Democracy in action puts capital in motion. That creates wealth. Any wealth acquired is due to a civil society with the presence of honest citizens functioning in that democracy. Taxation is an appropriate price for attaining the prospects of wealth that America offers. Taxation can progress capitalism. Well managed taxation and public expenditure can be our greatest investment.
Taxation by democracy is the foundation. For elections, a part of the ballot should include a section for the voter to affirm their preference for budget allocations. This section would include a column listing the main categories of budget expenditures for the appropriate federal, state or local election. It would reference items such as: defense, education, social welfare, transportation, interest, etc. The section could include the current percentage of the actual budget for the expense categories. Next to each item would be a column of spaces for voters to indicate whether they would prefer more, less or the same. Eventually, it could be formatted so voters could insert what percentage they would choose for that category expense. This does not have to be a mandatory directive to the government but an educational and communication process that would develop between citizens, politicians and government administrators. Technology can easily make this possible.
The country will not survive the present system of income tax. It will not solve our economic problems. It is a terrible perversion that has been pieced together over the years. Many thousands of intelligent government employees and private sector lawyers and accountants waste time and energy on overwhelming compliance and therefore severely misallocate precious resources. It is anti democracy. Special interests, behind the scenes, push politicians to manipulate it for their own benefit instead of the national interest. There is no social consensus and therefore people feel no civic responsibility. The only goal for many seems to be evasion while business deploys lobbyists to alter the code for their own advantage. Based on recent legislation, it is not even progressive. The whole system of personal income tax should be eliminated. (Business tax, part 2)
A wealth tax on the assets of the living will not work either. It will make the tax code even more complex and subject to more manipulation. A wealth tax in combination with the income tax will drive more wealthy citizens to hide income and assets and even give up their citizenship.
We need to shift from a tax on personal income to a tax on consumption.
National Sales Tax
We have the greatest distribution system in the history of the world. We should use that to benefit society beyond the delivery of goods and services. It can be a far more efficient and transparent method of tax collection. The tax only needs to be applied at the retail or end user level and can be very small. It can be applied to goods first and if more revenue is needed as a result of voter’s desires, then it can also be applied to services. There would be exemptions for food and medicine. This type of tax is naturally progressive and can be made more so by increasing the rate on luxury goods. This tax can raise more revenue from the wealthy then the current income tax. It will reward savers while taxing those who consume the most. In that regard, it would be environmentally positive.