A few tax codes based on earnings and profits: A proposal

Universal Tax Code

Increase in tax as a part of GDP earnings, over a period of time can be a good factor for the fiscal year, given the debt to GDP ratio of any country. An optimal tax can be a very good factor for offshore agreement for corporations, which does not need to pay high taxes for dual tax treaty, but balanced. Here is some food for thought for the US federal structure based on a few notes.

  1. A territorial tax system can no longer be taxed based on foreign earnings, which will earn peanuts based on their currency value. It relaxes the corporations, who save a lot of assets back home based on their savings. Maybe, the amount saved can be replenished to the Federal structure, based on their savings. Let us say, that if, USD 10,000 is saved by offshore treaties, a tax on savings of about 5% or USD 500 can fill in the coiffures of the US Federal government.
  2. An one-time tax of 10-15% can be levied on the corporations based on their savings post 1991, on the accumulated foreign earnings on the foreign soil, post the globalization era post the Gulf War, starting from 1991 to 2008. Net income that exceeds 15-40% of the profit on the foreign soil can also have back taxes, with slabs defined from 15% and above.
  3. Net income of individuals that exceeds 20-35% median of the national, state and tax based income can have different tax structures with a high tax rate based on the clauses of related tax breaks, such as paid healthcare, lower rates on certain individuals, deferred income of controlled corps, defined contribution for retirement plans, income tax credits, benefit retirements, local tax deductions, health insurance, and credits for children above 16 years of age can have tax breaks or concession based on tax rates. A different tax rate based on 35% of income above the median can have high tax rates, rather than just base on state and location based taxes.
  4. Levying trade protectionism against China, whose earnings are 3% of the GDP based on Sino-US trade, can be a good decision at the spur of the moment, by insisting duties as 20% on Steel and 15% on aluminium. But, the USA needs to pick up the lower tax levy, which is allowing affordable homes under the federal structure. Taxes would just introduce a tax barrier, which China would afford to lose. Such a tariff trade would actually bring down the fears of global protectionism, and cause concerns for US for Trans Atlantic Treaty.
  5. Individual tax breaks can be a single factor for slabs for personal taxes. 10 percent tax for certain areas can be a good factor for enhancement. The table would suggest this.
Tax Slabs based on annual income Tax rates Region
0-10k USD 10% A, B
0-10k USD 0% C, D
10k-30k USD 12.5% A, B
10k-30k USD 10% C
30k-80k USD 17.5% A, B, C
80k-150k USD 20% A, B, C
150k-500k USD 23% A, B, C
Above 500k USD 28% A, B, C

Region wise split-up can be given as:

  • A- NY, Boston, Chicago with higher per capital income
  • B- Dallas, Atlanta with median savings
  • C- Alabama and Kentucky
  • D- Non-taxable zone based on per capita income
  1. Corporate institutions can actually have a tax break based on their profits, rather than revenues alone only. Tax slabs can be like this.
Tax Slabs for the corporates based on annual profits Additional tax rates based on profits
0-2 billion USD 2-3%
2-5 billion USD 3-4.5%
5- 8 billion USD 4.5-6%
8-15 billion USD 6-7.5%
15-25 billion USD 7.5-9%
25-40 billion USD 9-12%
40- 70 billion USD 12-15%
Above 70 billion USD 15-18%
  1. Instead of pegging at a rate based on geography, an index based on per capita index for a state and locality in a city can have a better indicator of tax rates. Progressive tax based on wealth and income can be a progressive tax rate based on wealth and assets, however nominal it can be. Inheritance tax for inheritance of individuals can also be taxed at different rates. Tax slabs can be like this.

 

Tax Slabs based on inheritance and assets Tax rates
Upto 20 million USD 1-2 %
20- 50 million USD 2.5-4 %
50-200 million USD 5-6 %
200-500 million USD 7.5-9%
500 milion- 1 billion USD 9-10%
1 billion-2 billion USD 10-12%
2 billion- 5 billion USD 12-15%
5 billion and above in USD 15-20%
  1. Instead of CSR and corporate responsibility, a part of the spending can go to the Federal Government for economic allowances under 401(k), or for the Medicare insurance and subsidized and public education, growing towards the economic structure. Trade protectionism can actually divert the world, and cause a hamper on Trans Atlantic deals based on EU and Trans Pacific deals based on ANZ.
  2. Pooled insurance benefits to immigrants can be a better deal to the federal structure, rather than terming it to a budgetary headache based on levied taxes. Introduction to the rail networks from the East to West Coast will be an even task to connect which will boost the singular economy. The US Fed can take a call, whether or not gasoline versus electrical engines can be beneficial for the Feds. This will recall workers for construction and draw attention to workers based on structural changes.
  3. Operating budget for the social security disbursal can be based on location, state and per capita index, rather than any homogeneous and universal basic income. A round off from 700-1,500 USD per month would be a better deal based on indexes and state localities, rather than a homogeneous pay-off of 1,800 USD per month for the universal coverage, which can be earned by the Feds post the tax breaks.

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