TAX REFORM

My budgetary scheme is designed to maximize both economic growth and equality of opportunity: the former by eliminating all tax penalties on activities that contribute to economic growth and replacing them with taxation on activities that hinder it, and the latter by aggressive taxation of the concentration of productive economic resources in small groups of people and by making expenditures across all jurisdictions independent of the revenue drawn from each jurisdiction. 

The revenue portion of the budget plan is derived primarily from a progressive property tax on owned natural resources, with smaller revenue components of a corporate tax based on risk assessment and a tax on negative environmental externalities. These tax levies replace all existing sources of revenue such as sales and income taxes, both of which penalize positive economic activity (consumption and employment, respectively) that the goal of any fiscal policy should be to encourage, not inhibit. 

By contrast, all of the proposed sources of revenue instead charge individuals and corporations for activities that diminish the economy. The centerpiece of these is a progressive property tax applied only to natural resources such as land and water. The limitation to natural resources prevents the tax from penalizing economically beneficial spending on the construction of new manmade assets such as homes or factories, while charging for the hoarding of natural resources that would by default belong to the public at large. As a progressive tax, the tax rate per property value would increase as the total value of owned properties increases, thus quickly becoming extremely steep when a single individual or corporation hoards vast amounts of natural resources. 

Rather than using arbitrary rate brackets to achieve a progressive rate structure as do other progressive taxes such as most income taxes, the increasing rate of taxation would be accomplished by making the amount owed proportional to the square of the value of owned property, thus making the rate progression both smooth and consistent to arbitrarily high values. This levy would be subject to a homestead exemption at a level similar to the $7000 to $10000 used in many states, so as to enable a distribution of resources in which all individuals have access to at least a minimum allocation for basic residential needs. 

The rate will be significantly reduced for resources used for production of essential consumer goods such as farm products that yield a low rate of income-to-asset return for the producers, so as to still encourage maximum distribution of the productive land and other resources among many individuals and discourage their concentration among small numbers of wealthy corporations while nonetheless ensuring that producers are charged a fair rate. 

One of the smaller revenue sources consists of a corporate tax, but unlike most corporate taxes that tax corporate income and therefore disincentive positive economic activity, this tax would instead be applied to the means by which corporations are an economic drain: their liability protection that enables them to potentially cost other individuals and companies arbitrarily large amounts of money without the individuals involved being required to compensate them. This tax rate would therefore be determined by a periodic assessment of the corporation’s risk of insolvency. 

The final stream of revenue would come from levies on pollution and other causes of environmental damage such as deforestation and erosion, with charges being equal to the estimated cost of governmental efforts to mitigate both the damage itself and its harmful societal consequences. The expenditure portion of the plan would allocate governmental expenditures on services such as education, infrastructure, and law enforcement based on the relative needs of each jurisdiction irrespective of the tax revenue received from the jurisdiction. 

This would eliminate the extreme inequality of opportunity between individuals residing in different jurisdictions which results from the current conditions in which a large fraction of the budgeting for these services is derived from the tax revenue in each individual jurisdiction. While control of each jurisdiction over its own budget is important and will be preserved, to prevent penalizing those who happen to reside among a less wealthy population or in a region where services are more costly to provide, the budgets of each jurisdiction will be subsidized at a level such as to equalize the quality of services across all jurisdictions.