Tax Policy and Reform Ideas

Some thoughts on our current tax code and a suggestion for reform:

A dollar earned is still a dollar, no matter its origin - interest, dividends, cap gains or "ordinary income". It should be taxed the same way on the same progressive scale. Allowing cap gains, interest, dividends and carried interest to be taxed at 15% coupled with ridiculous tax credits, allows for such disproportionate distortions of income profiles that people who make billions pay a lower % than someone making $150K. Historically income equality has been one of the primary causes of revolutions and societal upheaval. There is simply no justification for a wealthy individual who can take advantage of such income taxonomical classifications to pay a lower rate on very high amounts than someone who actually works for a living - hence Buffets angst re: his secretary and cleaning staff.

Proponents point to the issue of "double taxation".. the company already pays taxes. Two points: 1. this is not new - double taxation for companies has always existed. 2. most companies pay no where near the statutory rate - they have tremendous a amount of loopholes to take advantage of, espcially if they have international operations. Most big companies play in the low single digits. Corporate tax collections are at near 60 year lows as percent of GDP.

One proposal would be to: 1. tax all income regardless of origin on the same progressive rate 2. eliminate corporate taxes altogether. 3. tax anyone who invests in US equities at the same rate (currently cap gains for non-citizens and residents are tax free).

This would a) encourage investment stateside b) eliminate a massive industrial-lobby complex built upon creating tax loopholes - the attorneys, tax firms, lobbyists, accountants etc. - probably in the 100's of billions saved.