The "every-penny" method of taxation.

[SoCalDem]

There would be no need for company pensions ..surely no need for risky "investments" like 401-ks.

Under My E.P.Tax Plan:

every penny you make, earn, have given to you, or get from dividends, is taxed at whatever "level" you are at ..for instance, let's say you "make" $10 an hour

a full-time work schedule with NO vacation is 2080 hours a year, so your gross would be $20,800.00 a year (sucks, but this is for the math only)

10 percent is "set aside" (starting at age 18 or younger), in an FDIC institution of YOUR choice in a long-term "vehicle" that can be added to, but NO withdrawals until age 60 or later.. This individual account is YOURS..no matter when you start working. If you become medically disabled and can no longer earn a living, you can withdraw a monthly stipend from it to go along with disability payments.

5% is set aside as your "tax" to the federal government
3% is set aside as your tax to your state
5% is set aside as your universal health care premium

The ONLY deduction for tax filing purposes would be for interest on your ONE home that you live in, or for 50% of rent for lower income people.

MOST people get a paycheck and have ALL their income fully documented, so it would be a no-brainer to figure this all out.

Banks would be flush with money every week coming in, and would have plenty to loan out, since these are long-term accounts....no need to "gamble"..

This also restores the "market" to what it should be. People who truly want to "invest", and who have plenty of money to play around with, can still visit the Wall Street Casino, but the rest of us would have a way to save...safely..

This frees up people from being tied to a company or job they hate, and it frees up companies from having to try to pay for insurance & benefits. They can pay a wage for a task they need done, and the employee can "vote with his./her feet" if they are unwilling to sell their labor for that price. It means that bosses no longer need to know every little personal detail about your health or private life, because they are hiring you to do a task, not "adopting" you and your family.

For a person making $20,800 a year it would mean that their check would be "missing" about $100 a week, BUT they would have health care, and they would be building a nest egg that no one could steal from them.

an 18 yr old with no unemployment episodes, will work 504 months (until age 60)...even at 2% interest, and assuming that the wage stays at that low rate for their whole life, they would have over $137K..

Of course , as one's income rises, the percentages would have to increase, and a "minimum income" should be in place for everyone.

Employees and employers would still be on the hook for social security until a better plan arrives on the scene or until the glut of oldsters dies off..

There could still be a feature that allows for EITC, and for personal exemptions, but the formula here replaces the need for gambling on wall street and having millions of people wiped out every 15-20 years, and having to start all over once the crooks have stolen all the money,.,.

[NowHearThis]

1. Interesting idea, but wouldn't it be better to have only one kind...

of tax: a wealth tax? Do away with our system of regressive income taxes and fees. Just tax wealth.

[w4rma]

2. You mean a property tax? No. A graduated income tax is more progressive. (nt)

[SoCalDem]

3. Taxing wealth is a part of this plan, since they pay a higher percentage as the income rises

but just taxing wealth does not build a private account for lower plaid /working poor people..

Personally, I would like to see everything over $5million go back to Eisenhower rates of taxation.. and I mean EVERYTHING..dividends, interest, capital gains.. ALL OF IT

[Riceburningluva]

6. I think for this to work we would need to tax the rich people

on their wealth first. Think about all the money the goverment could get if they taxed all teh millionairs at 75%. Maybe some of them would have to sell a few houses or cars to pay the tax, but thats just part of life, they got to enjoy the spoils untill now, and now they can pay the piper for their greed and high fallooting lifestyle.

[GKirk]

4. Your headline scared me...

...I thought you were going to ask:
How much do you make?
Send 'every penny' in.

[dysfunctional press]

5. "an 18 yr old with no unemployment episodes, will work 504 months (until age 60)"

how often would you expect that to happen in this day and age?

what happens to the disabled? or people who become disabled after working only a short time?