A basic question. What is the vision for America that will result should you be successful? To align strategically I need the vision/ goal. Once aligned strategically all sorts of tactical commitments can be made. To return to the old or restore the current in the same political swamp is a no go for me.
I have shared below a post I wrote about a vision that We The People could support. It is a work in progress but contains a framework for a new American experiment which has many dimensions of complexity, many of them soft humanity issues
I am an old fart so forgive me if I am somewhat questioning of the goals as outlined in the above post.
By any means, feel free to ask any questions. It means that you're really thinking about what I'm talking about. I'm going to give you the best short answer that I can come up with, but I will also give you a couple of links to thoughts I have shared that have different levels of detail.
Economics: I believe that capitalism has been completely corrupted into something distinct, which I usually call corporatism. Rather than what we have now, I think we need something much more akin to what was present directly after the New Deal for a couple of decades. Consistent investment on infrastructure, education, healthcare, etc. all fully funded by taxation that ensures those who have extracted the most out of the system (now millionaires and billionaires) contribute the most to fund everything. I also believe that there needs to be some kind of economic force that acts as a counterweight against wealth accumulation (which is why I've been working on ideas that relate to a wealth tax). I do not believe that there needs to be a cap on how wealthy someone can be, but I believe that their contribution to society needs to be directly proportional to the wealth they've accumulated.
Social: I believe that there are some common "values" that underlie most cultures, whether they are religions or not, whether they're western or eastern, etc. Things that boil down to the Golden Rule, an interest in fairness, rewarding effort, etc. I view cultures/religions as different paths to such values, and I believe they are all worth cultivating so long as they stay within certain limits (once they turn to fundamentalism, that is an issue that society needs to address, i.e., once it starts attacking fundamental human values or seeking to impose itself on others). I'm against anything that seeks to create an ethno-state.
Justice: I believe we need a justice system that is truly about rehabilitation rather than punishment. There are too many people in prison who were, from the time they were born, in many ways placed under circumstances that made them far more likely to go down the wrong path, and this is not something we account for enough. People need to have an opportunity to develop skills, reform themselves, and come back into society, while maintaining dignity in the process. What we have now is a net negative in every way possible. It costs a fortune and on average churns out worse people than the ones that go in.
I think this is a good start. To get a better idea of where I stand, you can read the namesake article of The American Manifesto:
If you really want to understand what I believe in, I have written a full societal framework that lays out precisely what my key values are and how they translate into governance. At the end of the manifesto article, there's a link to the intro for USOS (the framework I developed), which guides everything I write. Fair warning, it's a pretty long read. You can also go there from this link:
Thanks for mentioning "criminal justice" /prison system. The system is a mess with serious overcrowding and understaffing, terrible healthcare , often required to labor ofr next to nothing in overheated conditions ( increasingly so with the climate crisis) constant surveillance and and a lot of sexual assault by staff. Death penalty and solitary confinement need to go away. Incarcerated people need to be safe and to be able to vote. Until they are treated humanely (with oversight and regulations enforced) we will not have good governance.
And I didn't even go into private prisons. Creating an industry that has an incentive on maximizing incarceration and recidivism is like a societal cancer.
I just finished reading your post. I really like it. I think you will find USOS highly interesting and aligned with what We The People stand for if you check it out. It might even help as a guide for building the very thing you're aiming for.
Thank you for the support. I will get to the USOS as you suggested.
I have a different view on taxation. I think we all should pay. Having a situation where there is a wealth tax would have so few people actually supporting the government we will end up back to the argument of the freeloaders adding social services at our expense. Alternatively, We all should contribute financially to the operation of the state to their ability to pay. I have a paper written on this concept. Income is income no matter the source. All taxed at a standard rate. If you have retained earnings(wealth) at year end, and invest the money then capital gains and dividend income are taxed as income. Corporations are treated equally. Wealth is not the enemy, but tax laws that favor one type of income over another is the issue. I also feel certain line items should become recognizable lines on your tax. For example Defense - $900 billion your share $xx. Maybe people will say bullshit to increased defense spending if they can control their tax bill. Very complicated subject but worthy of a discussion.
I understand. I'd suggest the system I've designed is as fair and efficient as possible:
- Everyone, from the richest to the poorest person, has available to them the exact same exemption amount against their wealth. This does 2 things: it gives everyone an equal protection to some baseline so some portion of wealth is protected. This includes a basic home, savings and retirement. As a result, and it encourages some amount of savings, which leads to stability.
In short: same exemption for everyone.
- Past the exempted amount, everyone pays an exactly equal rate precisely proportional to their ownership of wealth. If you own 0.0000001% of the national wealth, you pay 0.0000001% of the total tax to be collected.
In short: same exact exact rate of tax for everyone.
As for the rate, it's benchmarked against the market. That means anyone who uses their wealth more productively than the market average sees their wealth grow, anyone who doesn't use their wealth productively sees it shrink proporionately. And you can always just invest it in the benchmark to safely keep it the same.
Nobody is suggesting that wealth is the enemy. Reducing any kind of wealth tax to it being an enemy of wealth is just a quick/easy strawman created by people who exploit capitalism. Whether you tax income or wealth you're taxing dollars. But so long as you're taxing income instead of wealth, you're guaranteeing that that richest will always, without exception, never pay proportionally the same as the poorest, such that a system based on income tax can never achieve actual fairness.
Finally, there's another benefit to the system I suggest that makes it superior to income tax. When you tax income, you inherently distort the market, since you take money from an individual before they have the opportunity to spend said money. For example, if you have an income of $100k and you get taxed $25k, you never had a choice of what happens to that $25k, the government does. In my system you always have the opportunity to choose what happens to 100% of your income. If you choose to spend all of it, that's OK, that's what feeds capitalism so you pay $0 tax on the $100k because when you spend money, you're in essence feeding back into the economy 100% of your earnings. It's not until you choose to extract from the economy an amount in excess of the same exact exemption available to everyone that you become liable for taxation.
The system doesn't care where your wealth/income comes from either. So no incentives/disadvantages between labor/capital gains/dividends/real estate/etc.
I short, the system is perfectly fair, down to the last penny taxed or exempted, proven by math, and completely source agnostic, so it's impossible for politicians to create carve outs or loopholes for anyone.
- Same exemption for everyone.
- Same tax rate for everyone.
- Beat the market, your wealth grows.
- Invest it in the benchmark, keep your wealth the same.
- Don't use your wealth productively, it shrinks.
- No market distortions.
- No loopholes or carve outs are possible.
- Absolute tax freedom: you can ultimately choose how much tax to pay down to $0. You could make $1 billion/year and pay $0 tax, you just have to spend all of it (or just never keep an amount in excess of the exemption amount).
I dare anyone to suggest a fairer system, based on income, wealth or anything.
I wholeheartedly agree that selling a wealth tax in America is an uphill battle. It’s true that much of the available literature is heavily against it — and that this literature is deeply rooted in Friedman economics, which became the academic backbone for dismantling New Deal principles.
For decades, we've absorbed ideas like:
- The sole responsibility of a corporation is to maximize shareholder profit.
- Trickle-down economics works.
- Taxes are inherently bad.
- Money equals free speech, and unlimited money in politics is good.
Given how entrenched these ideas have become, it’s understandable why someone would say, “They are counter to everything America pursues.” But that statement is only true if we accept that these conclusions can’t be challenged or changed — and personally, I refuse to accept that.
Likewise, “They are a poor tool for policy.” is an extremely broad claim that deserves more evidence and nuance.
Too often, people repeat these platitudes without pausing to ask whether they are actually true or simply comfortable stories we've internalized. In doing so, they risk reinforcing those beliefs to their own detriment — turning them into self-fulfilling prophecies.
As of last year, we had total personal assets of ~$192 trillion, with personal liabilities of $20.8 trillion, so ~$171 trillion net wealth.
What happens under deflationary periods?
Irrelevant, the system is designed to use a long-term benchmark (so yes, if we have a really long-term downturn, the benchmark will start to drop, which will lead the system to self-adjust as the benchmark starts changing).
Let's use your example in a scenario that covers multiple cases using real current numbers:
Using 2024 numbers, the math for my system works as follows:
Any wealth up to about $960k ($961,088 to be exact) is exempt from any taxation. The current benchmark I'm using is 8% (long term average return from S&P 500 according to a few sources). So, that means any wealth in excess of the exemption amount would be taxed by 8% per year. So, let's see how that works out your bagel shop in a few different cases:
Basic setup:
the bagel shop is blowing up, everybody loves it, and you're making $80K pure profit per year after all expenses including payroll, supplies, rental, equipment, etc., including a salary to yourself for your own work of $60k per year, which you spend on your own personal needs). Let's also say that you have 5 employees, whose total yearly salary comes to $200k
In the current income tax system, you'd be hit with approximately:
Corporate Tax on the 80K Profit: 21% = $16,800
Payroll Taxes for the business on the $260k total payroll (200k for employees and 60k to yourself, assuming a C-Corp to keep things simple:
$260K * 6.2% (Social Security) = $16,120
$260K * 1.45% (Medicare) = $3,770
Total = $19,890
Then from your employees you would have to additionally withhold to send to the federal government:
$200K * 6.2% (Social Security) = $12,400
$200K * 1.45% (Medicare) = $2,900
Total = $15,300
Then on your own salary:
$60K * 6.2% (Social Security) = $3,720
$60K * 1.45% (Medicare) = $870
Total = $4,590
Personal Income Tax
If you're single:
Personal Deduction = $14,600
10% on first $11.6k:
$11,600 × 10% = $1,160
12% on the next $33,800:
$33,800 × 12% = $4,056
Total Personal Income Tax: $5,216
Total Taxes:
$16,800 + $19,890 + $15,300 + $4,590 + $5,216 = $61,796 ($46,496 if you don't want to include the amount withheld from your employees' paychecks to focus just on your own taxes)
So, your business would generate a total amount of taxes of at least $61,796 plus whatever income taxes your employees would have to pay which would depend on their total income, which is out of your control.
---
Under my system:
Bagel Shop starts within exemption amount:
Your total assets, including the bagel shop is including it your total wealth is $800K:
Your total "income" is your salary plus your profit 80K + 60K, and given the scenario, you're spending your entire salary by 60K, such that your wealth is increasing by 80K/year. So:
After the first year, your wealth would become $880K, still under the exemption amount, so the math is simple, your annual taxes is $0 because it falls under the exemption amount:
After the second year, your total wealth would be $960K, just under the exemption, so $0 tax again.
After the 3rd year, you're finally over the exemption, your total wealth is $1,040,000.
We take that minus the exemption of 961,088 and your taxable wealth is $78,912. We apply the benchmark against it:
$78,912 * 8% = $6,312.96 → Your total tax for the year, now covering Social Security, Medicare, "income tax", etc.) So now we subtract that from the $1,040,000 and you now have $1,033,687.
For the following year, you increase your wealth by another 80k, so now you have at the end of the year $1,113,687, subtract the exemption ($961,088) and your taxable wealth is $152,599, apply the benchmark:
$152,599 * 0.08 = $12,208, so that's your tax for the year, take that from the $1,113,687 = $1,101,479
So, after running your bagel shop for 5 years under my system, despite "earning" $140K per year (so $700K) you've paid ~ 6,313 + 12,208 + 17,631 $36,152 in total taxes.
Compare that to the current income tax setup, in which case you're looking at ~$46,496/year = $232,480.
So, a small such entrepreneur in my system would pay ~15.55% of the total tax that they would have to pay compared the regular system.
And by the way, if you were to take a loan to start the bagel shop, because that would hit both sides of the ledger (assets and liabilities), then however much you borrowed would not impact your taxable amount, even if that were to put you above the exemption.
And here's the key thing to take away:
My Wealth Tax ended up way cheaper (more than 6x cheaper), than taxing income. Sure, there's an equilibrium point at which the wealth tax will be greater than the income tax, but at that point, you have a choice to make:
If my business can exceed the benchmark, then my wealth will continue to grow. If it can't, then I might be better off instead investing the additional wealth I'm generating on the market, either on the benchmark (like S&P 500) or something that I think can beat the market, in which case my wealth will continue to grow by the amount which I'm beating the market.
Also notice the simplicity of my system. You don't have corporate income tax + payroll tax + personal income tax, no myriads of different deductions, no brackets, etc. Just one single tax, in this case 8%, which is the same for everyone on wealth exceeding the exemption amount, whether it exceeds by $1 or $100 Billion. And by the way, the numbers I gave you are for meeting last year's federal budget of $6,752 trillion. That's right, under this scenario, we've reduced the federal deficit to $0
An inspiring initiative and well timed. Re the tax question. Wouldn't a national federal income tax revolt be necessary? Income taxes ( often withheld from monthly income) would cut into funds to be redirected through states to provide services cut from the federal budget. Playing devil's advocate : what about uneven development across states and people moving to where governance more effectively meets people's needs but doesn't necessarily have more funds. And what about the numerous parts of the federal budget that necessarily cross state lines -- aviation, food safety regulation. roads, weather tracking ( which will become increasingly important) climate crisis research and response, racial disparities in areas of pollution ( as in Musk's polluting of low income community adjoined to his site of operations?
I think that right now we're at the perfect time to introduce a new taxation system (since Federal Taxes are at an all-time low). If Blue states were to create a blue coalition, they could implement a taxation system like the one I'm developing to fund all of its programs. I have no doubt that with a decade the remainder of the country (at least the bottom 90%) would only vote for politicians looking to implement it once they see it at work.
"Playing devil's advocate : what about uneven development across states and people moving to where governance more effectively meets people's needs but doesn't necessarily have more funds. And what about the numerous parts of the federal budget that necessarily cross state lines -- aviation, food safety regulation. roads, weather tracking ( which will become increasingly important) climate crisis research and response, racial disparities in areas of pollution ( as in Musk's polluting of low income community adjoined to his site of operations?"
This is where Initiative 5 (Meritocracy Tax) and 6 (Blue State Coalition) go hand in hand. Similar to what we have now (States like California put more money into federal treasury than they receive while many red states take way more than they give), the meritocracy tax would enable taxes raised in wealthier blue states to help fund programs in lagging blue states. The biggest difference is that the meritocracy tax leaves no room for loopholes or carve outs, ensuring that it's impossible for a billionaire to pay a lower effective tax than a teacher or a nurse, etc.
Would you mind sharing a bit more about your town and your experience as a mayor? We always see a lot about large cities and what not, but there's very little opportunity to hear about smaller towns.
Thank you! We do have community events aimed at creating & fostering relationships between community members. We also have a Fun Friday during summer. We recently hosted a Cinco de Mayo that was very well received.
We have regular conversations with the school district & the fire district. We hope to have a youth council comprised of high school students, we are working on that now.
We also have community participation in advisory groups for various issues, the most recent being the restoration of the historic Merchant Block. Community input & buy in were very important in this project. Additionally we created an Urban Renewal District to help with reinvigorating our business district and support infrastructure projects.
Funding is always a challenge & now that we have this WH administration we expect many challenges moving forward but the community does not give up, it is one thing we definitely have. There’s a kind of grit & independence the community has, and that is what has sustained the community over time.
There are other policies we would like to implement but they are on the back burners for the moment while we focus on our most recent successes and building those for the future.
This is absolutely awesome! We will definitely need to stay connected as I try to push these initiatives (and more in the future). I have to imagine that there are many such small towns across the country that struggle to create opportunities for people to work together towards common projects, and I'm sure your knowledge and experience could go a long way to help them get started.
Is an initiative like this something that you could see yourself being involved in? Something like a "Small Town Mayer Association" where mayors can share some of the challenges they've experienced as well as solutions that they have been able to come up with and implement. There probably are a lot of state/federal resources that I have to imagine not every mayor knows all of them, or how to qualify, or how to apply for (even if you have staff in charge of such things), etc. Is this something that already exists out there?
I believe this is something I would like very much to be involved in.
All the mayors in our county meet monthly currently to discuss pressing issues in our cities, ask each other questions & find ways to help each other. It’s not a formal thing yet but our communities face similar issues with infrastructure, lack of funds and other issues. We share stories & resources but we are not all on the same political page interestingly. However we all do it because we love our communities & are invested.
I want to learn more, be better and stop feeling so angry about all that is happening. I need to refocus that into positive actions, but honestly have felt slightly lost. When I listen/read much of your work it makes me feel & think I can do more & be better for my community.
If you're serious about working on something like this, I'm happy to do my part to make it happen. If you can get a few other mayors interested, I can work on setting up a few basic things to help facilitate online meetings and what not.
Happy 4th! Let’s reclaim our country & democracy!! I will try to get my fellow county mayors interested in a mayor association & research what there might be in place for mayors currently to decide if it could also be an avenue. It’s imperative that others who become involved in this are truly concerned with justice, equality & democracy.
Certainly, happy to share a little. My town is pretty fabulous, we are surrounded by farms & vineyards. It’s a conservative town but good people. They do think about fairness but are subject to propaganda faux news because many of them haven’t experienced anything different or aren’t inclined to look beyond their own backyards.
Many can be fearful yet given time and opportunity most are accepting of new comers, opening up to different ideas once comfortable with said new comer.
Our county is however very conservative and there are many wealthy individuals that want to hang on to every crumb while begrudging others! Of course racism is everywhere but in our little town, I don’t feel it widespread. But, I thought the US as a whole wasn’t very racist only to find there’s more racist people than I truly realized.
My communities demographic is made up by about half white people and almost half Hispanic. Very limited population of any other ethnicity. Everyone looks out for each other. And everyone provides via dollars or via sharing or giving away lightly used items for school sports, for instance. We have a food bank and a clothes closet for the community. Oh and there’s 7 different churches in this town of 2700, but it speaks to the community in terms of the values shared.
Our school board is caulk full of community members and school sports is unifying community.
I strive to lead by my service and action, teaching to pass the baton and always looking for ways to encourage participation in the local government. No one can change anything bitching on FB from the couch of their home.
This unfortunately seems to be the norm around the country, but I blame our watered down educational systems, people having to work harder than ever just to make it, often leaving them with little energy or excitement for other things like civic participation. This of course is by design after years of relentless effort by some to gain and keep “control” of groups of people for the benefit of the some and not all people.
I hope I didn’t just blabber but actually provided you some substance. Please feel free to ask me questions.
Thank you so much for sharing about your town. By no means did it come across like blabber. It seems your town is in many ways like a microcosm of many of the challenges our country faces today. I especially feel the part about people not having much time/energy left for civic participation and the damage done by faux news propaganda.
I really like that you guys are able to run a food bank, and clothes closet for the community. I also think it's great that sports work as a unifier for the community.
Have you had success in getting the people in the town to go for any kind of community initiative? Like something that gives people an opportunity to get involved in small ways to improve something within the community that they see as a "collective asset" for everyone? It could be something really small, like planting trees in the town square (if you have one), or other areas of the town.
I think that sometimes even really small such activities can be a wonderful way for people to feel more connected and for them to commingle with one another in ways that they might otherwise not, especially when you're talking about different ethnicities. That's the kind of experience that can overcome what people see in faux news.
Like for the tree planting thing, you could make it about more than just planting trees. People could prepare different kinds of foods and bring it. People could play music, etc. I could see something like that become a yearly thing, and over time become a tradition that connects people. Imagine a generation down the road someone bringing their child to some of the trees they helped plant before taking them to plant their first one.
A basic question. What is the vision for America that will result should you be successful? To align strategically I need the vision/ goal. Once aligned strategically all sorts of tactical commitments can be made. To return to the old or restore the current in the same political swamp is a no go for me.
I have shared below a post I wrote about a vision that We The People could support. It is a work in progress but contains a framework for a new American experiment which has many dimensions of complexity, many of them soft humanity issues
I am an old fart so forgive me if I am somewhat questioning of the goals as outlined in the above post.
I look forward to being helpful.
https://open.substack.com/pub/oldguymusing/p/building-a-society-worth-the-risk?r=3q1xrd&utm_medium=ios
By any means, feel free to ask any questions. It means that you're really thinking about what I'm talking about. I'm going to give you the best short answer that I can come up with, but I will also give you a couple of links to thoughts I have shared that have different levels of detail.
Economics: I believe that capitalism has been completely corrupted into something distinct, which I usually call corporatism. Rather than what we have now, I think we need something much more akin to what was present directly after the New Deal for a couple of decades. Consistent investment on infrastructure, education, healthcare, etc. all fully funded by taxation that ensures those who have extracted the most out of the system (now millionaires and billionaires) contribute the most to fund everything. I also believe that there needs to be some kind of economic force that acts as a counterweight against wealth accumulation (which is why I've been working on ideas that relate to a wealth tax). I do not believe that there needs to be a cap on how wealthy someone can be, but I believe that their contribution to society needs to be directly proportional to the wealth they've accumulated.
Social: I believe that there are some common "values" that underlie most cultures, whether they are religions or not, whether they're western or eastern, etc. Things that boil down to the Golden Rule, an interest in fairness, rewarding effort, etc. I view cultures/religions as different paths to such values, and I believe they are all worth cultivating so long as they stay within certain limits (once they turn to fundamentalism, that is an issue that society needs to address, i.e., once it starts attacking fundamental human values or seeking to impose itself on others). I'm against anything that seeks to create an ethno-state.
Justice: I believe we need a justice system that is truly about rehabilitation rather than punishment. There are too many people in prison who were, from the time they were born, in many ways placed under circumstances that made them far more likely to go down the wrong path, and this is not something we account for enough. People need to have an opportunity to develop skills, reform themselves, and come back into society, while maintaining dignity in the process. What we have now is a net negative in every way possible. It costs a fortune and on average churns out worse people than the ones that go in.
I think this is a good start. To get a better idea of where I stand, you can read the namesake article of The American Manifesto:
https://americanmanifesto.news/p/the-american-manifesto
If you really want to understand what I believe in, I have written a full societal framework that lays out precisely what my key values are and how they translate into governance. At the end of the manifesto article, there's a link to the intro for USOS (the framework I developed), which guides everything I write. Fair warning, it's a pretty long read. You can also go there from this link:
https://americanmanifesto.news/p/the-unified-societal-operating-system
Thanks for mentioning "criminal justice" /prison system. The system is a mess with serious overcrowding and understaffing, terrible healthcare , often required to labor ofr next to nothing in overheated conditions ( increasingly so with the climate crisis) constant surveillance and and a lot of sexual assault by staff. Death penalty and solitary confinement need to go away. Incarcerated people need to be safe and to be able to vote. Until they are treated humanely (with oversight and regulations enforced) we will not have good governance.
100%
And I didn't even go into private prisons. Creating an industry that has an incentive on maximizing incarceration and recidivism is like a societal cancer.
I just finished reading your post. I really like it. I think you will find USOS highly interesting and aligned with what We The People stand for if you check it out. It might even help as a guide for building the very thing you're aiming for.
Thank you for the support. I will get to the USOS as you suggested.
I have a different view on taxation. I think we all should pay. Having a situation where there is a wealth tax would have so few people actually supporting the government we will end up back to the argument of the freeloaders adding social services at our expense. Alternatively, We all should contribute financially to the operation of the state to their ability to pay. I have a paper written on this concept. Income is income no matter the source. All taxed at a standard rate. If you have retained earnings(wealth) at year end, and invest the money then capital gains and dividend income are taxed as income. Corporations are treated equally. Wealth is not the enemy, but tax laws that favor one type of income over another is the issue. I also feel certain line items should become recognizable lines on your tax. For example Defense - $900 billion your share $xx. Maybe people will say bullshit to increased defense spending if they can control their tax bill. Very complicated subject but worthy of a discussion.
I understand. I'd suggest the system I've designed is as fair and efficient as possible:
- Everyone, from the richest to the poorest person, has available to them the exact same exemption amount against their wealth. This does 2 things: it gives everyone an equal protection to some baseline so some portion of wealth is protected. This includes a basic home, savings and retirement. As a result, and it encourages some amount of savings, which leads to stability.
In short: same exemption for everyone.
- Past the exempted amount, everyone pays an exactly equal rate precisely proportional to their ownership of wealth. If you own 0.0000001% of the national wealth, you pay 0.0000001% of the total tax to be collected.
In short: same exact exact rate of tax for everyone.
As for the rate, it's benchmarked against the market. That means anyone who uses their wealth more productively than the market average sees their wealth grow, anyone who doesn't use their wealth productively sees it shrink proporionately. And you can always just invest it in the benchmark to safely keep it the same.
Nobody is suggesting that wealth is the enemy. Reducing any kind of wealth tax to it being an enemy of wealth is just a quick/easy strawman created by people who exploit capitalism. Whether you tax income or wealth you're taxing dollars. But so long as you're taxing income instead of wealth, you're guaranteeing that that richest will always, without exception, never pay proportionally the same as the poorest, such that a system based on income tax can never achieve actual fairness.
Finally, there's another benefit to the system I suggest that makes it superior to income tax. When you tax income, you inherently distort the market, since you take money from an individual before they have the opportunity to spend said money. For example, if you have an income of $100k and you get taxed $25k, you never had a choice of what happens to that $25k, the government does. In my system you always have the opportunity to choose what happens to 100% of your income. If you choose to spend all of it, that's OK, that's what feeds capitalism so you pay $0 tax on the $100k because when you spend money, you're in essence feeding back into the economy 100% of your earnings. It's not until you choose to extract from the economy an amount in excess of the same exact exemption available to everyone that you become liable for taxation.
The system doesn't care where your wealth/income comes from either. So no incentives/disadvantages between labor/capital gains/dividends/real estate/etc.
I short, the system is perfectly fair, down to the last penny taxed or exempted, proven by math, and completely source agnostic, so it's impossible for politicians to create carve outs or loopholes for anyone.
- Same exemption for everyone.
- Same tax rate for everyone.
- Beat the market, your wealth grows.
- Invest it in the benchmark, keep your wealth the same.
- Don't use your wealth productively, it shrinks.
- No market distortions.
- No loopholes or carve outs are possible.
- Absolute tax freedom: you can ultimately choose how much tax to pay down to $0. You could make $1 billion/year and pay $0 tax, you just have to spend all of it (or just never keep an amount in excess of the exemption amount).
I dare anyone to suggest a fairer system, based on income, wealth or anything.
Not sold. Good luck developing and selling it.
Sure thing.
Care to explain what about it seems wrong/unfair? Is my math off anywhere?
The literature suggests that wealth taxation while theoretically attractive are in fact very hard to administer and prone to evasion
They are counter to everything that America pursues, right or wrong. So implementation will be near impossible
They are a poor tool for policy.
I am not trying to dissuade you nor analyze your math to find an error. I just do not think it will saleable in America.
Good luck.
I wholeheartedly agree that selling a wealth tax in America is an uphill battle. It’s true that much of the available literature is heavily against it — and that this literature is deeply rooted in Friedman economics, which became the academic backbone for dismantling New Deal principles.
For decades, we've absorbed ideas like:
- The sole responsibility of a corporation is to maximize shareholder profit.
- Trickle-down economics works.
- Taxes are inherently bad.
- Money equals free speech, and unlimited money in politics is good.
Given how entrenched these ideas have become, it’s understandable why someone would say, “They are counter to everything America pursues.” But that statement is only true if we accept that these conclusions can’t be challenged or changed — and personally, I refuse to accept that.
Likewise, “They are a poor tool for policy.” is an extremely broad claim that deserves more evidence and nuance.
Too often, people repeat these platitudes without pausing to ask whether they are actually true or simply comfortable stories we've internalized. In doing so, they risk reinforcing those beliefs to their own detriment — turning them into self-fulfilling prophecies.
I think that the creative minds of personal finance will find ways to best this , once the rules are defined.
If I have 100k$ in excess wealth and it is constant over the years does that get taxed every year?
The government needs a level of funding that is predictable. How do they forecast wealth.
What happens in a deflationary scenario?
If I invest 100k in a new business venture, bagel shop, taxed from the get go?
Not convinced it is the answer.
This design creates an incentive to spend rather than invest.
Now, to answer the other parts of your question:
The government already knows our total wealth:
https://www.federalreserve.gov/releases/z1/dataviz/z1/balance_sheet/chart/
As of last year, we had total personal assets of ~$192 trillion, with personal liabilities of $20.8 trillion, so ~$171 trillion net wealth.
What happens under deflationary periods?
Irrelevant, the system is designed to use a long-term benchmark (so yes, if we have a really long-term downturn, the benchmark will start to drop, which will lead the system to self-adjust as the benchmark starts changing).
Let's use your example in a scenario that covers multiple cases using real current numbers:
Using 2024 numbers, the math for my system works as follows:
Any wealth up to about $960k ($961,088 to be exact) is exempt from any taxation. The current benchmark I'm using is 8% (long term average return from S&P 500 according to a few sources). So, that means any wealth in excess of the exemption amount would be taxed by 8% per year. So, let's see how that works out your bagel shop in a few different cases:
Basic setup:
the bagel shop is blowing up, everybody loves it, and you're making $80K pure profit per year after all expenses including payroll, supplies, rental, equipment, etc., including a salary to yourself for your own work of $60k per year, which you spend on your own personal needs). Let's also say that you have 5 employees, whose total yearly salary comes to $200k
In the current income tax system, you'd be hit with approximately:
Corporate Tax on the 80K Profit: 21% = $16,800
Payroll Taxes for the business on the $260k total payroll (200k for employees and 60k to yourself, assuming a C-Corp to keep things simple:
$260K * 6.2% (Social Security) = $16,120
$260K * 1.45% (Medicare) = $3,770
Total = $19,890
Then from your employees you would have to additionally withhold to send to the federal government:
$200K * 6.2% (Social Security) = $12,400
$200K * 1.45% (Medicare) = $2,900
Total = $15,300
Then on your own salary:
$60K * 6.2% (Social Security) = $3,720
$60K * 1.45% (Medicare) = $870
Total = $4,590
Personal Income Tax
If you're single:
Personal Deduction = $14,600
10% on first $11.6k:
$11,600 × 10% = $1,160
12% on the next $33,800:
$33,800 × 12% = $4,056
Total Personal Income Tax: $5,216
Total Taxes:
$16,800 + $19,890 + $15,300 + $4,590 + $5,216 = $61,796 ($46,496 if you don't want to include the amount withheld from your employees' paychecks to focus just on your own taxes)
So, your business would generate a total amount of taxes of at least $61,796 plus whatever income taxes your employees would have to pay which would depend on their total income, which is out of your control.
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Under my system:
Bagel Shop starts within exemption amount:
Your total assets, including the bagel shop is including it your total wealth is $800K:
Your total "income" is your salary plus your profit 80K + 60K, and given the scenario, you're spending your entire salary by 60K, such that your wealth is increasing by 80K/year. So:
After the first year, your wealth would become $880K, still under the exemption amount, so the math is simple, your annual taxes is $0 because it falls under the exemption amount:
After the second year, your total wealth would be $960K, just under the exemption, so $0 tax again.
After the 3rd year, you're finally over the exemption, your total wealth is $1,040,000.
We take that minus the exemption of 961,088 and your taxable wealth is $78,912. We apply the benchmark against it:
$78,912 * 8% = $6,312.96 → Your total tax for the year, now covering Social Security, Medicare, "income tax", etc.) So now we subtract that from the $1,040,000 and you now have $1,033,687.
For the following year, you increase your wealth by another 80k, so now you have at the end of the year $1,113,687, subtract the exemption ($961,088) and your taxable wealth is $152,599, apply the benchmark:
$152,599 * 0.08 = $12,208, so that's your tax for the year, take that from the $1,113,687 = $1,101,479
Let's do a 5th year just for fun:
$1,101,479 + 80K = $1,181,479 - $961,088 = $220,391 * 0.08 = $17,631 → Tax
So, after running your bagel shop for 5 years under my system, despite "earning" $140K per year (so $700K) you've paid ~ 6,313 + 12,208 + 17,631 $36,152 in total taxes.
Compare that to the current income tax setup, in which case you're looking at ~$46,496/year = $232,480.
So, a small such entrepreneur in my system would pay ~15.55% of the total tax that they would have to pay compared the regular system.
And by the way, if you were to take a loan to start the bagel shop, because that would hit both sides of the ledger (assets and liabilities), then however much you borrowed would not impact your taxable amount, even if that were to put you above the exemption.
And here's the key thing to take away:
My Wealth Tax ended up way cheaper (more than 6x cheaper), than taxing income. Sure, there's an equilibrium point at which the wealth tax will be greater than the income tax, but at that point, you have a choice to make:
If my business can exceed the benchmark, then my wealth will continue to grow. If it can't, then I might be better off instead investing the additional wealth I'm generating on the market, either on the benchmark (like S&P 500) or something that I think can beat the market, in which case my wealth will continue to grow by the amount which I'm beating the market.
Also notice the simplicity of my system. You don't have corporate income tax + payroll tax + personal income tax, no myriads of different deductions, no brackets, etc. Just one single tax, in this case 8%, which is the same for everyone on wealth exceeding the exemption amount, whether it exceeds by $1 or $100 Billion. And by the way, the numbers I gave you are for meeting last year's federal budget of $6,752 trillion. That's right, under this scenario, we've reduced the federal deficit to $0
An inspiring initiative and well timed. Re the tax question. Wouldn't a national federal income tax revolt be necessary? Income taxes ( often withheld from monthly income) would cut into funds to be redirected through states to provide services cut from the federal budget. Playing devil's advocate : what about uneven development across states and people moving to where governance more effectively meets people's needs but doesn't necessarily have more funds. And what about the numerous parts of the federal budget that necessarily cross state lines -- aviation, food safety regulation. roads, weather tracking ( which will become increasingly important) climate crisis research and response, racial disparities in areas of pollution ( as in Musk's polluting of low income community adjoined to his site of operations?
I think that right now we're at the perfect time to introduce a new taxation system (since Federal Taxes are at an all-time low). If Blue states were to create a blue coalition, they could implement a taxation system like the one I'm developing to fund all of its programs. I have no doubt that with a decade the remainder of the country (at least the bottom 90%) would only vote for politicians looking to implement it once they see it at work.
"Playing devil's advocate : what about uneven development across states and people moving to where governance more effectively meets people's needs but doesn't necessarily have more funds. And what about the numerous parts of the federal budget that necessarily cross state lines -- aviation, food safety regulation. roads, weather tracking ( which will become increasingly important) climate crisis research and response, racial disparities in areas of pollution ( as in Musk's polluting of low income community adjoined to his site of operations?"
This is where Initiative 5 (Meritocracy Tax) and 6 (Blue State Coalition) go hand in hand. Similar to what we have now (States like California put more money into federal treasury than they receive while many red states take way more than they give), the meritocracy tax would enable taxes raised in wealthier blue states to help fund programs in lagging blue states. The biggest difference is that the meritocracy tax leaves no room for loopholes or carve outs, ensuring that it's impossible for a billionaire to pay a lower effective tax than a teacher or a nurse, etc.
I’m a mayor in a small rural town, (2,700 population) I can’t decide if I want to run again. My term ends 2026.
Ugh I am tired… but know I cant stop fighting
Would you mind sharing a bit more about your town and your experience as a mayor? We always see a lot about large cities and what not, but there's very little opportunity to hear about smaller towns.
Thank you! We do have community events aimed at creating & fostering relationships between community members. We also have a Fun Friday during summer. We recently hosted a Cinco de Mayo that was very well received.
We have regular conversations with the school district & the fire district. We hope to have a youth council comprised of high school students, we are working on that now.
We also have community participation in advisory groups for various issues, the most recent being the restoration of the historic Merchant Block. Community input & buy in were very important in this project. Additionally we created an Urban Renewal District to help with reinvigorating our business district and support infrastructure projects.
Funding is always a challenge & now that we have this WH administration we expect many challenges moving forward but the community does not give up, it is one thing we definitely have. There’s a kind of grit & independence the community has, and that is what has sustained the community over time.
There are other policies we would like to implement but they are on the back burners for the moment while we focus on our most recent successes and building those for the future.
This is absolutely awesome! We will definitely need to stay connected as I try to push these initiatives (and more in the future). I have to imagine that there are many such small towns across the country that struggle to create opportunities for people to work together towards common projects, and I'm sure your knowledge and experience could go a long way to help them get started.
Is an initiative like this something that you could see yourself being involved in? Something like a "Small Town Mayer Association" where mayors can share some of the challenges they've experienced as well as solutions that they have been able to come up with and implement. There probably are a lot of state/federal resources that I have to imagine not every mayor knows all of them, or how to qualify, or how to apply for (even if you have staff in charge of such things), etc. Is this something that already exists out there?
I believe this is something I would like very much to be involved in.
All the mayors in our county meet monthly currently to discuss pressing issues in our cities, ask each other questions & find ways to help each other. It’s not a formal thing yet but our communities face similar issues with infrastructure, lack of funds and other issues. We share stories & resources but we are not all on the same political page interestingly. However we all do it because we love our communities & are invested.
I want to learn more, be better and stop feeling so angry about all that is happening. I need to refocus that into positive actions, but honestly have felt slightly lost. When I listen/read much of your work it makes me feel & think I can do more & be better for my community.
Happy 4th!
If you're serious about working on something like this, I'm happy to do my part to make it happen. If you can get a few other mayors interested, I can work on setting up a few basic things to help facilitate online meetings and what not.
Happy 4th! Let’s reclaim our country & democracy!! I will try to get my fellow county mayors interested in a mayor association & research what there might be in place for mayors currently to decide if it could also be an avenue. It’s imperative that others who become involved in this are truly concerned with justice, equality & democracy.
Certainly, happy to share a little. My town is pretty fabulous, we are surrounded by farms & vineyards. It’s a conservative town but good people. They do think about fairness but are subject to propaganda faux news because many of them haven’t experienced anything different or aren’t inclined to look beyond their own backyards.
Many can be fearful yet given time and opportunity most are accepting of new comers, opening up to different ideas once comfortable with said new comer.
Our county is however very conservative and there are many wealthy individuals that want to hang on to every crumb while begrudging others! Of course racism is everywhere but in our little town, I don’t feel it widespread. But, I thought the US as a whole wasn’t very racist only to find there’s more racist people than I truly realized.
My communities demographic is made up by about half white people and almost half Hispanic. Very limited population of any other ethnicity. Everyone looks out for each other. And everyone provides via dollars or via sharing or giving away lightly used items for school sports, for instance. We have a food bank and a clothes closet for the community. Oh and there’s 7 different churches in this town of 2700, but it speaks to the community in terms of the values shared.
Our school board is caulk full of community members and school sports is unifying community.
I strive to lead by my service and action, teaching to pass the baton and always looking for ways to encourage participation in the local government. No one can change anything bitching on FB from the couch of their home.
This unfortunately seems to be the norm around the country, but I blame our watered down educational systems, people having to work harder than ever just to make it, often leaving them with little energy or excitement for other things like civic participation. This of course is by design after years of relentless effort by some to gain and keep “control” of groups of people for the benefit of the some and not all people.
I hope I didn’t just blabber but actually provided you some substance. Please feel free to ask me questions.
Thank you so much for sharing about your town. By no means did it come across like blabber. It seems your town is in many ways like a microcosm of many of the challenges our country faces today. I especially feel the part about people not having much time/energy left for civic participation and the damage done by faux news propaganda.
I really like that you guys are able to run a food bank, and clothes closet for the community. I also think it's great that sports work as a unifier for the community.
Have you had success in getting the people in the town to go for any kind of community initiative? Like something that gives people an opportunity to get involved in small ways to improve something within the community that they see as a "collective asset" for everyone? It could be something really small, like planting trees in the town square (if you have one), or other areas of the town.
I think that sometimes even really small such activities can be a wonderful way for people to feel more connected and for them to commingle with one another in ways that they might otherwise not, especially when you're talking about different ethnicities. That's the kind of experience that can overcome what people see in faux news.
Like for the tree planting thing, you could make it about more than just planting trees. People could prepare different kinds of foods and bring it. People could play music, etc. I could see something like that become a yearly thing, and over time become a tradition that connects people. Imagine a generation down the road someone bringing their child to some of the trees they helped plant before taking them to plant their first one.