Copyright John T. Reed 2014
I have refined my head tax idea in two ways: One is to restore my age-based gradations. The other is to add a per-acre-owned real estate tax for national defense.
The basic annual head tax would be $10,000 per over-21 U.S. resident or expat citizen. Since there are around 200 million adults, that would generate $10,000 x 200,000,000 = $2 T per year in revenue.
In addition, all real estate owners would pay $200 per acre of land for national defense. Buildings on the land would not be taken into account. The theory being that the military defends both people and territory. There are 1.63 billion acres not owned by the federal government. $200 x 1,630,000,000 = $326 billion. Add the head tax and the per-acre tax and you get total revenues of $2.326 T. Current tax revenues are $2.9 T and that is almost certainly too much for a free country that is not trying to imitate European social democracy. Close enough for government work.
States would have to pay the $200 per acre on all state-owned land in their state because the feds have to defend it. That might take a constitutional amendment because of the Supreme Court decision that won’t let the feds tax interest on municipal bonds. Whatever, all entities that are exempt from property taxes now—churches and state and local government—would have to pay the feds under my plan because the military is defending them. That would encourage them to not own more land than they needed. Now, there is nothing to encourage them to get rid of excess land.
As far as the $10,000 a year head tax is concerned, I get push back from twenty-somethings. So I have looked up how much people make each year of their lives.
So the base rate would be $10,000 a year, but to accommodate earnings differences at different ages, people would pay annually as follows:
22-24 43% of base or $4,300
25-34 92% or $9,200
35-44 122% or $12,200
45-54 124% or 12,400
55-64 119% or $11,900
65 and older 68% or $6,800
I would have the public vote in an annual binding referendum on three choices: 1. Keep the base amount the same or 2. raise it 5% or 3. lower it 5%. This would apply to both the head tax and the $200 per acre defense tax. I expect the public would initially lower it 5% each year until they started getting nervous about the weakened defense and deterioration of services they use like federal highways, federal courts.
I would also seek a Constitutional amendment banning all new federal borrowing. That would mean no deficit spending or increase in the national debt. So with every vote to cut taxes, the voters would be voting to cut their own highways, courts, defense. Persons who have paid all the taxes they owe would not be allowed to vote in referendums regarding taxation or spending until they did. No representation without taxation. They could, however, vote in other referendums like those involving civil and criminal law, the draft, declaration of war, and so on.
The original Constitution said all taxes other than customs duties were to be apportioned according to the census. That is, a head count. A tax based on a head count is a head tax. They had to pass the XVI Amendment to base the tax on income rather than head count. In other words, I am not the first to come up with this. The Founding Fathers were.
This would treat everyone equally over their lives if not each year. I see federal taxes as a sort of user fee for defense, international travel and diplomacy services, federal investigators, prosecutors and courts, and for dealing with things that cross state or international borders like air, water germs, migratory birds and other animals. I would not be opposed to raising the actual fees for some of those things to lower the taxes.
No entities like corporations would pay any tax at all. Their shareholders and employees would all pay their head tax. Taxing an abstract legal concept like a corporation is childish. Since corporations do not exist as tangible or living things that can be taxed, punished, or confiscated, doing things to them like taxation is nothing but a hidden sales tax on the corporations sales. Taxes should not be hidden nor should the public be encouraged to think that they can get government services paid by for someone else. Directly or indirectly, we all pay the taxes levied whether on us directly or indirectly by taxing corporations that sell us goods or services.
• no one would be voting on how much other people would pay in taxes, only what they themselves would pay
• no one would be voting for more spending that they were willing to themselves pay for because of ending deficit spending
• no tax return would be required
• no audits would occur
• your only responsibility would be to prove your birth date to the IRS and make your annual payment on your birthday
• all tax preparers and tax lawyers would soon need another line of work
• delinquents would have a federal tax lien filed against them by social security number and those would all be listed in a single federal on-line database
• receivables from delinquents would be sold to private collection companies
• delinquents would not be allowed to vote in referendums related to tax amount or how to spend tax revenues
• courts would treat those delinquent on taxes as dead beat dads are treated, i.e., their assets and income would be confiscated
according to formulas that reflect their need to support themselves and have some incentive to continue working, they would be banned from holding office, voting on fiscal matters, receiving any federal benefits
• persons who were chronically unable or unwilling to pay their head taxes would seek charity to pay them or emigrate
• persons around the world who are willing and able to pay their head tax, would seek to immigrate to the U.S. which would be the most attractive place, tax-wise, to reside and/or work in the world
• the tax revenue would be more stable than ever in U.S. history flowing in equally every day of the year and being little affected by recessions or booms
• every adult would be a taxpayer or a fugitive; no more half the country not paying taxes.
• the insanity of treating social security numbers as if they were secret passwords would necessarily end
John T. Reed