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Topic: Taxes (Read 718 times) |
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Bass
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Taxes
« on: 2007-08-02 16:18:43 » |
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After thinking some on this over the past week, here's my idea for US tax reform. Perhaps we could spread the infection of this vision(?):
1. Eliminate income tax for anyone under $77,500 a year. That would basically eliminate the bottom 75% from paying any federal income tax. After all, the top 25% pay 83% of all federal income taxes under the current system.
2. Make the tax rate two-tiered at 25% for $77,500 to $400,000 (the 25th percentile to the 99th percentile) and 35% for $400,000+.
3. Remove the long-term capital gains tax, which constitutes double-taxation and primarily hurts . Keep the short-term capital gains tax (but lower it a bit), as a regulatory check against overzealous speculation.
4. Remove the estate tax, which constitutes double taxation.
5. Add a small national sales tax. While this would otherwise be a "regressive" tax, it is not when taken as a whole with the way the income tax is now structured.
6. Drastically cut the size of the federal government.
I can see an elimination/lowering of the corporate income tax, as it is already only a small fraction of total tax revenue. Plus, a national sales tax would partially make up for eliminating/lowering the corporate income tax.
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Hermit
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Re:Taxes
« Reply #1 on: 2007-08-02 21:46:25 » |
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In more than one place on these boards are some suggestions on the following lines. Seemed easiest to lay it out in this form...
A rough draft of The Proposed One Page Transaction Tax Code
1 Tax Implementation
1.1 This bill totally eliminates all current taxes, duties, levies and surcharges. Local, State, Federal. It scraps them. Along with the tax code and any subsidies paid out through the tax system. This bill also eliminates the vastly expensive, horribly inefficient and deservedly hated IRS.
1.2 This bill mandates that the Federal government provide every person, real and judicial, in America or with substantiated dealings with America, with a Government issued wifi enabled "electronic wallet/organizer/phone" (Refer technical annexure) hereafter "electronic wallet", to be distributed via the Post Office. Note, every person in America. Legal, illegal, retirees, infants, companies, churches, millionaires, hobos. It doesn't matter. Everyone gets one.
1.3 This bill mandates that the Federal government blanket the country in WiFi networks or equivalent capability to WiFi networks, which shall be generally available to anyone using a electronic wallet or equivalent device.
1.4 This bill introduces a transaction tax. The initial rate is to be set at 4.5%.
1.5 When transactions occur via the "electronic wallet", the tax is dealt with automatically. When money is withdrawn from or deposited into a bank not by means of an "electronic wallet", the fee will be charged by the banking entity.
1.6 The tax is flat and applies to every transaction of value between entities outside of:
1.6.1 overnight banking at rates below 1%, and;
1.6.2 transfers between family partners (for this purpose people may nominate, by linking wallets, a partner of any sex and may change this linkage at any time, but not more frequently than monthly. This exception is not available to juristic persons). Should, in the opinion of the tax authorities, it be shown that a partnering linkage was established for the primary purposes of avoiding transaction tax, a surcharge of 100% will apply to all taxes in that period in which this occurred, and both parties to that fraud will be barred from entering partner linkages for a period of (1 year times the number of times person has been caught trying this).
1.7 Recipients are responsible for all tax payments except payments by corporate entities or banks to individuals where the payer shall be responsible for applying the tax.
1.8 No transactions of value are excluded from the system (No donations, no investments, no loans, no cheap food, no pocket money, no drug deals, no barter, no counter-trade, no free services or goods, nothing is excluded).
1.9 This bill introduces an "asset squatting tax" which applies to all assets in interest bearing accounts and investments, as well as all interest and fee bearing loans, and any situations where assets are provided for the use of others for any reward including goods or services. This tax is equal to 2 times the tax rate applied as a percentage to the asset. Should the owner of the asset be able to prove (by means of the wallet or otherwise) that they have paid more than that amount in tax, the asset squatting tax would not apply.
1.10 No tax returns need be filed except by those performing transactions not effected by means of the "electronic wallet". All parties to such "off-wallet" transactions have a duty to report such transactions via a system which will issue receipt numbers at a no greater than monthly interval. Unless filed electronically, the tax return filed shall include a fee to cover the cost of capture, and the return shall include sufficient information to produce the same level of transaction detail and assurance as would be present had the wallet been used.
1.11 Failure to report a transaction, or the fallacious reporting of a transaction, shall be an offense punishable by up to 10 years imprisonment.
2 Enforcement Actions
2.1 Accusation
2.1.1 Any one, including members of the tax authority, may accuse anyone else of having failed to pay taxes at anytime. Should the accusation be sustained by an investigation, a reward of 10% of the amount collected - and if it cannot be collected, of the amount that should have been collected, will be paid to the accuser. Should the accusation not be sustained, the accuser shall be fined on an exponential scale based on the number of wrongful accusations made by that accuser, e.g. $10^(Number of incorrect accusations), and the fine paid (after transaction tax is deducted) to the entity incorrectly accused.
2.1.2 The tax authority to be formed is authorised to investigate and form determinations pursuant to this bill.
2.1.3 Investigations and accusations may be bundled at the authority to be's discretion.
2.1.4 Malicious accusations of tax dereliction may be treated as a felony or misdemeanor by the tax authorities.
2.2 Defense
2.2.1 Use of the electronic wallet for all transactions of value, would be a sufficient defense that all taxes have been correctly assessed and no taxes are due and payable.
2.2.2 If the "electroniuc wallet" has not been used, or not used consistently, a system of comparable reliability and auditability may be used to prove that all taxes have been correctly paid.
2.3 Remedy
2.3.1 If taxes are shown not to have been paid on a transaction, a fine of 10^(number of offenses) times the unpaid amount will be due and payable unless the defaulter can prove that taxes to an amount greater than the amount of the default had been paid before the onset of the investigation (e.g. make a deposit of your expected annual tax and then account against that for the year). Should that amount not be available the defaulting individual or the most senior two corporate officers, as determined by the tax authority by evaluating management activity and responsibility, shall be jailed for a number of years based on the size of the default.
2.3.2 Any fault under this bill not specifically addressed shall be regarded as a misdemeanor with a punishment of not more than 5 years jail and 500,000 dollars or both.
3 Limitations
3.1 The government shall be constrained not to spend more money than a determined base year corrected for the official inflation rate.
3.2 Should more money be collected by this tax than anticipated, the rate shall be decreased.
3.2 Should less money be raised by this system than anticipated the rate may be increased but not beyond 5.5%
3.3 Should any other levy, duty, surcharge, tax or collection by other means including obligatory loans be introduced by the Federal government, the enabling legislation for this tax will be repealed.
3.4 Should any other levy, duty, surcharge, tax or collection by other means including obligatory loans be introduced by any other level of government, then wilful payment of any tax monies collected by this tax system to that entity or any entities subordinate to the level introducing such tax shall be a felony punishable by 10 years imprisonment.
4 Release of Data
4.1 Transaction information, whether collected by wallet or otherwise, for any and all elected officials and for all publicly paid staff, at all levels of government (from the president to the school board, from the governor to the dog catcher) shall be open to inspection for their term of office and for 2 years preceding and following such term or service.
4.2 Any recipient of government funds agrees that their transaction information shall be made public for a period of 1 year preceding and one year subsequent to the receipt of federal monies.
4.3 Any other release of data to any entity including federal entities except following a conviction shall be a felony punishable by 10 years imprisonment.
5 Management
5.1 The OMB shall form a new entity, subject to its management, which shall have not more than 5% of the number of employees of the IRS. Should this number ever be exceeded, this bill will be repealed.
5.2 The new entity shall be a reporting and enforcement entity. It will be responsible for drafting a complete administrative code which shall implement this bill. The code and any modifications to it will require approval by congress before it becomes effective.
5.3 A 16 year old should be able to understand the administrative code or it will be returned for reworking.
6 Subsidies
6.1 All payment of subsidies or other payments from the government to any entity outside of foreign aid recipients will be by means of the electronic wallet system.
7 Benefits
7.1 A national wifi infrastructure
7.2 No more tax returns
7.3 A non-distorting tax
7.4 Eliminates most forms of bribery, corruption and fraud
7.5 Ensures taxes are neither avoided nor evaded by making the amounts per transaction trivial, the likelihood of detection high, and the costs of getting caught painful.
7.6 No more IRS
7.7 Automatically scales taxes and payments to match income (i.e. the effect of these taxes is highly progressive)
7.8 The squatting tax prevents tax avoidance by the wealthy
8 Disadvantages
Comment is invited
Hermit
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With or without religion, you would have good people doing good things and evil people doing evil things. But for good people to do evil things, that takes religion. - Steven Weinberg, 1999
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Blunderov
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Re:Taxes
« Reply #2 on: 2007-08-04 02:33:25 » |
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[Blunderov] IMO the Hermit's system is brilliant. Above all it is fair. The rich, who undertake more transactions, will pay more taxes than the poor.
Some thoughts on the subject of tax "avoision".
[SANE Views Vol.7, No.20] Whose Taxes are you Personally Subsidising?
South African New Economics [sane@sane.org.za]
SANE VIEWS
Vol. 7, No. 20, 1 August 2007
WHOSE TAXES ARE YOU PERSONALLY SUBSIDISING?
Margaret Legum
I am told that in Canada South Africans are looked down upon as poor tax payers. Canadians think it is right to pay taxes. Whereas, they think, South Africans think tax is a sort of game in which the taxman is pitted against the citizen, who is perfectly justified in seeking to avoid paying.
If you think the topic of tax is essentially unpleasant, technical or boring consider the following. Africa loses about $100 billion a year in lost tax revenue as a result of legal tax dodging by rich people and corporations, who constitute about 1% of the world’s population: that loss is five times more than we get in aid. Think what could be done with that money in terms of education, health, transport infrastructure and so on. And think how much less we ordinary tax payers might be paying if they paid their full whack.
Tax dodging happens through companies registering in tax havens, where tax is small or non-existent and money flows are allowed to be secret. It is also about multi-national countries mispricing transactions within the company so that ‘profits’ end up where tax is lowest. It is mostly legal and facilitated by the world’s top earning legal companies, with the epicentre in London.
Developing countries as a whole lose some $500 billion in this way. Britain itself loses enough each year to fund all its pensions, abolish student fees and send 0.7% of its GDP to meet the Millennium Development Goals. Tax Us If You Can, published with the London-based New Economics Foundation two years ago, gives details worldwide, and can be consulted at www.taxjustice.net
Accountable government is universally accepted as the key condition for democracy and development. And tax is the nexus between government and citizen. Government must be funded: we do that with taxes. In return we want to see the effect in terms of service delivery. Tax is the price we pay for decent governance. We cannot have one without the other. When that relationship fails we get street violence instead of votes. Tax evasion is a moral crime against society, because it interferes with our essential relationship with government
All that may seem rather high-mindedly obvious. How many people know the extent to which we ordinary citizens subsidise very rich people and corporations, who can avoid paying tax by using perfectly legal mechanisms? They are not treated as criminals or fugitives from justice. They pay a fortune to tax lawyers and accountants, who save them several fortunes by making use of shadowy world of tax havens and transfer pricing.
The international Tax Justice Campaign, set up to create a global network to end this bias to the rich, held its first South African seminar in June, the African Chapter having been launched in Nairobi in January. SARS was not there, though it echoes SARS’ persuading the citizenry that paying tax is the right thing to do.
The trouble is that SARS has to operate within a global competitive market in which giving special tax treatment to foreign investors is thought essential for growth. Every government – indeed even every regional government – competes with every other to offer companies tax and other deals, so that they will create employment in their fiefdom.
Low tax and tax holidays, freedom to register off-shore and to maintain secrecy about accountancy practices are among the demands multinational companies make to encourage their investment. ‘The eventual demise of corporation tax is quite likely’, according to Oxford University’s Business Taxation Centre.
That power to influence governments simply by threatening to leave creates theories that suit rich companies and individuals but have no basis in fact. One of these is that low taxes and inequality of income is good for growth, while high taxes that redistribute income stultify economies.
Research over time shows the reverse to be true. The highest taxed countries – notably the Scandinavians and parts of western Europe – are the most income-equal and also have the most dynamic, stable and innovative economies. Whereas the US, countries that use the American model, have wide income disparity, widening poverty, huge national and individual debt and extremely poor public education, health and other infrastructure.
One government – Norway – is breaking ranks. It has published ‘Closing the Floodgates’ about escaping tax. It supports the Tax Justice Network’s call for the International Accounting Standards Board (IASB) to develop an international Financial Reporting Standard. It would ensure that all governments know where all companies work, where they pay tax and how much, which use tax havens and exactly how trade within companies is priced.
It would make the whole process more transparent and democratic – in theory the objective of the free market. It would also enable us to know more about trade and its effect.
So far the IASB has refused to create that financial reporting standard, preferring to accept the existing American Accounting Standard - which is so slack that even that government is considering changing it.
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Bass
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Re:Taxes
« Reply #3 on: 2007-08-13 13:21:38 » |
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I think the Hermit just completely owned my virian meme 
A brilliant sounding system for sure though. I may ask some questions about it later, but busy, busy right now!
Regards,
Bass
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