comprehensive wealth tax with a high exemption, so the first $500,000/yr (averaged over 3 years) of income from all sources of wealth is taxed at 0%, and every marginal dollar starting at $500,001 and up (to billions)/yr (averaged over 3 years) of income from all sources of wealth is taxed at 30%-70% for all individuals and corporations. The actual tax rate on every marginal dollar earned starting at $500,001 will be the magic percent that balances the budget, along with revenues from a tax on luxuries and revenues from lease and extraction royalties, from here to eternity.

What makes up all sources of wealth: wages, income from rents and royalties, net profit from a business, estate inheritance (spousal inheritance exempt), gifts (spousal gifts exempt), capital gains, earnings from wagering, life insurance payouts (spousal payout exempt), dividend payments and loans against the value of stock or other capital. All sources means all sources.

End stock buybacks. End the carried interest loophole. End all tax deductions, subsidies, tax credits and all other tax expenditures for all individuals and corporations. End special tax vehicles like 401(k), IRA and non-profit corporations including churches and religious institutions. Tax every single dollar of comprehensive wealth exactly the same for individuals and corporations, no exceptions.

Institute a 5% flat Federal sales tax on luxuries that every single American pays when they purchase a luxury. The taxes generated from the 5% flat Federal sales tax on luxuries will lower the tax rate on comprehensive wealth over $500,000 to whatever the rate needed to balance the yearly fiscal budget.

Excise taxes only account for 1.5% of Federal tax revenue each year. Should the government end excise taxes if all necessary revenue to balance the budget is raised by a comprehensive wealth tax, a tax on luxuries and royalty revenues from public leases and mineral extraction? Do excise taxes serve a policy function, for instance a high excise tax on cigarettes to reduce smoking, that justifies their remaining a policy tool? We will figure that out together!

The Federal government charges lower lease and royalty rates for oil and gas extraction on federal lands than most states charge within their boundaries. Should the Federal government increase the cost of leases and royalty rates to match the highest charging state, Texas? The US government collects almost nothing from non-oil and gas mineral rights leases and extraction due to a law from 1872! Yes, that is not 1972, but from 1872. Should the Federal government start brining in income from non-oil and gas mineral rights leases and extraction? We will weigh the costs and benefits to design our tax policy accordingly.

How do you fit in? I need help determining how much comprehensive wealth is earned each year, how many individual and corporate taxpayers earn over $500,000/year from all sources of wealth, what is the correct tax rate on comprehensive wealth, what goods and services are defined as necessities versus luxuries, how much do Americans spend on luxuries each year, what is the correct tax rate on luxuries, and lots more. The end goal is to create a working tax plan with revenue estimates based on real-world data that can be shared, tested and debated by politicians, policy-makers and the public.

If you are interested in joining me on this taxing, yet most rewarding, journey please reach out. Maybe you know someone who fits the bill to help out. If so, please forward them this letter and invite them to connect with me. Together, we can create a culture, economy and politics that works for all of us.