A Proposed Constitutional Amendment because Income is Not the Same as Wealth (Vanity)

vanity ^ | Jan. 29, 2012 | piytar

[piytar]

Obama and other Democrats are constantly harping on taxing the "rich" or the "wealthy," but their proposals are all about taxing income. Well, income is not wealth, and the wealthy often have little income. The reality is that all income taxes do is punish the productive and job creators. Income taxes also are very useful for the wealthy and powerful to keep their club exclusive by making it nearly impossible for most people to become wealthy.

In other words, income taxes are class warfare by the mega-wealthy against the middle and upper middle class. They want to keep their club exclusive.

As a personal example, I just got a new job. Very good income. However, as a result of trying to create a small business and failing, I also have a lot of debt including tax debt. I will likely see about 15% of my income. The rest will be taxed away. But according to Obama and the Democrats, I'll be approachig "wealthy."

What's the solution? See below. This is a rough draft for discussion purposes, but I think it's a good idea.

OK, will don my flame retardant suit now...

[piytar]

Whereas income taxes punish productivity;

Whereas the productive and job creators may have high incomes but little real wealth;

Whereas tax policy should encourage productivity and job creation;

Whereas the wealthy often have little income;

Whereas the wealthy often hold their wealth indirectly;

Whereas the general acquisition of wealth should not be punished but rather encouraged; and

Whereas the wealthiest should be incentivized to encourage the general acquisition of wealth;

The Constitution is hereby amended as follows:

Section 1: The Sixteenth Amendment is repealed.

Section 2: The federal government, all state governments, all city governments, all county governments, and all other political entities are forbidden from levying income taxes, as follows:

(a) The federal government, all state governments, all city governments, all county governments, and all other political entities are ordered to repeal any and all income taxes within one year after ratification of this Amendment. Failure to carry out this subsection by a political entity shall be a felony on the part of any and all members of the relevant government entity who voted or ordered against doing so or were responsible for doing so and failed to act. Such felony shall be punishable by no less than one year in a federal penitentiary.

(b) Any vote, order, or other official act by any member of the federal government, all state governments, all city governments, all county governments, and all other political entities to increase any income tax after ratification of this Amendment shall be a felony. Such felony shall be punishable by no less than five years in a federal penitentiary.

(c) Any vote, order, or other official act by any member of the federal government, all state governments, all city governments, all county governments, and all other political entities to levy any income tax after one year after the ratification of this Amendment shall be a felony. Such felony shall be punishable by no less than five years in a federal penitentiary.

Section 3: Wealth may be taxed as follows:

(a) Wealth shall be defined to include all cash, financial instruments, personal property, and real property anywhere in the world held directly by a natural person or indirectly such as through a trust for the benefit of a natural person.

(b) A natural person’s wealth shall be pro-rated according to the number of days the person resides in the United States each year.

(c) Each year, the Office of Management and Budget shall use reasonable means to estimate the median wealth of all natural persons residing in the United States at least part of the year.

(d) All wealth held by a natural person below than the greater of two hundred times the median wealth or US$50,000,000 shall be exempt from taxation federal government, all state governments, all city governments, all county governments, and all other political entities.

(e) All wealth held by a natural person above than the greater of two hundred times the median wealth or US$50,000,000 shall be taxable as determined by statute, rule, or regulation.

Whereby productivity and job creation are encourage, the general acquisition of wealth is encourage, and the wealthiest can increase the amount of their wealth exempt from taxation only by encouraging the general acquisition of wealth.

Thoughts?

[from occupied ga]

thoughts?

Moronic enough to qualify you as a candidate for 0bama's cabinet

[DuncanWaring]

Here’s a simpler version, paraphrasing the 21st:

“The sixteenth article of amendment to the Constitution of the United States is hereby repealed.”

[piytar]

Sheesh. Typos:

(d) All wealth held by a natural person below than the greater of two hundred times the median wealth or US$50,000,000 shall be exempt from taxation by the federal government, all state governments, all city governments, all county governments, and all other political entities.

(e) All wealth held by a natural person above than the greater of two hundred times the median wealth or US$50,000,000 shall be taxable as determined by statute, rule, or regulation.

By the way, I am enough of a realist to understand that the wealthy and powerful, esp the politically connected wealthy and powerful, would NEVER let this happen!

[piytar]

Really? Why? Quit taxing income. But the government does need revenue. Tax the mega-wealthy on their wealth. But encourage them to raise the median wealth of the nation so they get to keep more of their own.

Maybe the specifics aren't good above, but what's "moronic" about the overall concept?

[piytar]

I’m good with that, too. But the “mega-wealthy” keep tell us how they think more taxes are good, so let’s give them what they want, too!

[JimSEA]

A tax on a person’s net (or gross) worth is a socialist’s redistributive wet dream. Kind of like property taxes paid on the assessed value of the land regardless of loans owed. Of course, a high dollar tax exemption would never float.

[piytar]

I just don’t see how it’s more of a socialist’s wet dream than an income tax that destroys productivity and job creation while also protecting the politically connected mega-rich power brokers from most taxation.

This would hit John Kerry, Soros, et al, but leave the just “very wealthy” alone. Also, the mega-wealthy would be encourage to increase MEDIAN wealth so they could keep more of their own wealth.

The current system does not do any of that.

[ravenwolf]

Wealth or income should not be taxed at all, there are numerous other taxes that would keep the government running which is why it took so many years before an income tax was even considered.

[plain talk]

thoughts?

Your premise is wrong - rich people are not trying to keep others from becoming rich and have no incentive to do so. Here we are trying to wrest the Presidency from a marxist and we have one right here in our midst at Free Republic.

[piytar]

Wealth or income should not be taxed at all, there are numerous other taxes that would keep the government running which is why it took so many years before an income tax was even considered.

True enough.

Guess I'm just angry about the obscene income taxes, and I decided that if the mega-rich want to preach to us how our INCOME should be taxed because they feel guilty about being so WEALTHY, well, then let's take them at they're word and tax their mega-wealth. (They are lying, of course -- they want income taxed to keep their club exclusive.)

[ravenwolf]

Maybe the specifics aren’t good above, but what’s “moronic” about the overall concept?

---

That concept is even more socialist than what we already have.

[Jack Hammer]

Ah, communism by any other name....

would smell the same.

Sorry, I’m afraid Kark Marx beat you to it by a good many decades.

[AZLiberty]

Instead, reduce the size of government so that it doesn’t need so much tax revenue.

[oldbrowser]

Wealth includes many things that are very difficult to value. copyrights, patents, formulas, mineral rights, property rights, goodwill, R&D, unrealized capital gains, etc. All of these items would have to be correctly priced annually to do taxes. Who would do the subjective pricing?
The only way to objectively value intangibles would be when they are converted to cash, which is the reason for income tax.

[ravenwolf]

“The sixteenth article of amendment to the Constitution of the United States is hereby repealed.”

---

That makes more sense than anything else.

[piytar]

I am NOT a marxist. Read it carefully. This would leave the vast majority of people alone and encourage the truly rich — the Kerry’s, Soros’s, Buffets, you know, the mega-wealthy who control our politics and who keep preaching how we need to pay “more of our fair share” in the form of income taxes that won’t touch them — to pony up. It’s also structured to build the general wealth of the nation as measured by the median wealth.

I really don’t see how that is marxist, esp compared to the current system of income taxes.

[piytar]

“Instead, reduce the size of government so that it doesn’t need so much tax revenue.”

Yup.

[piytar]

Wealth includes many things that are very difficult to value. copyrights, patents, formulas, mineral rights, property rights, goodwill, R&D, unrealized capital gains, etc. All of these items would have to be correctly priced annually to do taxes.

And of course the politicians and their backers would use that to game the system. So we'd end up right back where we are at. Oh well.

[newheart]

Interesting thoughts. A few questions come to mind. How would wealth be calculated? Would the assessed value of a persons house be considered wealth or merely the current level of equity. In th latter case it would seem that the remainder of the wealth would be taxable for the seller or mortgage holder.

How would you account for fluctuations in assessed value in real property?

Similarly, If on December 31 your stock portfolio is worth $50 K, and the market crashes on January 2, you will be left with a tax debt on the previous wealth, not current wealth, and could be upside down simply relative to your tax bill..

Also, would you be repeatedly taxed on the same wealth?