Imagine this scenario: When you earn a dollar and spend it, your income is taxed but once. If you save it, you're taxed again. If you invest those savings, you face a capital gains tax that is unindexed (i.e., a fourth tax). Corporate income is taxed over 40 percent at the margin, and consumers end up paying for that, too. Dividends are taxed at 15 percent, and when you die (after 2011) your estate will be taxed at well over 50 percent.

Yes, it helps pay for our social welfare safety net, defend our shores, educate our children and clean up the environment, all of which are laudable goals. But my idea is that we could do a whole lot better if we taxed all income only once. Tax all income at a flat (and fair) tax rate of say 19 percent or 20 percent, with large exemptions for the poor and working poor so they can rise out of poverty. We should also increase the earned-income tax credit in dramatic fashion.

Another lesson of taxation: The incidence of taxation is different from the burden. Placing a tax too high on capital formation puts the burden of taxation on the poor, the consumer and the public sector, as revenues would fall due to a slowing economy and a rise in unemployment.

Capital gains is a voluntary tax in that if you never sell an asset, you would never have to pay the tax. People with assets would just hold on to them, borrow against them and then go out and invest, but in so doing keep all the wealth in the same hands.

During four years of working as HUD secretary with low-income people from Cabrini Green in Chicago to Nickerson Gardens in Watts to Richard Allen in North Philly, among others, I never met anyone in public housing or on welfare or in the food-stamp program who didn't aspire to own a home, have a job, educate their kids and move up the ladder we call the American dream and what is in reality the Asian, Latino, African, European and indeed universal dream.

The genius of entrepreneurial capitalism is that anyone with a good idea can get rich and by doing so benefit our society. Think Gates, Ellison, Jobs, those young guys from Google, Larry Page and Sergey Brin. Yes, Bob Johnson, the creator of BET and Oprah Winfrey have gotten fabulously wealthy, but they're the exception, not the rule, and that's unfortunate for all of us. Rather than redistribution of income, let's democratize capitalism and make access to capital a national goal. Instead of studying poverty, let's study how people get out of poverty and how to help the poor get richer.