Progressive Tax Policy

“Taxes are the price we pay for civilization.” – Oliver Wendell Holmes.

Progressive tax structures are not about punishing the rich. They are a recognition that wealthy people derive benefits from being in society. Warren Buffett, Steve Jobs, Bill Gates, Michael Jordan, Oprah, for example, got rich because people buy their products or watched them play basketball or on TV.  Paris Hilton is wealthy because her great-grandfather built a successful business. Their successes are wonderful. But their success should not require me to subsidize their lifestyles.

This tax structure can be implemented by October 31, 2012, and effective January 1, 2013, if not by Congress, then by Executive Order.

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Income Tax

Income is income.A hedge fund operator who receives compensation for his or her work is paid. That work is not interest. The funds are not the operator’s. He or she doesn’t risk his or her own money.  Thus the compensation should be taxed at the rate of Income, not Capital Gains.

Reinstate Income Averaging. Allow Federal Income Tax liabilities over $10.0 Million ($10,000,000.00) to be spread over a 10 year period, with interest accruing at a rate of double the then-current rate of 10-year treasury bills, however allow this to be done three times over a person’s lifetime, and no more frequently than once every 15 years.

Allow income to be summed over a period of four (4) years and taxed over that 4-year period at the average. So if someone makes $1.0 Million then takes three years off, or is out of work for three years and then earns $1.0 Million, he or she is taxed as if he or she earned $250,000 in each of the four years. If someone makes $100,000 over a four year period he or she is taxed as if he or she earned $25,000 in each of the four years.

Wages, Salaries, and Tips

  • Over $100 Million, 57.5%. Plus 5.0% Social Security Insurance & Medicare.
  • Between $10 Million and $100 Million: 52.5%. Plus 5.0% SSI & M.
  • Between $5 Million and $10 Million: 42.5%. Plus 5.0% SSI & M.
  • Between $1 Million and $5 Million: 32.5%. Plus 5.0% SSI & M.
  • Between $100,000 and $1 Million: 22.5%. Plus 5.0% SSI & M.
  • Below $100,000: 17.5%. Plus 4.0% SSI & M.
  • Royalty income should be taxed at the same rates as wages and salary.
  • Income in the form of unsold stock options is tax-deferred and taxed when sold.

Royalties and Capital Gains Taxes – To spur investment by taxing capital gains in a manner that would stimulate savings and investment,

  • A 4% tax on all losses on all trades of equities, securities and real estate, excluding sale of primary residence.
  • A 50% tax on the gains of short sales, plus 4% sales tax,
  • A 50% tax on the gains from the sales of derivatives, plus 4% sales tax,
  • A 60% tax on gains from day trades, plus 4% sales tax,
  • A 50% income tax on very short term capital gains accruing from the sale of assets held for less than or equal to 7 calendar days, plus 4% sales tax,
  • A 30% income tax on short term capital gains greater than 7 days but less than 12 months, plus 4% sales tax,
  • A 25% income tax on long term capital gains of instruments held between 1 and 10 years, plus 3% sales tax,
  • A 20% income tax on very long term capital gains of instruments held for longer than 10 years, plus 2% sales tax,

Inheritances, Windfalls, Lotteries, Poker and Other Gambling Winnings

The first $1.0 Million of Inherited wealth from a parent, partner, sibling, or child ought not be subject to tax in order to compensate for the loss. Such inheritances above $1.0 Million, and all other inheritances, windfalls, lottery and gambling winnings should be taxed at the rates described above.

Energy

Tax waste producing energy systems, such as coal, oil, methane, and nuclear power and use the money to clean up the wastes and build a fuel free energy infrastructure built on clean, renewables such as solar, wind, geothermal, hydro, and efficiency and non-fossil sources of fuel such as waste. The tax rate must be based on the costs to clean up the wastes.

 

Index to recent posts on Occupy Wall Street.

  1. It’s The Feedback; It’s Always The Feedback, 11/3/11, here.
  2. Occupy Wall Street News is Fit To Print, 10/30/11, here.
  3. Occupy Wall Street – Demands, 10/28/11, here,
  4. Progressive Tax Policy, 10/28/11, here,
  5. Occupy Wall Street – Why are They There?, 10/19/11, here,
  6. Corporations Are NOT People, 10/13/11, here,
  7. Protesting Marked Cards and a Stacked Deck, 9/22/11, here,
  8. Saving the Economy, Part Deux, 9/12/11, here,
  9. Nuclear Power: Present Tense, 9/12/11, here,
  10. Saving the Economy, Numero Uno, 9/12/11, here,
  11. Zuccotti, the song, unmixed mp3,    lyrics in pdf,