Tax Reform for Fairness, Job Creation and Simplicity

Fairness

Fairness requires that people and organizations that produce pay not only for their capital and labor inputs, but also for our social heritage (physical and social infrastructure) that makes their production possible. Value added taxes (Vat), progressive personal and corporate income taxes and progressive estate taxes collect this debt which wealthy earners owe. VAT taxes are not progressive, but the other taxes are very progressive if they have a large deductible based upon medium incomes and estates.

Job Creation

Substituting VAT taxes for our job (payroll FICA) taxes discourages consumption which conservation requires that we discourage and encourages job creation, especially by smaller companies. Job income can still be reported to serve as a basis for determining social security payouts. Together with substituting universal government paid health insurance for employer paid health insurance, removing the FICA tax will greatly enable job creation.

Simplicity

VAT taxes and progressive income and estate taxes with limited deductions (housing deductions would be for only up to the median priced house.) will be relatively simple to calculate and administer. Only half of all people and corporations with income would have to file an income tax return.

Doing this tax shifting will do much to reduce financial disparity which has been destroying our middle class. More financial equality with a vibrant middle class will do much to enable liberal politics. Dave Thomas