This is a novel concept I found hiding in the back of a book entitled “Winning America’s Second Civil War”. It’s more important, potentially, than the rest of the book.
Basically, our tax rate is levied on all transactions upon sale, at the level of 1.13%. All corporate and Indvidual taxes are eliminated.
The rate was developed by taking government expenses in total and dividing it by gross transactional volume, including all financial and home sale transactions.
All the tax infrastructure (IRS, CPAs, tax planners) is eliminated. No savings are mentioned, but they would probably be huge. Presumably, the other government agencies will take a share of the total, and they’d have to submit their budgets to a central authority, like the Office of Management and Budget (OMB). No congressional fights. No side deals, unless approved by congress. If the executive wants to spend $400 billion on school debt relief, submit it to Congress, approve it and out it goes. Or not, since the Supreme Court ruled that the request had to go through Congress.
State and local taxes would remain unchanged, so states still compete for businesses to locate.
The authors, DeBacker and Jensen, think that the tax might be a real draw for industries to locate somewhere in the US. By extension, world tax rates could also lower to this level.
Another big question is implementation; the authors recognize this, but don’t really have steps in their short article to address this question.
Tantalizing, eh? I plan to let Trump know, as well as some economists outside the two authors. And, I plan to talk to Encounter Books, their publisher to see if the weak areas can be expanded into an entire standalone book.