Corporate Revenue Tax
I hate how the federal government collects taxes in the United States. The income tax is intrusive, inefficient, and punishes productivity. So what do I want instead? A flat tax? A value-added tax? Nope--those have too many problems as well. What I propose instead is the Corporate Revenue Tax and Tariff.
The way this works is that all corporations would pay a graduated tax on their total gross revenue (not on their net income). There are five brackets for this tax, each as a percentage of the total GDP of the United States.
50% tax at 1% of GDP (about $150 billion)
40% tax at 0.1% of GDP (about $15 billion)
30% tax at 0.01% of GDP (about $1.5 billion)
20% tax at 0.001% of GDP (about $150 million)
10% tax at 0.0001% of GDP (about $15 million)
The tax bracket for a corporation is based on their global revenue, but they only pay taxes on their revenue from the United States. The tariff works the same way--if a foreign corporation operates in the United States, they pay a tariff of the exact same rate for any goods they import or services they provide. This level of taxation could easily replace the entire federal income tax.
There are a number of good features about this approach. Corporations would be discouraged from getting larger unless there was a really good reason--you would never acquire another company unless you thought it would really help your profits (not just revenue). It would be very difficult for corporations to avoid this tax. There are no deductions or tax breaks and a corporation can't hide revenues without a revolt from its shareholders (unlike profits which are easy to hide). Most importantly, this tax would punish corporate growth, not productivity, not savings, and not investment (excepting investment in large corporations). Small companies would thrive, while giant corporations (Walmart, ExxonMobile, GE, etc.) would often voluntarily break up in to smaller companies just for tax reasons.
If you really wanted to, you could tax individuals like this as well, but the amount of revenue wouldn't be that significant and it would just encourage very wealthy individuals to become citizens of other countries. While that's not terrible, I prefer to just tax corporations on principle. While we are at it, I would ban income taxes even at the state or city level as a violation of your right to privacy from the 6th amendment ("The right of the people to be secure in their persons, houses, papers, and effects..."). States and cities could use sales taxes, property taxes, and the like as usual. However, I would rather see half of the Corporate Revenue Tax collected be given directly to the states (in proportion to the amount collected in each state) in place of all sales taxes (a further half of which would be given to the cities in that state).
Other than the obvious difficulty of getting such a law enacted, I'm convinced this would be better for everyone (rich or poor) and would be better regardless of what size you think the federal government should be (you can alter the tax brackets or percentages to generate just about any reasonable amount of revenue desired). If you see a flaw in this plan, I'd love to hear about it (other than "it's politically impossible").