SDG Target 10.3.1, 18.104.22.168 & Target Action Plan #32
32. Reform Taxation. Eliminate the very regressive sales tax and all other taxes except for one - a progressive property tax on the net assets of all individuals, corporations, businesses and other entities with more than $1 million in net assets. Provide generous tax deductions based on worthiness of the charitable contributions of the taxpayer. Simplify all tax codes and remove all loopholes.
(Updated May 16, 2017)
Please provide proposed additions and recommendations to PeopleNow.org by email RefineThePlan@PeopleNow.org and fax 703-521-0849.
This Target Action Plan - TAP #32 must be implemented in coordination with TAP #45 Plan to Rapidly Implement UN SDG TAPs described at www.PeopleNow.org.
Charging the poor and hungry a sales tax on food and other necessities of life and spending the people’s money on illegal wars that have impoverished and made refugees of millions is criminal and inhumane.
Massively widening wealth inequalities and loopholes—in very complex and voluminous tax codes make a complete overhaul necessary.
This Action Plan will reduce the largest wealth divide of all times. The world has 2,235 billionaires, and 211 thousand individuals with more than 30 million dollars in net-worth. 987 million people in the world live in extreme poverty— on less than $1.25 per day (456.25 dollars per year). The world’s gross product is about 72 trillion dollars. The population is about 7.3 billion. If those living in extreme poverty get an equal share they would get $27 per day ($10,000 dollars per year, $40,000 per year for a family of 4).
The fact that no matter how progressive income-taxes become, progressive income-taxes alone will not reverse the wealth-divide. In the title of his Nov 18, 2012 New York Times article, Daniel Altman states the obvious: To Reduce Inequality, Tax Wealth, Not Income. In his article, which is attached below, Mr Altman also states that “Scholars have recommended a wealth tax in the past and explains his proposal in detail and its merits.
Since individuals can have funds invested in corporations and banks can own mortgages and loans, there should be a progressive net-asset tax on all individuals and corporations, companies and other entities with more than $1 million in net-assets.
Net-assets include all the value—of all land, property, cash, stocks, bonds, retirement funds, accounts payable etc.—minus all debts, mortgages, bills etc., on individuals and businesses and corporations.
This property-tax on net-assets-approach expands Thomas Picketty’s proposed “wealth tax” in his book: Capital in the 21st Century.
Comprehensive information regarding the value to society education system for the public, public officials and in particular the 1%.
Table of Contents
32.4.1 Enact Very Progressive Property Taxes on the Net Assets of All Individuals, Corporations, Companies and Other Entities with More than $500 Thousand in Net Assets
32.4.2 Provide Generous Tax Deductions—Based on Worthiness—of the Charitable Causes Being Supported
32.4.3 As the Net Asset Property Tax is Implemented Phase Out/Eliminate Income, Sales, State Corporate and all Other Taxes
32.4.4 Allow/Encourage Corporations, Companies and Business Owners to Reduce Their Taxable Net Assets by Allowing Employees to Buy a Percentage of the Real Property in a Business with Their Pension Funds and Other Assets
32.4.5 Comprehensive information, education, and training for this Action Plan
will be developed in the Global Factual Information and Education Program
32.4.6 End tax havens and recoup the missed taxes on funds in tax havens and return funds—from these tax havens—to U.S. Banks.
32.4.7 Eliminate all unjust-tax loopholes
32.4.8 Congress pass the Bring Jobs Home Act or equivalent that would eliminate the tax breaks that encourage companies to close factories here and send jobs and work to countries like China to avoid paying taxes
Provide a universal plan to enact very progressive property taxes on the net assets of all individuals, corporations, companies, businesses and other entities with over $1 million in net assets. Provide generous tax deductions for charitable donations depending upon the worthiness of the charitable-cause. Eliminate income, sales, estate, corporate and all other taxes at all levels of government. And simplify the tax code.
The objectives of this plan includes
32.3.1 Provides a significant part of the funds required to refine and implement the SDGs and have a Peaceful, Prosperous, Just, Sustainable World
32.3.2 Markedly reduce the high levels of inequality and help permanently end poverty.
32.3.3 Greatly simplify and reform tax codes and practices, reduce the cost of tax collections and ultimately provide everyone the opportunity to do meaningful work and use their net worth and earnings wisely.
32.3.4 Help divide up the”too big to fail” financial institutions.
32.3.5 Depending upon their time-of-employment and skills, phase-in workers—as co-owners—with their retirement-pay in the real-property of the enterprise
32.4.1 Enact Very Progressive Property Taxes on the Net Assets of All Individuals, Corporations, Companies and Other Entities with More than $500 Thousand in Net Assets. Net assets include cash, bank deposits, stock, bonds, gold bullion, retirement accounts, and the value of all land, property, buildings, cars, trucks, equipment and mineral right, accounts receivable, etc. minus all debts, mortgages, bills, accounts payable etc. inside and outside the U.S.
22.214.171.124 Entities include corporations, companies, hedge funds, shadowy banks, PACS, super PACS, and other entities. According to Forbes.com, the 534 largest U.S. corporations and companies had over $38 trillion of net assets including over two trillion in cash in early 2013. These companies are mostly not investing or hiring.
126.96.36.199 Families in the U.S. have more than $70 trillion in net assets.
Some of this $70 trillion is double-counted in the corporations $38 trillion. It is safe to say that there is at least $85 trillion in taxable assets-and-property, most of which is concentrated in the wealthy 1%, the too big to fail banks, Wall Street firms, and large corporations
32.4.2 Provide Generous Tax Deductions—Based on Worthiness—of the Charitable Causes Being Supported. The U.S. has 375,000 millionaires, About 70,000 of these millionaires have over $30 +million, and about six hundred of them are billionaires. Encourage prosperous individuals to adopt/support
188.8.131.52 Countries, parts of countries, states, cities, towns, neighborhoods
184.108.40.206 Important causes and projects. For example, T. Boone Pickens could fund and help manage the development of wind power. Others could take on water, solar power, prison reform, clean air, power distribution, or “adopt” cities, entire countries, etc. These projects should roughly mirror the congressional committees and government departments and agencies in a newly re-organized Congress and Executive Department as outlined in SDG Target Action Plan #12 of the Common Agenda. Each major donor would coordinate his work with the appropriate committee/subcommittee and department/division. Another example—according to Wealth-X—there are 500 individuals with net assets of over $30 million in Washington DC. one or more of these millionaires could adopt the Homeless Shelter in the old DC General Hospital. This would be therapeutic to the donors in particular if they take a non-paying, active cooperative role in the projects that they support. Major donors would also be recognized for their donations and works as was Andrew Carnegie for the 3,000 libraries and many schools and universities he established in the United States and other countries.
32.4.3 As the Net Asset Property Tax is Implemented Phase Out/Eliminate Income, Sales, State Corporate and all Other Taxes including the many minuscule taxes on phone, cable and utility bills as the property tax is implemented. A list of many of these taxes are included in the document Taxes that Arlington Residents Pay at www.WeThePeopleNow.org/arlington_va_taxes.pdf
32.4.4 Allow/Encourage Corporations, Companies and Business Owners to Reduce Their Taxable Net Assets by Allowing Employees to Buy a Percentage of the Real Property in a Business with Their Pension Funds and Other Assets. For example allow factory workers and managers to own part of the building, machinery, land etc. of factories where s/he is working, the restaurant workers could own a part of the stoves, tables, dishes, utensils, building, etc.
32.4.5 Comprehensive information, education, and training for this Action Plan will be developed in the Global Factual Information and Education Program
Once the majority of the people—with less than 1 million dollars in net-assets—understand that they will pay no taxes, they will be for this. This is almost all of the 99%. Almost all of the 99% will pay no taxes.
Once the 99% understand the value to society—for example, saving the lives of 17,000 children from dying per day due to malnutrition and preventable diseases—they will accept these reforms.
32.4.6 End tax havens and recoup the missed taxes on funds in tax havens and return funds—from these tax havens—to U.S. Banks.
32.4.7 Eliminate all unjust-tax loopholes.
32.4.8 Congress pass the Bring Jobs Home Act or equivalent that would eliminate the tax breaks that encourage companies to close factories here and send jobs and work to countries like China to avoid paying taxes.
Altman, Daniel, "To Reduce Inequality, Tax Wealth, Not Income," New York Times, November 18, 2012, http://www.nytimes.com/2012/11/19/opinion/to-reduce-inequality-tax-wealth-not-income.html?nl=opinion&emc=edit_ty_20121119&_r=0&pagewanted=print
Both the income and wealth divides (inequality) between the richest individuals and the middle class and poor are at record highs and continue to grow exponentially as compound interest compounds on compound interest.
Richard Wilkinson and Kate Pickett in their book The Spirit Level: Why Great Equality Makes Societies Stronger, show that as inequality increases, social ills, including crimes, suicides, drug abuse, child abuse, violence, divorce, bad health and the stress on both the wealthy and poor increases dramatically.
It also shows that even the wealthy are more stressed in societies with greater inequality.
The following is paraphrased from the article What Does the Bi-Partisan Debt-Ceiling "Compromise" Mean for Workers? by Josh Lucker and other sources.
The wealthiest 1% of Americans own 42% of the wealth, while the top 10% own 85%. The rate of taxation on the wealthiest 400 Americans averages only 18%. Taxation on the highest earners has declined from a rate of around 90% in the 1960's to 35% percent today. Corporate tax rates have had a similar decline, from 50% in the 60s to around 30% today. Two thirds of U.S. corporations, one million two hundred thousand companies, paid nothing in taxes between 1998 and 2005, according to a report from the Government Accountability Office, which also reported that these "no tax" corporations made $2.5 trillion of dollars in sales. 25% of these "no tax" corporations were "large corporations" by the GAO's standards.
+ Senator Bernie Sanders has compiled a list of large U.S. corporations that don't pay any taxes, His list include the likes of Exxon Mobil, Bank of America, General Electric, Chevron, Boeing, Valero Energy, Goldman Sachs, Citigroup, ConocoPhilips, and Carnival Cruise Lines. While this is obviously far from a comprehensive list, if one were seriously concerned with "balancing the budget," "averting national crisis," "meeting our obligations," and "paying our debts," the corporations listed above should be the first to "tighten their belts."
Income from work is taxed at a much higher rate than income from investments.
Some individuals hide funds and don’t pay taxes on income from deposits in offshore-foreign banks or investments in foreign or multinational businesses.
Under current unfair, unjust laws, home and auto owners pay property taxes on their homes and automobiles. Banks, corporations and their employees and stockholders pay no taxes on mortgages, loans, stocks, derivatives, gold bullion, mineral rights, etc. that they hold.
No matter how progressive income taxes are, if an individual spends less than his total net income after taxes, his/her net assets will increase. If a corporation’s revenue exceeds expenses, that is they have a profit, the corporation’s wealth will also increase.
The New York Times
November 18, 2012
To Reduce Inequality, Tax Wealth, Not Income
By Daniel Altman
WHETHER you’re in the 99 percent, the 47 percent or the 1 percent, inequality in America may threaten your future. Often decried for moral or social reasons, inequality imperils the economy, too; the International Monetary Fund recently warned that high income inequality could damage a country’s long-term growth. But the real menace for our long-term prosperity is not income inequality — it’s wealth inequality, which distorts access to economic opportunities.
Wealth inequality has worsened for two decades and is now at an extreme level. Replacing the income, estate and gift taxes with a progressive wealth tax would do much more to reduce it than any other tax plan being considered in Washington.
When economists try to measure inequality, they typically focus on income, because the data are most readily accessible. But income is not always a good gauge of economic power. Consider a group of people who all have high incomes but differ widely in their wealth. Who’s going to get into the country club? Who’s going to have the money to finance a new venture? Moreover, income data may not reveal the true economic power of people who are retired, or who receive their pay in securities like stocks and options or use complex strategies to avoid taxes.
Trends in the distribution of wealth can look very different from trends in incomes, because wealth is a measure of accumulated assets, not a flow over time. High earners add much more to their wealth every year than low earners. Over time, wealth inequality rises even as income inequality stays the same, and wealth inequality eventually becomes much more severe.
This is exactly what happened in the United States. A common statistical measure of inequality is the Gini coefficient, a number between 0 and 100 that rises with greater disparities. From the late 1970s through the early 1990s, the Census Bureau recorded Gini coefficients for income in the low 40s. Yet by 1992, the Gini coefficient for wealth had risen into the mid-70s, according to data from the Federal Reserve.
Since then, it has risen steadily, to about 80 as of 2010. In 1992, the top tenth of the population controlled 20 times the wealth controlled by the bottom half. By 2010, it was 65 times. Our graduated income-tax system redistributes a small amount of money every year but does little to slow the polarization of wealth.
These are stunning changes. The global financial crisis did make a dent in the assets of the wealthiest American families, but its effects for the bottom half were utterly destructive; the number of owner-occupied homes has fallen by more than a million since 2007. People in different socioeconomic strata are living ever more different lives, with dangerous results for society: erosion of empathy, widening of rifts and undermining of meritocracy.
American household wealth totaled more than $58 trillion in 2010. A flat wealth tax of just 1.5 percent on financial assets and other wealth like housing, cars and business ownership would have been more than enough to replace all the revenue of the income, estate and gift taxes, which amounted to about $833 billion after refunds. Brackets of, say, zero percent up to $500,000 in wealth, 1 percent for wealth between $500,000 and $1 million, and 2 percent for wealth above $1 million would probably have done the trick as well.
These tax rates would garner a small portion of the extra wealth America’s richest families could expect to accrue simply by investing what they already had. The rates would also be enough to slow — if not reverse — the increase in inequality. To see how the wealth tax would work, consider a family with $500,000 in wealth and $200,000 in annual income. Right now, they might pay $50,000 in federal income tax. With the wealth tax brackets described above, they would pay nothing. On the other hand, a family with $4 million in wealth and $200,000 in annual income would owe $65,000. Most families that depend on their wealth for their income would pay more, and most that depend on their earnings would pay less.
In fact, the majority of American families would receive an enormous tax cut. Some would owe only payroll taxes (for Social Security and Medicare) and state and local taxes every year, and others would pay less in wealth tax than they did in income tax. Taxes on earnings, capital gains, dividends and interest, all of which may distort decisions about working and investing, would disappear.
For most families, whose wealth may never reach $500,000, all disincentives to save would vanish. And families trying to accumulate a fixed amount of wealth for retirement or their children’s college fund could devote less of their incomes to saving, since in most cases the wealth tax would take a smaller bite of their interest, dividends and capital gains than the current income tax. Though the remaining minority of families subject to the wealth tax might end up saving less and spending more, this shift would also reduce inequality; the dollars they spent would be more likely to end up in the pockets of people with less wealth.
Scholars have recommended a wealth tax in the past, but not as a replacement for the income, estate and gift taxes. Indeed, phasing in the new tax would present some complications. People who already paid income tax on the money they used to buy their assets would not want to pay a new tax on them. Yet a reduced wealth tax — perhaps 1 percent in the top bracket to start — would collect less from many of them than the current income tax.
Naturally a cottage industry would spring up to help wealthy people lessen their exposure to the new tax. The federal government would need new rules for the reporting and valuation of assets, as well as new auditing processes. Levying the tax at the family level — perhaps parents and children up to a fixed age — might make it harder for the wealthy to reduce their tax liability by allocating their assets among multiple family members to reduce the wealth-tax liability.
By contrast, people with wealth tied up in property and small businesses might have real trouble coming up with enough cash to pay the tax. This is a problem that can be solved, or at least mitigated, by making payment periods flexible over several years. In addition, new financial products could offer cash for tax payments, either as loans or in return for partial ownership of assets — much like home equity loans do today.
States with income taxes would have to decide whether to switch to the wealth tax. Because some states collect tax from commuters who work within their borders but live elsewhere, an income tax might still be attractive. Yet rather than having two systems, it might be better to apportion state wealth taxes between the states where families live and work.
The benefits of the wealth tax would make these adjustments worthwhile. The economy would allocate opportunities more equitably and efficiently, and the tax system would become simpler. It would help working class people to realize their potential and ensure that society did not become unduly polarized. Of course, we can do much more to improve access to opportunity for all Americans. But a wealth tax would be a good place to start.
Daniel Altman, an adjunct associate professor of economics at the New York University Stern School of Business and a former member of the New York Times editorial board, is writing a book about what would happen if the United States defaulted on its debts.
A version of this op-ed appeared in print on November 19, 2012, on page A21 of the New York edition with the headline: To Reduce Inequality, Tax Wealth, Not Income.