Here’s a proposal that will never fly, because it gores too many oxen. People who like one part will detest another. And those who like the second will hate the first. Nevertheless, I offer this as a set of ideas. Each item has arguments in its favor. Here is a summary of what I propose:
- Eliminate corporate income taxes completely. It has been pointed out many times that taxing corporate income, and then taxing dividends distributed to shareholders is double taxation. The earnings from corporations should be allowed to “trickle down” to employees and shareholders. That’s not all. Corporations are not people, and they are not citizens, regardless of what the SCOTUS said in the Citizens United decision. Corporations cannot serve in the armed forces, they can’t get married and have children, and they don’t vote or have free speech rights. They should be prohibited from participating in the political process through campaign contributions or advertisements in the media that concern anything other than their business products and services. We need to get their money out of government.
- Eliminate farm subsidies. They are often defended on the grounds that they help family-owned small farms, but most of the money goes to agribusiness who use their profits to buy up the small farms.
- Eliminate all tax exemptions for churches and all charities. These organizations make use of government services, just as other businesses do. They shouldn’t get a free ride.
- Eliminate tax deductions for contributions to charities. These are uncontrolled “expenditures” by government, a silent drain on tax revenue. If certain charitable activities are deemed worthy of government support, that should be done as direct subsidies, so that the amounts and their benefits can be examined and debated.
- Eliminate tax deductions for contributions to churches. If people want to give money to their church, that’s fine. Government should neither encourage or discourage it
- Eliminate the Capital Gains Tax Loophole so that all income is taxed at the same progressive rate. Why did it ever make sense to tax income from workers’ wages at a higher rate than income from investments? The argument that this would discourage investment is specious. What else can a person do with her savings that offers a better return?
- Provide single payer health insurance for all citizens, and eliminate tax deductions for medical expenses. If wealthy people want to pay for fancier medical care, that’s their business, but government shouldn’t be involved.
- Eliminate the home mortgage interest deduction. Government should have no interest (pun intended) in whether an individual buys or rents. The argument that homeowners create a “stable society” is nonsense. Renters are just as stable as homeowners. In today’s employment environment, workers must be mobile, ready to change jobs and move frequently. A home is an encumbrance, and selling it is a major cost, making only realtors smile.
- Add a Net Worth Tax on estates valued above $10M. Rather than detail the reasons for this, here is a link to an article that I wrote earlier this year on the subject: https://www.patheos.com/blogs/tippling/2019/03/15/income-tax-vs-wealth-tax/
Here is a summary of projected tax revenues for next year. Note that corporate taxes are 7% of total. Eliminating them will require adjustments in the other categories. I will not attempt to propose new targets, or how government spending should be modified, except to say that I think individual income tax should be far more progressive, as it was in the past.
Estimated Federal tax revenue for 2020:
Total revenue: $3643B
Excise Taxes and Tariffs: $157B
Estate Taxes and MIsc: $64B
Social Security, Medicare, etc: $1295B
Federal Reserve Earnings: $49B