Percentile Taxation and Citizenship

The media is awash in talk about socialized healthcare, taxation, and immigration. I do not claim to be an expert in any of this, and probably something like this would not work out, but on a lark, I started to cast about in a kind of brainstorming session about how I might solve the taxation problem and the issues surrounding citizenship.

The opening gambit is socialized healthcare, also known as Single Payer. Let’s just call it healthcare moving forward as a shortcut for what we’re really talking about. The next series of moves are crafted as a kind of chess game, with different pieces being different cliched arguments:

  • We don’t want the poorest to suffer and die, it doesn’t conform to the moral standard of the three faiths, so we must act.
  • It is very expensive for some, and thoughtlessly free for others. The old are expensive, the young are not, and there are outliers everywhere.
  • The government is already up to its neck in debt, how can we saddle ourselves with more?
  • Nobody can escape any of the above points. Otherwise, they will appear to be a hypocrite.

The challenge of healthcare is how to pay for it. Healthcare is rather expensive at the start, but in the long-term, it is actually cheaper than what we have right now. How can we afford such a thing as a society and also keep many of the other services that we have come to expect from our government? The best answer, the most common one is to reformulate taxation.

Taxation

It seems as the tax code is the most complicated subject in all of government. We keep on making attempts to address what is fair and just and depending on the political winds, it changes from generation to generation. I am not going to make any claims for practicality, this is brainstorming, not policy.

There have been many plans over the years. Flat taxes, graduated taxes, and many economic theories such as trickle-down economics that has been featured while I’ve been alive, since 1975. This plan is just another possibility, and I don’t know if it would actually work out, but it was the first thing I thought of, which launched this blog post.

How about a taxation plan based on percentiles? You take all citizens that are not disabled, you list out all their incomes, something for which already exists in the IRS. Then you order everyone from smallest income to highest income. We will dispense with all the tax loopholes, and resolve to simplify everything down to raw income. For businesses, we will do the same, their profits ranked from smallest to largest. Then from there, we calculate the percentile rank across the entire gamut for both classes of entity, people, and corporations. Those at the bottom pay next to no tax, while those at the very top pay almost all tax. The percentile rank makes calculating where you sit rather easy. The IRS can calculate this value and send out a postcard letting you know. Since there are no more loopholes, there is no more need for complicated forms and instructions. The withholding is done by employers, the IRS settles all accounts, and every April 15th you either get a bill or a check.

Everything with taxation is wrapped up with politics. Because of this, and because of politics, there are counter-arguments for and against any sort of change to taxation. The most common retort to a change in taxation like this, where the rich would have to pay an exceptionally high tax, is the argument that they would just leave the country to avoid the tax. So then we come to the next section…

Citizenship

We are all citizens of the United States of America. Many of us acquired that citizenship by nativity. We didn’t do anything to earn or deserve it other than have the luck to be born in the right place at the right time. Currently, citizenship and immigration is a hot-button issue. Many people want to come to the United States, and so over time, we have started to reduce and control immigration to our country. Very recently, I have noticed a rather unpleasant nationalistic nativism which is adding new discrimination to this process. We aren’t holding the lamp by the golden door, as much as we want to search a line-up and cherry pick the very best to join our country.

Citizenship provides rights, privileges, and abilities that people without US Citizenship may not have. We have started to covet this citizenship both economically and culturally. It is something we have, and something we want to keep to ourselves. What lies at the heart of citizenship? We are all part of a greater whole, the dream of America, and we get immense benefits from that, and so we must meet the cost by paying taxes. Taxes pay for citizenship and civilization. If you want to play, you have to pay. Also, if you want to pay, you can play.

Those that wish to immigrate to the United States should be willing to agree to our taxation. Those that do not agree with our taxation should be excluded from citizenship. They are unwilling to pay for it, so why should they take advantage of it? So, when it comes to the Dreamers, they are all paying taxes so they can be citizens. If someone who is exceptionally rich doesn’t want to pay taxes, they can abdicate their responsibilities to society at the cost of their citizenship. They can, of course, re-acquire the citizenship as easily as anyone else, by agreeing to pay taxes based on their income.

Final Thoughts

I don’t really suppose any of this would be actually practical, but amidst all the arguments currently being discussed, why not at least touch on these ideas? In the current political climate, there is an exceptional number of interested parties, and the quality of discourse is more varied than it has ever been before. I’m sure if anyone reads this post, they will have strong responses, and I welcome the commentary, but I reserve the right not to respond if there is no point to it. As I said before, this is not policy, this is brainstorming. Please keep that in mind if you are upset.

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