Five Ideas For the Next Century of Taxes
Tomorrow is the 100th anniversary of the federal income tax. Thank you, federal income tax, for all the things you have bought this country, except the wars! On this auspicious anniversary, here are five tax ideas to make the next 100 years even better.
1) Abolish the payroll tax. Not only is it awfully regressive, but it's capped in order to exempt the very rich from paying it on most of their earnings. Get rid of it in the name of progressive taxation and fairness.
2) Raise taxes on the very rich. America today has a level of income inequality not seen since the Gilded Age. This is not good. Vast income and wealth inequality is bad for a democratic society. Plus, the simple fact is: people do not need tens of millions of dollars. Especially not while tens of millions of other people are destitute and suffering. A maximum income would be nice. But in the meantime, a steep progressive tax rate on the earnings of plutocrats would make our country a better place.
3) Tax investment income as income. "Income," a word that a normal person should be able to comprehend easily, is money that you get. Whether you're paid money by the place you work, or whether you get money from investments you've made in the stock market, either way, it is money, and it's yours. For all practical purposes, income is income. Capital gains should not be taxed at a lower rate than regular earned income. Not only because of common sense, but because investment income overwhelmingly accrues to the rich. This tax difference is a huge structural barrier to economic inequality.
4) Seek and destroy offshore tax havens. Easier said than done, yes. But when the world's biggest (and most admired by liberals!) corporations are using the globe as one big Stratego board to avoid paying their fair share of taxes to anyone, it's time for nations to start seriously working to ensure that—at the very least—the routine use of tax havens is not considered to be ethical corporate behavior.
5) End municipal tax breaks for corporations. U.S. cities, counties, and states desperate for jobs compete with one another to offer companies the sweetest possible package of tax breaks in order to locate themselves in a particular place. This is a great deal for companies, but a monumental loss for the nation as a whole. A company being handed corporate welfare in order to choose one U.S. state over another is nothing but a transfer of public wealth into private hands. Stop it.
And give yourself a pat on the back, fellow American. You're a taxpayer! You make this whole thing work.