Taxes should be
scaled to ability to pay through progressive, graduated rates that place
low taxes on low income people and higher taxes on higher income people.
Taxes should also encourage the conservation and restoration of the
natural environment, the ecological capital that is the foundation of
the human economy.
The Greens thus
support two tax shifts: from regressive payroll, sales, and excise taxes
to (1) progressive income and wealth taxes and (2) ecological taxes
on pollution, resource extraction, harmful products, and the use of
our common wealth of natural capital (land sites according to land value;
timber and grazing lands; ocean and freshwater resources, oil and minerals,
electromagnetic spectrum, satellite orbital zones).
The federal tax
system is the nation's biggest welfare system. In 1995, special tax
breaks cost $456 billion. Most of these tax breaks went to rich individuals
and corporations. Corporations got another $86 billion in direct subsidies.
By contrast, welfare for poor people (Aid to Families with Dependent
Children) cost the federal government $22 billion. Yet, to hear the
politicians talk, social welfare programs are breaking the federal budget.
We favor eliminating
tax loopholes. Subsidies should be on the budget, where we can scrutinize
and debate them, not hidden as subsidies to corporate special interests
in an overly complex tax code.
Since 1960, the
tax structure has become less progressive. In the early 1960s, there
were the first of many capital gains tax cuts. Then corporate income
tax rates were cut. Then tax rates on personal income taxes for the
highest tax brackets were cut. Then regressive payroll taxes for Social
Security and Medicare were raised dramatically in the early 1980s, while
tax rates for the rich were cut once again. Today, the federal tax structure
is less progressive than it has ever been. We favor restructuring the
federal tax structure so that it is progressive, with higher rates for
high-income people than for low income people.
problem with the existing tax structure is tax rate competition among
states and localities. It has a virtual civil war between states and
localities offering tax breaks, subsidies, and other government favors
to lure corporate investment into their jurisdictions. Instead of corporations
competing for customers, we have states and cities competing for corporations.
In addition, unfunded federal spending mandates force local governments
to raise regressive property and sales taxes, further shifting the costs
of government on to middle and low income people. To remedy these problems,
we favor centralized collection of most taxes by the federal government,
combined with revenue sharing with Community Assemblies, municipalities,
counties, and states where decentralized administration of government
services is rendered more democratic and accountable.
- Income Tax
Simplicity and Progressivity: Enact a no-loopholes, graduated
personal income tax with equal taxation of all income, regardless
of source. Provide an income tax credit for each dependent to replace
and fully compensate for the current exemptions and deductions that
benefit to the average taxpayer, such as the home mortgage deduction
and medical deductions.
Social Security: A Basic Income Above the Poverty Line for All:
Build into the progressive income tax a guaranteed minimum income
that maintains a modest standard of living. Everyone will receive
a Basic Income Grant, paid in monthly installments like current Social
Security. However, this income will be included in the income tax
base, so that everyone will receive a basic income floor, but the
cost of providing it to those who don't need it will be recovered
through the progressive income tax. Universal Social Security will
combine entitlement universalism with tax universalism, thus ending
the political isolation of means-tested programs and the fiscal irresponsibility
of entitlement universalism regardless of need. Universal Social Security
would replace the existing Social Security system and the stingy,
punitive, and intrusive Temporary Assistance to Needy Families.
- Maximum Income:
into the progressive income tax a 100% tax on all income, regardless
of source, over ten times the minimum wage. With this Ten Times Rule
in effect under today's extremely unequal distribution of income in
the U.S., a 100% tax on income above ten times the minimum wage would
allow us to cut the income taxes of everyone in the bottom 99%, by
over half for the top brackets, by over three-quarters in the middle
brackets, and totally for the lower brackets-and still generate about
40% more tax revenues than under the current income tax structure.
in ecological taxes on pollution, resource extraction, harmful products,
and the use of our common wealth of natural capital (land sites according
to land value; timber and grazing lands; ocean and freshwater resources,
oil and minerals, electromagnetic spectrum, satellite orbital zones).
Ecological taxes will price socially and ecologically damaging production
practices and products at their true social and ecological costs.
These taxes would steer the economy away from damaging production
practices and products and encourage ecologically benign substitute
technologies and products to enter the market. Products that might
have Eco-Taxes added on to their price include gasoline, pesticides,
household and lawn chemicals, air conditioners, jet travel, and disposable
products. Eco-Taxes would be revenue neutral, with the revenues received
dedicated to subsidizing the development of ecological production
- End Corporate
Welfare: Take the Rich Off Welfare: Eliminate
loopholes in the personal income tax such as accelerated depreciation,
special capital gains treatment, and home mortgage deductions for
mansions and second homes. Replace existing hidden off-budget subsidies
in the form of tax breaks on corporate income taxes with direct on-budget
subsidies if they serve a vital national interest, such as building
low-income housing and developing of worker and community-owned cooperatives.
Off-budget tax-break subsidies should not be used as economic incentives.
Incentives to the private sector should be direct grants, subsidies
that are scrutinized as part of a regular budgetary review process,
not covertly distributed by an arcane tax code.
Regressive Payroll Taxes: Finance
increased social security and health care benefits through progressive
income taxes instead of regressive payroll taxes.
Taxes on Corporate Revenues and Assets: Since
the 1960, corporate income taxes have been cut repeatedly. The share
of federal revenues from corporate income taxes has declined from
about one-fourth in 1960 to about one-eighth today. The effective
corporate tax rate declined from around 49% in 1950 to 26% by 1995
due to the many loopholes and complexities in the tax code. Corporations
should pay their fair share. The Greens propose to replace the corporate
income tax with progressive taxes on corporate revenues and assets.
The a no-loopholes revenue tax would be far simpler to pay and administer
than the income tax based on corporate profits, which can be manipulated
and hidden in complicated accounting practices. A progressive revenue
tax of 5% for businesses with sales less than $500 million and 10%
for business with sales over $500 million would raise enough taxes
today to bring the corporate share back to its level in 1950. Retail
businesses, with high expenses for inventories, should be taxed on
net revenues (gross revenues minus cost of inventories). The progressive
tax on assets would discourage mergers and acquisitions and encourage
more humanly scaled enterprises.
- Wealth Tax:
a steeply progressive tax on net wealth over $2.5 million (the top
5% of households).
the loophole-ridden estate tax with a no-loopholes, progressive inheritance
tax on inheritances over $1 million.
- Stock and
Bond Transfer Tax: Encourage
a shift from speculative to productive investments through a federal
stock and bond transfer tax on all securities transactions.
- Currency Speculation
currency speculation sabotages domestic policy by affecting the value
of the dollar. It diverts firms from using their capital productively
and increases international monetary instability. Currencies should
trade hands to finance real economic activity, not reap instant windfall
profits. The U.S. should support an internationally uniform tax on
currency conversion to discourage speculation. Revenues from the currency
speculation tax should be channeled through international agencies
into ecologically sustainable, democratically controlled development
in poor countries.
- Fiscal Federalism:
Sharing and State and Local Tax Relief: The federal government
should be the principal source of tax-revenue collection in order
to avoid tax rate competition among jurisdictions and in order to
overcome the disparities in tax-base potential among jurisdictions.
A federal system of revenue sharing and fiscal federalism should be
established which combines centralized tax collection (to discourage
tax rate competition) with decentralized administration (to maximize
local democracy and accountability). The federal government would
fund all federal mandates and, in addition, make substantial block
grants to states, counties, municipalities, and citizen assemblies
on a per capita basis, with a supplementary adjustment (like the financial-equalization
entitlements of the Canadian system of revenue sharing). The supplementary
adjustment would equalize the revenue capacity among richer and poorer
jurisdictions, so that all jurisdictions have sufficient resources
to provide reasonably comparable public services at reasonably comparable
levels of taxation. States, counties, municipalities, and Community
Assemblies would be free to add their own taxes, but all would have
a floor of revenue from the federal government enabling them to provide
tax relief from regressive state and local sales, excise, and property
- Peace Tax
there is complete and general disarmament, we support the U.S. Peace
Tax Fund proposal, which would allow citizens to direct their tax
payments away from funding the military in a manner analogous to provisions
for conscientious objection to military service.