Stiglitz wrote: APPENDIX: SPECIFIC TAX PROPOSALS Corporate Tax Reform • Raise corporate income tax rates while providing incentives for investments and job creation in the U.S. • Reduce spending on corporate welfare • Impose a special set of financial sector taxes, including the bonus tax, the financial transactions tax, the bank rescue fund, and electronic payment system fees • Impose taxes on monopolies and other rent-based enterprises • Ensure that multinationals pay their fair share of taxes and have incentives to invest in America by replacing the transfer price system with the formulaic approach and taxing firms on their global income • Reduce the bias towards leverage by making dividend payments tax deductible but imposing a withholding tax Individual Tax Reform • Institute a progressive tax increase • Institute a simplified individual income tax (e.g. a $100,000 standard exemption) combined with a value-added tax, levied at a low rate • Implement the fair tax, with which we eliminate the preferential treatment of dividends and capital gains • Eliminate the step-up of basis at death • Eliminate capital gains tax deferral, e.g. using mark-to-market accounting • Eliminate loopholes for the rich, e.g. the tax exemption of interest on municipal bonds • Broaden the tax base by curtailing tax expenditures for top incomes • Gradually eliminate tax deductibility of mortgage payments by converting the deductibility into a tax credit (with an upper limit) and/or into an equity subsidy for first time homebuyers • Reduce or eliminate the tax exemption of employer-provided health insurance, but balance it with a middle class compensatory tax adjustment • Eliminate savings subsidies as tax expenditures Other Taxes and Ways of Raising Revenues • Impose environment taxes, including a tax on carbon • Impose inheritance and estate taxes • Improve management of government owned natural and other resources, including be!er auctioning
-- Ron
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