|January 9, 2007||Posted by Staff under Progress Report, The Progress Report|
Tax Reform Debate
The New Slant on Tax Reform Downsizing and Upgrading the IRS Let’s not throw out the baby with the bathwater and attempt to invent a new wheel. We should be trying to cut out the cancer (personal income tax) and improve on extracting the taxes from where the money is produced – business.
1: Repeal the 16th Amendment – taxes on wages and income were never legally instituted as ruled by the U.S. Supreme Court. The 16th was a political accident. A political scheme that backfired on the perpetrators. Nobody won.
2: The economic purpose of Democracy is to insure that the status of all citizens is proportionally raised by the productive gains of the nation. Bill Gates could not have developed Microsoft without the contribution of that elementary school teacher in Nebraska, or Arizona, or ? The international status of the United States of America is, in turn, raised by the productivity of Microsoft.
3: This United States of America must function as an economic unit in an all inclusive national economy. The profits derived from our nations enterprises must be utilized to provide the services of government.
These 3 tenets support the need for a new tax system that simplifies, homogenizes and standardizes the collection of funds from the profits of all business throughout the country. Until or unless a better name is coined, this new tax system shall be known as the NATIONAL BUSINESS PROFITS TAX or NBPT which will provide the following benefits:.
- Eliminates the personal federal income tax.
- Eliminates the federal payroll tax.
- Eliminates the IRA, 401k, 125, 403b, Keough, etc.
- Eliminates the underground economy.
- Eliminates Corporate Welfare Ends Government manipulation
- Reduces unitary tax bite by expanding taxable base (larger pie).
- Employees will no longer have a need to bargain for “benefits”.
- Provides labor total control to spend or save all their income.
- Pension funds become employees total ownership and control.
- Reduces the size of the IRS by $300 billion per year (75%)
- Simplified new tax code reduces business expense 10-15%
- Provides solution to technologically upgrade the IRS for 2000+
- Prevents executive raiding of company coffers before taxes paid.
- Foreign business in U.S. will be taxed as a domestic company.
- Importers will not be able to avoid the NBPT by transhipping.
- Foreign trade negotiations will be unaffected by NBPT.
Some would call this a Value Added Tax or Consumption Tax, which it is. But it is a “Progressive Modified VAT” that eliminates the problems of inequities and distorted measurement of monetary values upon which taxes are based. The NBPT overcomes that problem by simply valuing money-in (investment) and money-out (profits). It is progressive in that it taxes based on ability to pay.
This NBPT will provide for a totally electronic exchange of data and funds input to a computer network custom designed for this application. A workably simple task with this new simplified tax code and the reduced workload. An impossible task under the current tax code/workload.
Then there is the myth that VAT type taxes increase the cost of everything. Reason and logic should prove to anyone that “any and all expense involved in the development, production and delivery of any product or service is ultimately paid by the consumer”. The price of goods will not increase under the NBPT.
There is the justifiable argument (although for the wrong reasons) that the NBPT is not fine-tunable to relieve pricing/taxing of basic essential necessities, such as food, clothing and pharmaceuticals. The demise of our current tax code is directly attributable this “Fine- Tuning”. We must remove this social equalization function from the IRS. These commodities can be made more affordable to needy people by providing financial subsistence payments in the form of rebates or refunds based on claims of purchases.
This National Business Profits Tax contains none of these faults: Flat Tax that isn’t flat. Designed by millionaires for millionaires Sales Tax won’t produce the required amount of revenue even at 25% sales tax on $1.5 trillion sales = $375 billion. VATax subject to manipulations of both government and business in fudging monetary values on products and services.
Complete NBPT text available on request: TrueGrit@cp.duluth.mn.us