Best Tax Strategy in a Flat World

Discussion in 'Politics' started by Sactowndog, Aug 18, 2012.

  1. Sactowndog
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    Sactowndog Active Member

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    In 1980, Ronald Reagan introduced a new tax strategy called supply side economics and the result sparked an economic expansion. It didn't reduce the deficit because he simultaneously ramped defense spending which also contributed to the boom but it is hard to argue the reduction had no effect.

    Here we sit in 2012 and the world has changed dramatically. Global telecommunication costs have fallen exponentially and capital markets have gone global. What is the best tax strategy to spur growth in this environment.

    I would argue the best approach is to eliminate the corporate income tax and replace it with these three taxes:

    1) raise capital gains to match the levels of income tax. With no Corporate Income tax double taxation goes away, and we tax residents equally whether they make their money earning a salary or exporting jobs to China and driving up the stock price. This approach rewards patient long term investors whose investment grows tax free just like a 401k today.

    2) Impose a capital exportation tax. This tax would apply to individuals and corporations and would be 15%. If you keep your money invested in the US corporation it grows tax free. If you live in the Bahamas and you want to export income to the Bahamas you pay the tax. If your a company and you need to export profits to pay for all your overseas manufacturing you pay the tax.

    3) impose a higher estate tax. You are free to enjoy the fruits of your labor but not to pass billions on to your heirs that did nothing to earn it. By increasing the estate tax the wealthy will find better uses of their money.

    With no corporate income tax and no increased government debt from deficit spending I think the economy will come roaring back. What are your ideas for a flat world structure?
     
    Last edited: Aug 18, 2012
  2. Sactowndog
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    Sactowndog Active Member

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    Amazing. With a cratering middle class and a surging budget deficit this is probably the single most important issue we face and not a single idea. Instead both sides would rather spout insults and call names.

    Maybe we deserve where we are economically. We seem to stupid to come up with new ideas that fit the new world realities we face. Might as well let the Chinese take over.
     

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