Thursday, January 31, 2013

Top-Down Taxation,
or Tax-Grazing

Sales-, income- and withholding-taxes are regressive, weighing least heavily on the wealthiest, where any fair system of taxation should weigh heaviest.

Wealth only should be taxed, and only of individuals (except where profits flow abroad, where heavily-progressive taxation of profits should be levied).

How should wealth be taxed, in such a way to be fairest to most of the wealthy as well?

It should be confiscated granularly, from the top down, in top-down taxation called here "tax-grazing":

Take, for example, a country with one hundred citizens, possessing from poorest to wealthiest from one thousand to one hundred thousand dollars in wealth, each possessing one thousand dollars more than the next-less and less than the next-more wealthy.

The total wealth of this country will be $5,050,000.

Let us then examine the effect of tax-grazing 1% of the total wealth of those citizens and that country percentile-wise, percent by percent.

1% of the total wealth of those citizens and that country would be $50,500.

There is only one citizen with wealth in the highest percentile, and the total wealth held in that percentile is one thousand dollars, so the first thousand dollars of tax-grazing comes from that percentile and citizen, reducing his or her wealth to $99,000.

There now are two citizens with wealth in the second-highest percentile, and the total wealth held in that percentile is two thousand dollars, so the next two thousand dollars of tax-grazing comes from that percentile and those citizens, reducing their wealths to $98,000 apiece, and giving us three thousand dollars total from tax-grazing.

There now are three citizens with wealth in the third-highest percentile, and the total wealth held in that percentile is three thousand dollars, so the next three thousand dollars of tax-grazing comes from that percentile and those citizens, reducing their wealths to $97,000 apiece, and giving us six thousand dollars total from tax-grazing.

There now are four citizens with wealth in the fourth-highest percentile, and the total wealth held in that percentile is four thousand dollars, so the next four thousand dollars of tax-grazing comes from that percentile and those citizens, reducing their wealths to $96,000 apiece, and giving us ten thousand dollars total from tax-grazing.

There now are five citizens with wealth in the fifth-highest percentile, and the total wealth held in that percentile is five thousand dollars, so the next five thousand dollars of tax-grazing comes from that percentile and those citizens, reducing their wealths to $95,000 apiece, and giving us fifteen thousand dollars total from tax-grazing.

There now are six citizens with wealth in the sixth-highest percentile, and the total wealth held in that percentile is six thousand dollars, so the next six thousand dollars of tax-grazing comes from that percentile and those citizens, reducing their wealths to $94,000 apiece, and giving us twenty-one thousand dollars total from tax-grazing.

There now are seven citizens with wealth in the seventh-highest percentile, and the total wealth held in that percentile is seven thousand dollars, so the next seven thousand dollars of tax-grazing comes from that percentile and those citizens, reducing their wealths to $93,000 apiece, and giving us twenty-eight thousand dollars total from tax-grazing.

There now are eight citizens with wealth in the eighth-highest percentile, and the total wealth held in that percentile is eight thousand dollars, so the next eight thousand dollars of tax-grazing comes from that percentile and those citizens, reducing their wealths to $92,000 apiece, and giving us thirty-six thousand dollars total from tax-grazing.

There now are nine citizens with wealth in the ninth-highest percentile, and the total wealth held in that percentile is nine thousand dollars, so the next nine thousand dollars of tax-grazing comes from that percentile and those citizens, reducing their wealths to $91,000 apiece, and giving us forty-five thousand dollars total from tax-grazing.

And there now are ten citizens with wealth in the tenth-highest percentile, and the total wealth held in that percentile is ten thousand dollars, so the final five thousand five hundred dollars of tax-grazing needed comes from that percentile and those citizens equally, reducing their wealths to $90,450 apiece.

The worst-hit of all the wealthiest citizens has been tax-grazed less than ten percent of his or her wealth, and is still in the highest percentile of wealth in the country.

And eighty-nine citizens have not been taxed AT ALL, their "consumer" confidences and buying-powers, and therefore national business/corporate sales, profits, dividends and capital gains, unscathed, in populist "trickle-up economics" with its plenty in place of aristocracy-plutocracy's "trickle-down economics" and its "austerity".

Naturally there will be as many and as various attempts to evade such taxation as at present, for example in the classic sale-and-sweetheart-lifetime-lease arrangement for real property, but no tax-system can be effective where such fraud is not investigated, prosecuted and punished, with both prison-time and confiscation of the wealth involved.

And there should of course be truth in ownership, such that any wealth the ownership of which has been concealed or falsified, or the ownership trail of which leads to a country which allows the concealment or falsification of ownership, shall be confiscated by the country (State/Province perhaps in Federal countries) where it is located.


Keywords: antiplutocracy, aristocracy, austerity, economics, plenty, plutocracy, populism, tax-grazing, top-down taxation, trickle-down economics, trickle-up economics

2 Comments:

Anonymous Anonymous said...

Very interesting and rational idea thanks.

May 5, 2015 at 7:00 PM  
Blogger John Kennard said...

Obviously, the real quantiles should be smaller, and might even be progressive.

And I believe that wealth and concentration of wealth should be limited much more strictly than what this imposes.

But it would be a start, as a transition away from plutocracy.

May 5, 2015 at 7:09 PM  

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