Here is a tax code I thought of that is similarly structured as OP. Like Kandahar I like zero corporate tax, and I originally taxed capital gains like income but had an economist tell me he thought that it would have a negative effect on growth and the equity markets at the high end of my rates. I am not sure, I lowered them to a flat 20% for now, but I am open to change. I added a federal sales tax and I am open to having that removed if the revenue is high enough to cover total expense of government.
Scrap the current tax code entirely. Implement a progressive income tax on net income, no deductions, and a federal retail sales tax on goods and services. No corporate tax. No payroll SSI/Medicare/Unemployment taxes. No health care costs for business. No estate tax. No joint filings. No separate social security tax as social security will be part of regular budget and funded through regular taxes.
Net Income Tax Rates:
0% on income below $20,000, 10% on any additional income between $20,000-$100,000, 30% on any additional income between $100,000-$1,000,000, and 40% on any additional income above $1,000,000. So someone making 1.2 million would pay in federal taxes ($20,000 X 0)+(80,000x.10)+ (900,000 X .30) + (200,000 X .40)=$358,000.
Rates end up looking like the following:
$20,000 income...0%
30,000................3.3%
40,000................5%
50,000................6%
60,000................6.7%
70,000................7.1%
80,000................7.5%
90,000................7.8%
100,000...............8%
200,000...............19%
500,000...............26%
1,000,000.............28%
1,500,000.............32%
2,000,000.............34%
1,000,000,000.........39.9%
20% capital gains tax
10% federal retail sales tax on goods and services with exemptions on medical, whole foods in grocery stores, and rent. In the roofer example given earlier in the thread where a roofer buys shingles at a store and then puts them on the house, would the homeowner pay sales tax twice on the shingles? No, the roofer would pay sales tax at the store, and then the homeowner would deduct the cost of the shingles and pay sales tax only on the labor. With businesses, the stuff they buy from vendors will have no sales tax, only the retail finished goods the public buys.
Adopt single payer health insurance covering solely catastrophic along with strict nutritional regulations on the food and beverage industry that transforms the American diet(I know politically impossible likely). The minor stuff in health care will go to a cash system with people paying out of own pocket or relying on charity. The elderly will get an expansion of benefits similar to what they receive now in Medicare.