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The 2% 200K Plan
Tax Reform Proposal
Author: Liberty Fairbanks, November 4, 2011
Repeal federal income taxes. Replace it with a simple Net Worth calculation.
Premise: Federal taxes based on a households’ income has never been a good idea. The wealthy have lobbied to keep tax discussions focused on looking at percentage of income, with thousands of pages of tax code with massive deductions which only the wealthy can afford to participate in, thereby benefiting from deductions which average families cannot afford. The 1% and top 10% of wealthy people do not want taxes to be based upon actual wealth. Instead of income, the 99% should be telling government to tax based upon actual wealth, as determined by total net worth.
Proposal: Implement as federal law, a Net Worth Tax of just 2% of a corporate entities’ or households’ net worth of $200,000 or greater, while implementing a balanced budget law which forces Congress and the federal government to limit spending to no more than revenues collected, and also affirms that the federal government cannot raid the Social Security fund. Greatly reduce spending by the federal government, to eventually appropriate only necessary expenditures which are authorized by the US Constitution. As the balance sheet of the federal government improves by taking these steps, reduce the income tax proportionately, eventually eliminating the income tax entirely within four years. Remove the thousands of pages of tax code which create tax deductions. As the balance sheet of the federal government further improves, reduce, and eventually eliminate the Net Worth Tax.
Simple Calculation of the proposed Net Worth Tax:
Total Assets - Total Liabilities = Total Net Worth
Total Federal Tax = (Total Net Worth - $200k) x 2%
Applicability of the Net Worth Tax: All households and all corporate entities with Total Net Worth of $200,000 or greater. No other deduction beyond the first $199,999 of Total Net Worth.
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