Policy Document Series · Issue 2 of 35 · April 2026
Making the Economy Work for Everyone
Money at the bottom of the economy moves — it cycles through groceries, rent, car repairs, and local businesses. Money at the top sits. Trickle-down economics has been tested across 18 OECD countries over five decades. The London School of Economics found it increases inequality and has zero statistically significant effect on GDP or unemployment.
The Common Good Party's tax policy is built on a simple principle: everyone pays their fair share, with no escape routes for the ultra-wealthy.
The plan raises an estimated $13.85 trillion over ten years — closing approximately 70% of the projected national deficit while fully funding healthcare, education, and infrastructure. Critically, every credit and deduction that benefits working and middle-class families is preserved and expanded. This is not a tax increase on Americans. It is a tax increase on wealth that has escaped taxation for decades.
The plan includes: progressive income tax rates up to 60% on income above $10 million; a mark-to-market tax on unrealized gains for those worth $100M+; closure of the "Buy, Borrow, Die" loophole; a 28% corporate rate with a 20% effective minimum; a 2–3% annual wealth tax; a 30% exit tax on renunciation; and a financial transaction tax.
The Kansas Experiment — the cleanest domestic test of supply-side theory — was reversed by a Republican legislature as an unambiguous failure. The LSE found zero correlation between tax cuts for the wealthy and GDP growth across 18 countries over 50 years. The evidence is in.
The American tax system is broken in a specific, measurable way: the wealthiest Americans pay a lower effective tax rate than working-class families. ProPublica's IRS Files revealed that Elon Musk, Jeff Bezos, and Larry Ellison each paid near-zero federal income taxes in certain years while their wealth grew by billions. This is legal — and that is the problem.
The American tax code was not always this way. During the period of greatest American economic growth — the 1950s through 1970s — the top marginal income tax rate was 70% to 91%. The middle class expanded rapidly. And the economy grew faster, more broadly, and more equitably than at any time since.
1913
The 16th Amendment
The 16th Amendment to the Constitution is ratified, authorizing a federal income tax. The original top rate: 7% on income above $500,000 (approximately $15.5 million in today's dollars).
1935
Social Security Act
The Social Security Act creates the payroll tax — a flat tax on wages that funds retirement, disability, and survivor benefits. The system is designed to be universal and contributory.
1944
Wartime Peak
The top marginal income tax rate hits 94% on income above $200,000 (approximately $3.4 million today) to fund World War II. The rate remains above 90% through the Eisenhower era — a period of record economic growth, middle-class expansion, and infrastructure investment.
1964
The Revenue Act
President Johnson signs the Revenue Act of 1964, cutting the top marginal rate from 91% to 70%. The cut is designed to stimulate demand — and it works within a still-progressive structure. Corporate tax revenue remains approximately 6% of GDP.
1981
The Reagan Revolution — ERTA
The Economic Recovery Tax Act (ERTA) cuts the top rate from 70% to 50%. In 1986, the Tax Reform Act slashes it further to 28% — the lowest top rate since 1931. Capital gains rates are cut simultaneously. The promised trickle-down boom never materialized; inequality began its 40-year climb and the national debt began its exponential growth.
1993
The Clinton Reversal
President Clinton raises the top marginal rate to 39.6% — without a single Republican vote. Opponents predicted economic catastrophe. Instead: the economy added 22.7 million jobs and produced a federal budget surplus by 2000 — the first in 30 years.
2001–2003
The Bush Tax Cuts
The Economic Growth and Tax Relief Reconciliation Act (EGTRRA, 2001) and the Jobs and Growth Tax Relief Reconciliation Act (JGTRRA, 2003) cut the top rate to 35%, capital gains and dividend rates to 15%. Combined cost: approximately $1.7 trillion over ten years (CBO). The surplus vanished. The cuts were followed by the worst financial crisis since the Great Depression.
2017
The Tax Cuts and Jobs Act
The TCJA slashes the corporate rate from 35% to 21% and the top individual rate from 39.6% to 37%. Cost: approximately $1.9 trillion over ten years (CBO). Corporate profits surged; stock buybacks hit records. Worker wages were unchanged.
2025
The Current Crisis
National debt exceeds $36 trillion. Annual deficit exceeds $2 trillion. The wealthiest Americans pay lower effective rates than middle-class workers. The IRS has been systematically defunded. And the prevailing political response is to cut taxes further.
International context: The US top marginal rate of 37% is far below peer nations. Denmark taxes top earners at 55.9%, Japan at 55.9% (national + local), and France at 55.4% (including social charges) — all while maintaining strong, innovative economies. The US is not undertaxed by historical American standards alone; it is undertaxed by the standards of every major democracy on Earth.
The United States has among the lowest top marginal income tax rates in the developed world. Most peer nations tax high earners significantly more — and have stronger economies, lower inequality, and better public services as a result.
| Country | Top Income Rate | Corporate Rate | Wealth Tax | Exit Tax |
|---|---|---|---|---|
| Denmark | 55.9% | 22% | None | Yes |
| Austria | 55% | 24% | None | Yes |
| France | 55.4% | 25% | IFI (real estate) | 30% on financial assets |
| Netherlands | 49.5% | 25.8% | Deemed return tax | Yes (10 years) |
| Germany | ~47.5% | ~30% | None | Yes |
| Norway | 47.4% | 22% | Yes (annual) | ~37.8% on unrealized |
| Japan | 55.9% | ~30% | None | Yes |
| United States | 37% | 21% | None | ~20% on gains only |
Key lesson from Norway: A successful annual wealth tax requires citizenship-based taxation combined with strict exit taxes — preventing capital flight by making renunciation itself costly. The U.S. already uses citizenship-based taxation, making our structural position stronger than any European country that attempted a wealth tax. Japan and Denmark demonstrate that top rates above 55% are fully compatible with strong, innovative economies.
The Common Good Party's tax policy contains ten interlocking provisions. Each targets a specific failure in the current system. Together, they create a tax code where everyone pays their share and wealth cannot compound indefinitely without taxation.
| Income Bracket | Rate | Notes |
|---|---|---|
| Up to $50,000 | 10% | Protects working class — no change from current |
| $50,001–$150,000 | 22% | Middle class — broadly unchanged |
| $150,001–$400,000 | 24–32% | Upper middle — modest increase |
| $400,001–$1M | 37% | Current top rate — status quo |
| $1M–$5M | 50% | "Millionaire bracket" — 70%+ public support |
| $5M–$10M | 55% | In line with Germany, Japan, Australia |
| Above $10M | 60% | On par with Denmark, Austria, France |
All rates are marginal — they apply only to income above each threshold. A person earning $1.1M pays 37% on dollars $400K–$1M and 50% only on the $100K above $1M. Capital gains above $1M/year are taxed as ordinary income; gains below $1M retain current preferential rates to protect small investors and retirees.
Eliminating "Buy, Borrow, Die" — Three Interlocking Provisions
Mark-to-Market: Those worth $100M+ pay tax annually on unrealized gains.
Losses generate carry-forward credits. 5-year payment plans for illiquid assets. Legal basis
upheld in Moore v. United States (2024).
Collateral Loan Rule: Borrowing $5M+/year using appreciated assets as collateral
is treated as a taxable realization event. Banks must report collateralized loans above $5M to the IRS.
Stepped-Up Basis Elimination: Heirs inherit the original cost basis above $7M
individual / $14M married. Protects family farms and small businesses; ends the reset-at-death loophole.
Corporate Taxation Reform
Corporate rate to 28% (OECD GDP-weighted average: 26.1%). 20% minimum effective rate — no profitable U.S. corporation pays zero. GILTI raised from 10.5% to 21%; OECD Pillar Two 15% global minimum enforced. Executive compensation deduction capped at 50:1 CEO-to-median-worker pay ratio. Stock buyback excise tax raised from 1% to 4% with supermajority shareholder approval required. Full beneficial ownership disclosure for all U.S.-registered entities.
Estate & Inheritance Tax Reform
0% on estates under $7M individual / $14M married — protecting family farms and small businesses entirely. 45% on $7M–$20M. 55% on $20M–$50M. 65% above $50M, targeting dynastic wealth only. Dynasty trusts subject to deemed distribution tax every 30 years. GRATs reformed with 10-year minimum term and 25% minimum taxable remainder.
Wealth Tax
2% annual tax on net worth above $50M and 3% above $1B. Applied to worldwide assets of U.S. citizens. U.S. citizenship-based taxation prevents the capital flight that undermined European wealth taxes — you cannot escape by moving to another country.
Exit Tax
30% tax on total net worth for those worth $20M+ who renounce citizenship. If a taxpayer contests valuation and loses, an additional 10% penalty applies (40% total) to prevent bad-faith delay. 12-year installment option available. Makes renunciation a last resort, not a tax strategy.
Financial Transaction Tax
0.1% on every stock, bond, and derivative trade. Estimated revenue: $50–100 billion annually. Primary effect: eliminates high-frequency algorithmic trading that extracts billions from ordinary investors through microsecond front-running. Negligible impact on long-term investors — a buy-and-hold investor pays less than the bid-ask spread they already pay. The EU, UK, France, and South Korea all have financial transaction taxes.
Loopholes: Closed vs. Preserved
Closed — benefit the ultra-wealthy only: Carried interest preference (~$14B/yr). Stepped-up basis above $7M (~$50B/yr). 1031 exchange above $500K gain (~$30B/yr). Zeroed-out short-term GRATs (~$20B/yr). Dynasty trust GST bypass (~$15B/yr). Roth IRA above $5M balance (~$5B/yr). Corporate offshore profit shifting (~$70B/yr). Pass-through income sheltering (~$16B/yr). Puerto Rico Act 60 abuse (~$8B/yr).
Preserved & expanded — working families: Child Tax Credit ($3,600/child, fully refundable). Earned Income Tax Credit (expanded income range). Mortgage interest (primary residence up to $750K). Retirement savings 401k/IRA (under $5M balance). Education credits (American Opportunity expanded). Clean energy credits (solar, heat pumps, EVs). Small business R&D credit (under $50M revenue). EITC for childless workers (tripled). Dependent care credit (expanded, refundable).
IRS Enforcement — $12 Returned per $1 Spent
The IRS collects $12 in revenue for every $1 spent on enforcement — the highest ROI in government. The CGP plan: minimum 30% annual audit rate for returns above $1M. Minimum 50% audit rate every 3 years for corporations with $250M+ assets. Dedicated Wealth Enforcement Division. IRS budget doubled over 5 years. Racial audit disparity eliminated (currently low-income EITC filers are audited at 5.5× the rate of millionaires). Whistleblower reward raised from 15% to 30% of recovered revenue.
| Policy Provision | 10-Year Revenue |
|---|---|
| Top bracket rate increases | ~$1.5 trillion |
| Capital gains reform | ~$1.2 trillion |
| Mark-to-market on unrealized gains | ~$2.0 trillion |
| Collateral loan rule | ~$500 billion |
| Corporate minimum + offshore closure | ~$2.0 trillion |
| Estate tax reform | ~$500 billion |
| Wealth tax (2%/$50M+, 3%/$1B+) | ~$3.0 trillion |
| Financial transaction tax | ~$750 billion |
| Loophole closure (carried interest + other) | ~$1.0 trillion |
| IRS enforcement uplift | ~$1.4 trillion |
| TOTAL | ~$13.85 trillion |
This is the funding mechanism for the entire Common Good Party platform. The $13.85 trillion in ten-year revenue funds every major policy commitment.
| Program | 10-Year Cost | Revenue Source |
|---|---|---|
| Medicare for All (Issue 1) | ~$2–3 trillion net | Wealth tax + upper brackets |
| Free public college (Issue 4) | ~$800 billion | Wealth tax + loophole closure |
| Infrastructure (Issue 25) | ~$2 trillion | Corporate reform + FTT |
| Universal childcare (Issue 35) | ~$700 billion | Top bracket increases |
| Affordable housing (Issue 3) | ~$500 billion | Corporate LIHTC expansion |
| Deficit reduction | ~70% of $20T gap | All provisions combined |
The tax plan is not a wish list. It is a funded budget. Every program in the Common Good Party platform has a corresponding line item in this tax plan. The numbers work — not because they are aspirational, but because the current tax code leaves trillions of dollars on the table through loopholes, preferential rates, and systematic under-enforcement.
The phased approach ensures the IRS has enforcement capacity before new provisions take full effect. No new spending program launches until its corresponding revenue stream is operational.
The strongest objections to progressive taxation deserve honest engagement. Each is addressed below with evidence.
"The wealthy will just leave."
The United States uses citizenship-based taxation — the only major country to do so. Moving to another country does not reduce your U.S. tax obligation. Renouncing citizenship triggers the 30% exit tax. Norway's experience confirms that wealth taxes combined with exit taxes do not produce meaningful capital flight. The primary risk is avoidance, not migration — which is why the loophole closures and mark-to-market provisions are inseparable from the rate increases.
"High taxes kill economic growth."
The United States experienced its fastest, most broadly shared economic growth under top marginal rates of 70–91%. The London School of Economics found zero correlation between tax cuts for the rich and GDP growth across 18 countries over 50 years. Kansas proved it domestically. Denmark, Sweden, and the Netherlands — all high-tax — consistently rank among the most competitive, innovative economies on Earth.
"A wealth tax is unconstitutional."
Moore v. United States (2024) upheld Congress's broad taxing power and declined to require realization as a constitutional prerequisite for taxation. Norway has taxed wealth annually for decades. The more important question is whether a democracy can function when 750 billionaires hold more wealth than the bottom 50% combined.
"This will hurt small businesses."
The income tax brackets protect all income below $400,000 at current or lower rates. The mark-to-market tax applies only to those worth $100M+ — not the $10M small business owner. Capital gains below $1M/year retain preferential rates. The small business R&D credit is expanded. Small businesses are protected at every level; the targets are ultra-wealthy individuals and multinational corporations.
"60% is too high — people won't work."
The 60% rate applies only to income above $10 million per year. A person earning $10.1M pays 60% only on the $100,000 above $10M — an additional $60,000 in tax. The behavioral response at these income levels is negligible. Denmark and Japan have top rates above 55% and have no shortage of high earners. The top rate under Eisenhower was 91% during the greatest economic expansion in American history.
Taxation is the funding mechanism for the entire Common Good Party platform. Every policy position connects back to this document.
| #1 | Healthcare | Progressive taxation funds the transition to Medicare for All. Employer health tax replaces current premium spending. |
| #3 | Housing | LIHTC expansion, affordable housing investment, and Housing First funding sourced from corporate tax revenue and loophole closure. |
| #4 | Education & Student Debt | Free public college funded by wealth tax and upper-bracket revenue. Student debt cancellation costs offset by corporate minimum tax. |
| #13 | Labor & Minimum Wage | EITC expansion directly increases take-home pay for working families. Child Tax Credit expansion reduces child poverty. |
| #15 | Social Safety Net | Social safety net programs funded by progressive taxation. The multiplier effect ensures redistributed dollars generate economic growth. |
| #20 | Corporate Power & Antitrust | Executive compensation cap, stock buyback reform, and corporate transparency provisions are shared between both policies. |
| #25 | Infrastructure | $2 trillion infrastructure investment funded by corporate tax reform and financial transaction tax revenue. |
| #29 | National Debt | $13.85 trillion in 10-year revenue closes ~70% of the projected deficit. This is the fiscally responsible platform. |
| #31 | Government Corruption | IRS enforcement subject to Universal Mandatory Duty to Act Standard. Shell company transparency closes corruption enablers. |
| #35 | Affordability Crisis | Working-class tax relief, expanded credits, and funded public services directly reduce the cost of living for ordinary Americans. |
"Money at the bottom of the economy moves. Money at the top sits. A tax code that moves money downward is not charity — it is the most efficient way to run a $25 trillion economy. This is not a tax increase on Americans. It is a tax increase on wealth that has escaped taxation for decades. It is a lift up, not a handout."— The Common Good Party
Sources & Citations