Dear Ms Warren,

You have lately been calling attention to the possibility of revising our tax structure so that it favors the less well off over the rich. Brava! Since 2014 I have been writing about that in my blog and in my newspaper column. A revision is overdue. We haven’t taken a second look since the original passage of the Sixteenth Amendment (1909, 14 years before I was born). That’s 110 years ago, a long time for any piece of regulatory legislation to remain unchanged as the world around it evolves. Especially when that world develops highly visible economic inequities.

So your message is welcome. But in my opinion it doesn’t go far enough. You talk in terms of modifications where it seems to me a basic re-thinking is required. History teaches us that tweaks and patches are invitations to special interests to expand their already mind-boggling roster of escape hatches for the well-connected and well-heeled. It seems to me that we need something drastic.

In my search for ideas I came upon the name of Henry George, an American journalist and economist who was influential at the turn of the century (not this century; the one before it). Mr George was known for his advocacy of the Single Tax (also known as the Land Tax). His proposal was simple and direct : God gave us this planet to take care of. He didn’t give it to self-appointed monarchs and feudal barons, bankers, thieves, or real estate speculators. In Mr George’s time we hadn’t yet developed such corner-cutting players as payday lenders, credit-card companies, or stock-brokers. God’s gift was intended for everyone, rich and poor alike. (And to be sure, honest and crooked as well.) That led to the ancient concept of the Commons — the wealth of the world as joint wealth — belonging to anyone who could make use of it. Hunting ranges, grazing lands, ore deposits, the fish of the sea. Not to be monopolized by hoarders, speculators, and people claiming either the Divine Right of Kings or simply fancy weapons and chutzpah. The notion of private property was thus a betrayal of His intention. Since in Mr George’s agricultural society land was nearly the sole basis for wealth, to set things right he said we would need to eliminate the private ownership of land altogether and accept instead our duty as stewards. This, he thought, could be best accomplished by a single, easily calculable tax on land. Land should constitute every citizens’ birthright. Each citizen’s tax bill should simply reflect the amount of the Commons he was making use of. Details about regulating the methods by which he had acquired his “right” to use it could be left to the usual political maneuverings, but the outcome should be a single tax. Thus taxation would be on the basis of real wealth, not on transactions — not on the movements of money, which are only approximate reflections of the assents of buyer or seller. Holdings are more easily identified, whether those of the wage-earner or the rentier landlord.

If you accept that principle, the problem becomes how to tax, not what to tax. Anything temporarily withdrawn by me from the Commons is my personal wealth and the more of it I have borrowed the greater my responsibility to pay for the privilege, especially if my use of it deprives someone else of access.

So we are down to methods. How will you define and measure my wealth? How will you detect and catch up with me and punish me if I am a scammer? How will you limit the degree of inequality of personal wealth to limits that will be perceived as fair by everyone? And, trickiest of all, how will you determine how much I will have to kick in to the public pot to keep the guardian of the Commons (the government) functioning?

To take the last problem first : we need some agreement on what level of economic security should be the right of every citizen, a level below which the government has the obligation to intervene with help and above which the government has a duty to declare a limit. This is the business of legislatures, where the competing claims and estimates of bureaucrats can be aired and compared and priorities determined. The wider the geographical areas represented in these legislatures, the more likely are the comparisons to be assessed critically and not hidden in “midnight amendments” to funding bills. This is perhaps the strongest argument for the Single Tax.

So I suggest we eliminate all taxes but one. Collect it on a national basis, and leave the details of revenue distribution, state by state (based on population), to Congress. Then leave its distribution to local authorities to the state legislatures. No rancher in Montana, no matter how well-meaning, can take the time to truly understand the issues of permitting more oil-burning electrical generating stations in New Hampshire. We are, after all, a diverse population with diverse interests. But let each request by municipal governments and each request by the state legislatures percolate separately through debate up to the national level and you will have the components of a percentage distribution across budget lines. (The importance of bridge maintenance on the Mississippi versus the costs of Presidential travel back and forth to The Private Residence, for example.) The allocation to the states by population can be a reliable figure so long as the Census Bureau is kept out of the hands of politicians. Add up all the budget requirements at ascending levels — village, municipal, state, and federal — and you will arrive at a total.

And now you will have reached the famous wall : “what the traffic will bear”. The traffic (the voters en masse) will consider the benefits of your decisions and the state of their wallets, and determine exactly where the wall should be located. With this knowledge you can use a simple formula (see below) to calculate the fair share that each citizen will have to pay as a fraction of his wealth, to keep the government functioning at a level he considers fair.

Next question is how to determine each individual’s wealth. In our society we use money as a measure, really only because we haven’t found a better one. Admittedly, wealth may sometimes be a poor correlate of satisfaction, but we have not yet found a way to monetize happiness, and we can’t use it to measure itself. In a world where private property is defined by its market value, we will have to accept that as the measure. Who gets the job of determining that? Put the burden of calculating each citizen’s wealth on everyone — the same honor system that the IRS respects now. You will be presumed to be an honest reporter until an audit proves that you weren’t.

Then (in our present state of different legal treatment for the poor and the wealthy), if you are poor you are thrown into jail if you can’t come up with bail or, if you are rich, you are sent home with a slap on the wrist and a bracelet on your ankle to continue your jet-set life until your lawyers run out of postponements and the judges run out of patience and the tabloids run out of interest. For the wealthy, if you are eventually judged guilty of tax evasion the present penalty is for you to pay up what you owe, add a small fine, and go about your life of serial bankruptcy as though nothing had happened. That’s known as Trumping the system. For the poor, who can’t get any poorer, it’s either a few wasted years in jail, where they have no opportunity to earn the money required to pay what they owe, or a life on welfare because no one will give an ex-con a job. If you find this state of affairs as ridiculously unbalanced as I do, how do you ensure that it won’t simply continue under a wealth tax?

There is actually a powerful weapon at hand : confiscation. For reasons I cannot explain the ambition of rich people seems always to be to get richer still. Even for the billionaire who pledges to give away half his wealth before he dies, there seems to be remarkably little impulse to make it happen sooner rather than later. Under a wealth tax plan, each citizen would be responsible for evaluating his own wealth. The tax would be calculated on an annual snapshot. A list of assets and their value would be compiled and submitted to the IRS by each taxpayer. Omitting something from the list would be considered evidence that the owner has formally disowned it. It would then become public property, subject to auction with the proceeds going directly to the Treasury. The “forgetful” owner, or the negligent employer who neglected to supervise his “rogue” financial advisor may be given the right to re-purchase his former property by matching the high bid, but with the addition of a suitable (hefty) percentage penalty payable to the Treasury. Under-evaluation of any individual item on someone’s list, when uncovered by IRS auditors, would result in a double tax on the amount of the under-valuation, plus a fat fine. (Here we can anticipate another gold mine for the legal profession, but then, they are entitled to make a living, too, aren’t they? It’s still a capitalist country, whatever the Donald says. And the damages will be restricted to those who were rich enough to pay a white-shoe law firm in the first place. So where’s the greater harm?)

How will the IRS know when it is being scammed? Do not underestimate the power of the whistleblower. Fifteen percent of a couple of million dollars will wonderfully concentrate the mind, as Mark Twain might have observed. How did your neighbor manage on a clerk’s salary to acquire that Lamborghini in his driveway? Since his estimate of his own net worth would be public (To make this whole thing work we would obviously all have to declare our wealth publicly), retribution would be a single mouse click away and the reward would be juicy.

So we come to the question of the Single Tax rate. What percentage of our net worth will you and I as taxpayers have to kick in each year to make all this work?

Not as difficult as you might think, provided you keep your goals firmly in mind : 1. Adequate government funding. 2. Fairness. And 3. An algorithm that will keep everything adjusted and loophole free from year to year without the need (and risk) of Congressional intervention. A form of COLA, if you will, a simple Cost Of Living Adjustment.

We will need three numbers : the cost of running the government, the total national wealth, and the number of taxpayers upon whom it will be incumbent to come up with the cash.

My back-of-the-envelope estimate would suggest our national wealth at 322 trillion, allocating all assets to individual people, who after all own all the artificial entities currently exempted from paying taxes, such as non-profits, schools, churches, overseas branch offices, etc., all those shady entities blessed by the Supreme Court with artificial personhood that would be of course be terminated.

The number of current taxpayers in 2017 was 138 million, according to official figures. The number of exempt “entities” whose assets would be transferred to private ownership is about 1.5 million, according to the same source. Call the total 140 million, for the sake of simplicity.

The cost of funding the government for the current fiscal year as been officially budgeted at something between 3.5 and 4 trillion. We can use 3.75 trillion as a reasonable estimate.

Now we face the issue of fairness. It is obviously ridiculous to simply say that each taxpayer will have to pay $26,786 ($3.75 trillion divided by 140 million) to keep the country solvent. Those who benefit from Law and Order the most will have to assume the lion’s share of the burden. And on the other side of the coin, those who need the most help from government will have to not only be exempted from having to pay; their support must be included as part of the cost of government in the first place. How to accomplish this fairly is a puzzle. The principle of the Commons would suggest a solution. If our total national wealth is 322 trillion, and we are all its owners, then the fair share of each of us is 322 trillion divided by 327 million (the 2018 number for total population), or roughly a million dollars per person. (Actually $984,709.)

Didn’t think you were so wealthy? You are. And that’s only personal wealth. Think of all the roads, schools, buildings, courtrooms, police stations, yes, and the tanks and bombs and battleships and airplanes your citizenship gives you a share in, whether you like it or not — you benefit from them and have a duty to maintain them in good working order. It’s why you pay taxes in the first place.

According to these numbers, the required overall tax rate on this personal national wealth to finance one year’s budget would be 3.75 trillion divided by our national wealth (322 trillion), or about $1.17 of obligation per hundred dollars of wealth. Since the tax burden is being shared among only 140 million taxpayers, the cost of each individual share rises to 3.75 trillion (cost of one year’s budget) divided by 140 million, which calls for an average of $2.86 per dollar of net worth. Reasonable enough.

But now we have to make some more assumptions. A flat rate of 2.86 percent is an impossible number for a lot of folks whose net worth may be zero or less. They won’t be able to pay, even if they want to. So we shall have to excuse them, and even find a way to help them by spending more money on them if we can. If everyone’s fair share of the Commons is a million dollars, we have an easy baseline from which to measure our individual deviations from it, and with the exception of those requiring assistance instead of tax bills, what we need is an estimate of the number of people above and below that million-dollar line, and of how much revenue we need from those who can be expected to pay the tax to help pay those who will receive government subsidies.

The U.S. Budget for 2019 is projected by the Budget Office to be $3.45 trillion. I take the numbers below from a 2018 report by Credit Suisse’s Research Institute’s Global Wealth Databook.

There are 143 million taxpaying households. 122 million of them control 85% of the country’s wealth. That’s $274 billion. (I am rounding everything to make the calculations easier.) There are 28 millions of us who have net worths that put us so far below the official poverty level that we will require government assistance over and above the current help we are getting from Social Security, Medicare, Medicaid, food stamps, and housing subsidies. The cost of this added help comes to an average of about $45,000 per family, which will add $1.26 trillion to the budget, now estimated at $3.45 trillion. So approximately 215 million households will share the burden of raising $4.7 trillion. Prorated over their net worth holdings ($274 billion) that comes to an average flat tax rate of approximately

$4.7 trillion

divided by $274 billion

equals 17 %.

Does that sound scary? It shouldn’t. According to a recent survey of 130 million consumers, the average American taxpayer now already pays a total of 14% in federal, state, and local taxes alone, and that doesn’t count all the other incidental taxes we pay, such as sales taxes and fuel taxes and highway tolls and property taxes and gift taxes and tobacco taxes and soft-drink taxes and estate taxes and value-added taxes and who knows what more? And almost all of them fall heaviest on the poor (where they constitute a larger percentage share of income).

Spend a few hours chasing around the Internet and the official reports from all sorts of NGOs and government agencies and you will quickly conclude that determining a more accurate figure than that is hopeless. All the numbers are subject to every kind of distortion white-shoe tax-avoidance lawyers have ever been able to think of, as well as all the loopholes compliant legislators have been able to build into the tax code. I think with everything taken into account : federal, state, local, Social Security and Medicare, and all the rest it is safe to say that the average is probably north of 33%. That’s how much of our individual income it takes to run all levels of our government. To eliminate all other taxes and raise that sum with a levy of 17 % on everyone whose net worth exceeds a million dollars sounds like a bargain to me.

The most efficiently run democratic states right now (such as Denmark or Sweden) now have income tax rates of over 50%. Their citizens continue to vote the governments responsible into office, and profess themselves satisfied with things. They are relieved of worries about health care, education, and employment, and they score in the top ten of the UN’s Happiness Index.

Of course, as time passes and people’s net worth is decreased (that’s the whole point of the exercise; remember?) the rate will have to go up. But it will keep pace with spending, since it is recalculated every year, and as the present extraordinary gap between top and bottom decreases we will approach a fair sharing of the cost of everything from filling potholes to building new aircraft carriers, and we may even be prodded to rethink some of our priorities. (Is a new bridge in Speedunk, Iowa that will serve 100 commuters a day really more important than getting a few thousand homeless people in Upperville, Oregon out of the cold and into into decent housing?)

Remember the definition of compromise : “A plan that satisfies no one but avoids revolution.”

Using our 1 million dollar net worth baseline, the easiest way to let the richer pay more than the poorer would be a simple 1 million deduction. Net worth below that you pay nothing; above that you pay a flat rate on every dollar. Start with 17% and adjust starting with the second year, after the true size of the personal net worth of Americans is known. Each year will bring a new calculation, but the algorithm remains the same provided that the cutoff amount is firmly tied to the national net worth total : 1/322 billionth of national net worth. So long as that is religiously observed, loopholes and special perks will be closed, never to be reopened.

Problem solved? Not yet. The difficulty will be in putting the solution into a catchy phrase and selling it to a public that has been trained by Trump not to listen to details. “Single Tax” and “Land Tax” didn’t do it for Henry George, but something similar might be worth a try. People are a bit more educated now than they were in 1800, and a bit more critical of flim-flam men (and the greatest of them all, the Donald himself). The notion of no more sales taxes, no more property taxes, no more shuffling receipts and checking credit card accounts, might be sufficiently appealing to get some attention.

How does, “One Tax” grab you?

Or maybe, “Pocahontas to the Rescue!”

Respectfully yours,

Vance Weaver