A simple but unpopular idea
by OrangeJubilee (2024-02-19 11:52:24)

In reply to: PBR Poll on Possible Federal Revenue Enhancements....  posted by Raoul

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I have long felt taxing 100K earned as a plumber and 100K in investment returns from a trust fund baby differently are stupid.

All income, wages, dividends, cap gains, carried interest, EVERYTHING pays:

2.9% for Medicare, no cap (current law for wages)
12.4% for social security with no cap (rate is current for wages but capped)
The current marginal rates with no deductions (standard or itemized) deduction.
Everyone gets a 7K credit to start, fully refundable (amount could be tweaked.)

For businesses, they are all taxed on US-source income at the top marginal rate, plus 2.9% plus 12.4%. However shareholders are credited with their share of taxes paid by the corporate, effectively ending corporate taxation for domestic shareholders.

Seems to me this would generate way more money than we do now and be very simple. If people want to complain about LT gains being partially inflation, they would have the option to pay to increase basis annually if they wished.

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