The "No-Tax" Plan

[Pryderi]

http://fairtaxfraud.com/alternatives.asp#notax

The No-Tax Plan

How about a plan where everything you earn is tax free - period. No income taxes, no sales taxes, no business taxes, no fees or tariffs. As long as you earned the money by using your muscles or your brain you get to keep 100 percent, and your can do or buy anything you want with it without taxes. Get your entire paycheck, spend or save without any taxes, fees, tariffs, or anything that would increase the price of good or services. Absolutely no business taxes as long as all your employees work in America.

That's not the half of it. There will be so much money coming into the treasury that every American can have 100 percent free health care, free prescription drugs, free surgeries, free dental and free optical, and even free plastic surgery! You can have free education, free college, free classes, free certifications. There will be enough money in the first year to pay off the national debt, fund the military at current levels, fix all the roads and bridges, and help every poor person to get off welfare.

So what's the catch? Money you didn't earn or work for is taxed at 50 percent - no exceptions. Why? Because it's welfare and that is un-American. Money that you get for free is taxed. This includes inheritance, gifts, lottery winnings, gambling winnings, interest income, income from stocks, bonds, etc. Companies that outsource labor will have to pay a large tax. (because their profit wasn't worked for or earned by Americans) Privately held corporations must convert to publicly held corporations or be liquidated when the owner dies. It's a very simple concept. Retirement funds and 401K plans are tax free because you earned them and the yearly contributions are limited.

Where does all the money come from? Currently just the top few percent of the population owns or controls 70 percent of the wealth. Notice I said wealth and not income. Income is a fanciful term dreamed up by tax lawyers and tax accountants that has virtually no basis in reality. A billionaire can, and sometimes does, show zero income on his tax return. (If you own the company you can reward yourself in many other ways than giving yourself a high salary). Wealth, on the other hand, is net worth. All the things of value that you own like property, houses, boats, stocks, bonds, investments, etc. These are things that can not be easily removed from America or hidden like income can. They can be accounted for and seized if necessary. There is so much wealth in America that taxing wealth could fix all of Americas debt problems in one tax year. While the FairTax billionaires whine about how people hide money outside the country, with the No-Tax Plan that all goes away because real estate can't be moved, stocks and bonds are registered, and banks won't lend people money without collateral.
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There's more information at the link, but this idea intrigues me. It looks like it would help prevent/limit the American Aristocracy.

[dkf]

1. It would result in a capital flight to other countries.

Brains and labor without capital isn't a recipe for a thriving economy.

I would say this is the problem now...the unemployed don't have the capital they need to start new businesses so they go wasted. AA

[David Gill]

2. Start out:

How about just bringing the capital gains tax and the estate tax back to Clinton-era levels? There's no debating there was a "brain drain" in the 90's, is there?

[jmowreader]

3. The class warfare thing is getting real old, guys

Most Really Rich Guys get paid either largely or entirely in stock--consider the man who runs Nvidia, who makes $34 million total per year and of that, less than $10,000--yes, that's ten THOUSAND dollars--is in cash. If these guys get wind of a "no tax on cash, 50% tax on stock profits" system they'll go to 100 percent cash before it takes effect and the country will be completely fucked.

Besides, the reality isn't that the rich make too much, but that the rest of us make too little. If they took all the money that a Really Rich Guy makes and divided it equally among the people who work for him...

WALMART (WM)
Really Rich Guy who runs it: Mike Duke.
2011 compensation: $1.232 million cash, $12.652 million in restricted stock. (Source: Forbes.)

Walmart says they have "more than 2.1 million associates." If you made Mike Duke work for free and divided his salary among all those people, here's the breakout:

If you monetized his stock: $6.61 per person
Cash compensation only: 59 cents per person

To fix the massive wealth inequity in this nation you are going to have to correct what working-class people make, not what rich people make.

[TheKentuckian]

4. We make too little, they make to much. It doesn't matter either way because the distribution is

insanely out of whack.

There are X amount of dollars to go around, giving almost all of them to a few people is a train wreck economy.

I also imagine the tiresome class warfare will end when it is no longer prosecuted by the wealthy to engorge their worthless hordes further.