No Turbo Tax for House Budget Chairman Paul Ryan

I am really taken back by the fact that Rep. Ryan feels the need to use an accountant for his tax return. He says, “I want to make sure I do not mess it up” and that says a mouthful about the need for tax reform.

At least when it comes to specific tax reforms he admits there is not, “total consensus on the specifics … you got some guys who are the fair tax guys, you got the flat tax guys, you have the in-between guys.” He also claims to reject those who caution, “don't take risks, don't be bold” because he thinks, “people are sick of that and cynical” As long as he keeps an open mind, and can put aside the more divisive spending issues, there is hope for the 2-4-8 Tax Blend – the boldest and fairest plan of all. The public deserves to know what Mr. Ryan thinks about it.

The 2-4-8 Tax Blend broadens the tax base by taxing net wealth at 2% (above a $15,000 exemption), retail sales at 4% and income at 8%. It would yield $2.6 trillion – ($400 billion more than FY 2011 federal revenue). The tax blend is progressive even though rich and poor would pay the same tax rate. Even the “fair and balanced” Bill O’Reilly (a/k/a the Factor) supports a national sales tax (of 3%) as a necessary component of tax reform. The concurrent elimination of payroll, capital gains, estate and gift taxes; and a significant reduction of the corporate income tax rate to 8%, should guarantee near universal support from social liberals and business conservatives alike. The winners and losers (if there be any) do not follow any traditional political spectrum.

Please think outside the box before you react. Try to contrast a 30% income tax with an 8% income tax joined with a 2% wealth tax for each of the next 11 years. The latter combined income-wealth tax would permit an individual to save and keep 22% more salary each year (conservatively assuming the 2% wealth tax was offset by 4% investment interest). Now that’s fairness and real economic mobility!

Corporations would feel less of a need to influence politicians once tax incentives are off the table. How would an 8% corporate income tax affect jobs and the economy? Those answers are better left to your talents and dreams for a brighter future.

Eugene Patrick Devany, JD. MPA

www.TaxNetWealth.com

Eugene Patrick Devany of NY 7:22PM February 16, 2012