How do you end the IRS, completely fund the federal budget, and solve the Social Security/Medicare funding dilemma while allowing virtually all families, individuals and businesses a very generous cost/tax cut?
Find a tax base which is 100 times larger than our current individual and corporate income tax base so you can have the lowest possible rates.
The 2005 Federal Budget with SS and Medicare will be covered by a rate of 0.3% of all transactions in the economy. Then provide an automatic system for immediate collection with no forms since all exemptions and deductions are eliminated.
How about a family earning $60,000, saving and spending the same, then managing their investments by trading $30,000, paying total federal taxes of $450 (including Social Security/Medicare)? Or, take for example, Wal-Mart, which had sales of $212 Billion in 2003 and spent $200 billion doing so, then transacted $100 billion in real estate and capital investment. Wal-Mart would have to pay $1.28 billion in total federal taxes collected automatically vs. the $4 billion they did pay with a large accounting staff to strategize and file the forms? While Wal-Mart would have direct tax savings of $2.7 billion, the reduction in compliance costs and employee payroll taxes is estimated at another 15% or $30 billion. So both individuals and businesses gain substantially.
The government is fully funded, saving an estimated $300 billion in administering the current IRS code, while collecting another $300 billion in taxes lost to evasion.
APT ADDITONAL POSITIVES ATTRIBUTE
1. Total Federal taxes collected as easily as paying a toll with EZ Tag< 2. Eliminates exemptions and deductions thus stopping the use of the tax code to hide special favors. 3. Foreign individuals and businesses will automatically be taxed when their funds are converted into and out of the US Dollar. 4. The underground economy is taxed as cash moves in and out of the financial institutions included wiring services like Western Union. 5. A tax that is naturally, highly progressive without establishing any rules, rebates or bureaucracy. 6. Eliminates an abundance of non-productive, economic “dead weight” associated with the thought, planning and execution surrounding tax compliance.
APT NEGATIVE ATTRIBUTES
1. Relieves the “pain” of taxation thereby fostering political apathy.
2. Those who would be selfish detractors: Tax attorneys, lobbyists, politicians who rely on hidden tax favors, day traders, wealthy foreigners and businesses, drug dealers, and tax evaders.
1. The tax will Cascade through supply chains causing huge multiples and price increases at the retail level. No, APT is proposed as a complete replacement of the current code, therefore, 20+% corporate cost saving will occur at every level of the supply chain. Therefore, to add back a mere 0.3% will still maintain a big net savings to all intermediate suppliers.
2. You cannot reduce the tax burden of individuals and business in a dramatic fashion as is proposed and still pay for all the government needs. Yes you can by dramatically expanding the tax base, recruiting new, large taxable sources thereby spreading the agony very thin.