Democratic Tax Plan

Here is what I think a Democratic tax plan should look like

I think the Democrats should put forward an alternative tax plan that makes the wealthy pay their fair share while encouraging working folk to keep and save more money. Here is what I propose for a Democratic tax plan:

Send all taxpayers a pre-filled out tax form

Too many poor and working folk are defrauded by tax preparation corporations. An easy way to increase tax refunds to the poor is to eliminate the tax preparation industry. The government knows how much you received in income for the most part, because the government receives from your employers and banks detailed statements on income earned and interest paid out. Rather then force a taxpayer to manually fill out a paper form or pay to have their taxes online, all a person would have to do is review the tax statement sent by the government, attest to it’s accuracy and provide a credit card or bank account for payment or refund either online or on paper. By using the online version, it would give people an additional $5 credit, covering the cost of postage and manual processing.

Create a new refundable $500 tax credit for individuals, $1,000 refundable tax credit for families

I think a β€œflat tax cut” makes a lot of sense, because it means that people who most it most will get more money in their pockets.Β A “flat tax cut” is fair because both the poor and rich get the same tax credit. George W. Bush implemented a similar tax cut, it proved to by mildly stimulative to the economy. It’s good policy to help people at the bottom who need the money the most get more, and for everyone else it’s fair, because everyone gets the same basic tax break regardless of how wealthy or poor they may be.

Make Taxes on Interest and Dividends More Progressive

Saving is such an important part of wealth building, that working families should pay no taxes on interest or capital gains made on bank accounts and investment. Taxes on investments should be eliminated for most working families, and should be reduced even for the wealthy. Instead of taxing wealth, we should move towards taxing carbon dioxide. Allow wealth to grow freely, especially for the poor and middle class, while addressing the carbon crisis our nation is facing.

Implement a Carbon Tax

Some liberals don’t like the idea of a carbon tax, because it means working families (and everybody else) will pay more for energy and daily necessities. This is valid point, but slowing the damage from climate change is a much larger concern then any one individual’s personal finances. I think a carbon tax should be phased in, and as it comes online, the carbon tax can be used to reduce taxes on industry to mute the effect of job loses as industry has to retool as we move to a carbon constrained future. A carbon tax will be costly on the economy, and will be costly on the rich and poor alike, but it’s too important to ignore.

Make the Estate Tax More Progressive

The current estate tax is $5.4 million tax free, then 40% for any money or property passed from one generation to the next. That threshold seems a little bit too high, I would suggest allowing families to pass on a million dollars of money or property tax free, then start at 10% for the next million, and increase it by 10% for every million over two. For too long, wealthy farmers and small business owners have been allowed to concentrate their wealth rather then spreading it out in economy. A much more progressive estate tax would provide billions in additional funding for the federal treasury, helping to close the deficit and freeing up billions to be used to strengthen the safety net and invest in our public infrastructure.

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