Q: Your “10% on everything” tax looks a lot like a purchase tax, so why don’t you just call it that? And why 10%; and not some higher percentage with certain exclusions, such as purchase of a home, which my fiancè and I are planning?
A: Because there are too many non-purchase type transactions encompassed in my “replacement tax”—gifts, charitable contributions, loans, inheritances, trades and swaps, just to name a few, which in my view would lead to tax abuse in the hands of lawyers skillful in the art of “restructuring” one thing for another—a loan as a gift, a trade as a loan, a purchase as a swap, a farm or business inheritance as a long-term lease, and so forth.
When it comes to taxes of any kind, simple is best, and taxing on overall consumption and asset transfers is about as fair as it gets; and paying day-to -day beats the hell out of paying year-to-year, especially when the total tax bite is an aggregate 50% more than now, because 50 million new middle class Americans will be paying “income tax” for the first time.
Why a comprehensive 10%? Because no one will risk 2 to 5 years jail time for a measly 10%! And because any exclusions would inevitably lead to the politically-motivated, obscene 70,000-page tax code that we have today, which costs us $200 billion a year just to administer-all money down a rat hole! Most importantly, 10% gives our various levels of government the $3 trillion plus they need to run things like locally-administered social services, and to start paying down our debt. Uncle Sam should just get out of our way, and try to do something our Constitution gives him a mandate to do—like re-structuring our banking system so we can get on with our normal lives. We don't want another trillion dollars of Socialist hand-outs, nor much less a nationalized mediocre medical system.
Our local doctors are doing just fine, and can do even better under a local administration that provides for a 100 buck house call for a 10 buck tax bite. This is the medical care we want, and we'll pay for it right here in "Hicksville, USA".
We are, and always have been, perfectly capable of deciding what our kids are taught; what buildings, roads, and bridges should be built; what our farmers plant and reap; what cars we drive; and how we take care of our sick, disabled, or temporarily unemployed townsfolks.
Bottom line, Sam, you stick to what we hired you to do in 1787-protect us from foreign and domestic enemies, and provide us with a working bank system and a return to States' Rights. We'll take it from there-just move over and give us our turn at bat. You'll be surprised by the Mickey Mantle's and Ted Williams' we have on deck.
Q: Why does your 10% tax include stock and bond transactions? I’ve barely survived the financial meltdown, and this would be a killer for day-trading and foreign investments.
A: You’re right, Eric. My proposed 2-page “idiot-proof” tax code does not distinguish between a loaf of bread and a share of stock, and day-trading is “toast”. But long-term investors make out like bandits because there is no tax on investment income, capital gains, or business profits, from G.E. to “mom and pop”.
Tell your Wall Street buddies that we are on the threshold of the greatest American investment boom since “Wild West” days, and tell your foreign buddies that if they want a piece of the American pie, they’ll have to pay 10% up front for the privilege.
Eric, you must be a bright guy or you wouldn’t have survived the meltdown, and I’m dismayed that you haven’t figured this out on your own. The 10% transaction tax is the same for everything and everybody—no exceptions. No tax scheme could be more “American”. If, as you claim, it is unfair, then it is equally unfair for all of us, not the "social engineering" nightmare we now have, which screws some folks and not others, depending on the ability to afford a $400 per hour tax attorney or CPA.
The result of my proposals is that we can pay off our National Debt in the next 10 years with the built-in surplus; and my 8 grandkids will be off the hook for financial excesses the past 50 years, including the recent Wall Street bailouts and economic stimulus packages.
What my vision means in a global economy is that the dollar will to rise to the level of 2 Euros, 1 pound sterling, and 200 yen. American dollar buying power will dwarf every other, as it did after WWII, keeping our internal inflation at 2% or less.
Flo, a 70-year-old retired widow from Cape Coral Florida asks:
Q: Does the “10% on everything” tax replace my $7,000 property tax and 7% sales tax? If so, how can my nearly bankrupt town pay for everything, including my medical bills? And what about my Social Security checks?
A: Yes, Flo, everything is paid for by Cape Coral’s 40% share, and Lee County’s 20% share of the daily tax bite, with Florida’s 10% share as a backup for hurricane emergencies, and to pay down State bonds after covering their admin costs.
Uncle Sam’s 30% share—about $1 trillion, including a billion a day in net National Lottery proceeds to pay down debt, is ample when there are no State and local drains for stuff our Federal Uncle has no business being in in the first place--our schools; our parks; our arts; our buildings; our roads, bridges, and tunnels; our windmills and solar panels; our TV and radio programs; and our social services. These matters belong to us, not to him.
Uncle Sam is charged with taking care of our country as a whole, while we are charged with taking care of our neighbors and townspeople: You know, that revolutionary idea our Forefathers invented when we kicked out the Brits in 1783? But we need $3 trillion per year to make it happen, and not the $2 trillion we now get at all levels of government from taxes, tolls, duties, fees-ad infinitum it seems. They would all be gone with the wind, like the Old South and Ellis Island, now that all the slaves, and half the 20 million illegals, have been freed or repatriated.
With respect to your monthly Social Security check, your account will be re-valued back to 1936, as will your departed husband’s account. The amounts you, he and your employers paid in for the past 73 years, less the checks and Medicare co-payments you both received the past few years, will be deposited tax-free, with accumulated interest at whatever 30-year T-Bond quarterly rate was in effect during these periods, including financially clueless Jimmy Carter's 18% rate.
Flo, it will be quite a pot full, but don’t go "ape". Try to live for a while off your monthly interest check before drawing out principal. What you leave behind will go to your kids when you’re reunited with your husband. In the meantime, your medical needs will be monitored by your local Councilman, who is being paid 300 grand a year to make sure that you and your neighbors are cared for properly.
Gino, the owner of an Italian restaurant in Chicago, asks:
Q: How do you figure that any small businessman like me can afford to pay the 12 buck/25 grand minimum wage, plus 10% labor tax and 10% pension contribution for a dishwasher, floor sweeper, or burger-flipper? Doesn’t your “trickle-up” theory put the burden on the backs of the little guys like me? These are hard times, and my business is down 40%.
A: Gino, you have to look at the short- and medium-term savings you get, such as no Chicago or Cook County license fees or taxes; no worker insurance; no property tax on that building you own; no tax on your restaurant profits; no tax on your investments; no duties on your imported food from Italy; cheap gas for your catering trucks; and cheap produce prices from bumper farm crops planted by farmers free of mandates and subsidies, and clever enough to supply half the world with cheap food.
Very soon, I think you’ll find that these savings will balance out your increased minimum labor costs, and that your employees will be able to afford a home of their own. This comprehensive tax-pension- trickle-up plan is admittedly a delicate Mozart concerto, and a national leap of faith, but this is the stuff we Americans are made of.
All you and I have ever asked for is a level playing field, without “Big Brother’s” Socialist rules of the game. We didn't hire Uncle Sam for anything but protection from enemies, and as referee of internal disparities. Somehow, during and after the Civil War, this concept was abandoned, and it now falls to us to re-establish it with 21st Century solutions, the cornerstone of which is State and Local rule based upon tax revenue sharing--40% town, 20% county, 10% State, and 30% Federal--roughly $2 trillion to us, and $1 trillion to Uncle Sam, with us collecting all the money day-by-day, and dishing it out to Uncle Sam, not the other way around.
Revolutionary? I suppose it is, but we Americans have always been revolutionaries--innovators; visionaries; frontiersmen; gamblers; jazzmen; and the saviors of European Civilization.