Wisdom and Taxes


 * Man is not totally evil, but is driven by a lust for power.


 * A Chinese author concurs that concentration of power is a more reliable predictor of war and pestilence than religion, race, history, or type of government.


 * Socrates believed that virtue could be taught. The contrary is that you are habituated to a certain moral standard that is influenced by evil. Every ethical decision is based on partial (incomplete) information and the immediate gratification is always the temptation to do evil.


 * What is legal has nothing to do with what is right.


 * To be popular, you must be wrong. There are no final victories. Life goes on. The nation's youth must be prepared to fight the fight.


 * The movement must be concentrated on perpetually checking the size of government and using it to check the size of focused power. All questions are theological, not scientific.


 * There is an intrinsic distrust that permeates society. The collective wisdom of ancestors guides us for what constitutes right or wrong. We are increasingly as a society being severed from our past. The automobile, the TV set and the computer diminishes the family and the community.


 * Henry Ford realized that his invention (the automobile) destroyed communities.


 * Fight fire with fire means fight limits of freedom by limiting government and monopolies.


 * Society is a contract between the living, the dead and the yet unborn. You can't see the future or the past. It takes a moral imagination to recreate the past and the consequence of your acts and its impact on the future. The young people are not taught history any more, it is propaganda. They are being cut off from their past.


 * Is tradition burning witches? Without tradition you don't get morality. Morale is the confidence an individual (or a group) has in its ability to do something it has not done before. Kirk was against a legalistic definition of tradition. If a reed is rigid and does not bend with the wind, it breaks; if it bends, it will survive.


 * The concept of reform and its necessity is therefore not at odds with tradition. Indeed, those things most remember as "traditional" are those circumstances whereby society coped with reform. July 4th is a tradition today; it was totally novel in 1776.


 * The inevitability of death and taxes is not a reason to ensure that both occur; they don't need our help to come to past but our constant effort to prevent them.

One Tax for the United States - 1USATax
What is novel about the 1USATax (and its scalability and extensibility for all societies) is the control of the size of government by limiting its resources to a fixed ratio of the free exchange of the economy.

These assumptions are made:


 * 1) That government always will become larger until it consumes itself.
 * 2) That the function of government is to preserve freedom of every citizen.
 * 3) Intrinsic to freedom is the enforcement of ownership. Each individual owns their thoughts, ideas, life, pursuit of happiness, beliefs, security and privacy. The contract with government is that every individual agrees to be bound to those laws that are determined by elected representatives that do not violate these fundamental rights.
 * 4) Money and resources cannot be left out of this equation. If money is freedom of speech, then lack of money to speak is tyranny.
 * 5) Innovation occurs five times more often from freedom than it does with central control. Using Las Vegas odds, it is five times more likely a decision by government will be wrong as it will be right. This is also true for the private sector. But how much is risked per roll of the dice is much greater with highly centralized and powerful government (existing with high taxes) than it is by individuals.
 * 6) Individuals should at last have a guarantee that they will not be oppressively taxed. Freedom from Oppressive Taxation requires that the sources of taxes must be controlled such that the imposed limit is the limit of the sum of all taxes that may be imposed, not merely one jurisdiction.
 * 7) Equal protection of the law requires equal taxation. Selective prosecution of the law is unequal enforcement.
 * 8) No condemnation of property without due process and just compensation for public use is subordinate to protection of ownership. Seizure of property under color of law without compensation is taxation. Doing it without uniformity is unequal protection of the law.
 * 9) This implies certain questions and definitions.
 * 10) Imposing a law that forces health care and social security as a right has to have a budget. Programs of entitlement need not be taxes (cf. federal deposit insurance fund vs. social security). Programs of entitlement are still taxes if they are collected under color of law and are not optional.
 * 11) The House Ways and Means Committee is flawed. There is no constraint to taxes, thus there is no constraint to spending.
 * 12) Borrowing is constrained by the future revenue stream if taxes are limited.

What is a tax? How does a government imposed fee differ from a tax? A tax is any amount of resources demanded under color of law to support government. Thus, any fee, if not optional to the citizen, is a tax. A criminal fine, if it is used to support government, is a tax. A document stamp for a deed is a tax. A local option sales tax is obviously a tax. Forfeiture of a bond becomes a tax when it is collected by the justice department. Though it is true that it is an assurance that the charged will show up for trial and that the fine or bond forfeiture is a deterrent to crime and alters the behavior of those so fined, it also becomes a motivator as a source of revenue to government.

So how many taxes should be permitted? In the United States, there are over 100,000 taxes that may be imposed on any citizen, which mostly are local communities power to tax, states' power to tax and the federal government to tax. Among these, the most oppressive is the federal income tax, but it is not the largest source of revenue to government. The sales tax is the largest collector of revenue, but it only imposed on roughly one fifth of the distribution economy. Obviously, from the title, the 1USATax concludes that only one tax may be imposed on any citizen for each trading event.

What about deductions? Who should be excused from a tax? From the Constitution, equal protection of the law would seem to be violated if any individual or entity is excused. But this appears to be impractical, so we have permitted exclusions in the past. However, it can be shown that this is merely because the tax itself if oppressive and too high, or its method is such that the wherewithal to pay it is not present.

The 1USATax asserts that every citizen should be afforded protection from oppressive taxation.

What about government's right to use tax as a method to control evil? For example, doesn't high tax on cigarettes discourage their use? Doesn't government have a right to use high taxation rather than prohibition to discourage those things that the citizens should not do? Upon examination, reliance on funds derived from evil activity to do good is like running a prostitution ring to finance a girl scout troop. Prohibition works more often than it doesn't. We are reminded that liquor prohibition didn't work; but we do have effective laws that prohibit child labor, murder, theft, and other undesirable societal realities. The 1USATax limits all taxes to ten percent of the value traded, regardless of what is traded. This does several things:

It ensures that "the camel does not get its nose under the tent" in that if you allow any exception, control of the taxing authority of government is lost. Government is thus not encouraged to live with evil and tax it, thus rely on its revenues and end up supporting evil. The concept of a tax limit on any legal transaction forces the government to spread out the tax base and avoid "sacred cows" that are not taxed. It limits the incremental amount of tax to a small amount per transaction, making bootlegging unattractive and therefore collection more likely. It makes government live within its average means, which is its management task. It puts pursuit of windfall "sin tax" revenues beyond the permissible methods of government. It is not that the 1USATax favors sin or unhealthy commodity; it doesn't. It merely morally states that the government should not profit by it. It provides other means to control distribution of hazardous substances that are more effective. As is now done with prescription drugs, there are means to control free choices other than oppressive taxation. It provides a tax rate elasticity (from zero to ten percent) to extract more money (shared by all fiscal accounts) from certain products consistent with the above constraints. It imposes the above higher tax rate on all transactions of the product/service, not merely a high amount on the consumer. For a typical four or five level distribution channel, this often approximates the difficult-to-enforce, consumer-only tax system. It exposes any such tax to constant visibility and review of Congress and the public with the strict accountability of how much money is being made by the product throughout the United States. This is considerably more information then is now provided by the current tax system.

What about the argument that excessive use or participation of "evil" products ends up with high costs to the common wealth of citizens? Thus, it is argued, "sin taxes" partially compensate the government for the higher cost of health care (though not covered except when government funds health care). What is wrong to get from those that cause the cost the revenues to defray the expense? The largest user-decided, health care expense to government is AIDS, not tobacco or alcohol, and not only is it not taxed, no one has come up with a scheme to tax it. Why shouldn't this be a "tool" of government? The reasons against it, in addition to the above are: Government should not profit through its inaction against bad habits. Evils are fickle. Newspapers used to be considered evil and many argue they still are when the Crown imposed a tax per page to shut them up. Government should not rely on evil to meet its obligations and imposing a sin tax should not be relied upon as a source of revenue. The 1USATax further stipulates that all fines are distributed to charity within one business day (by all of the citizens, not just the governments definition of charity, by prior declaration) to prevent speed traps, corruption (bail bond bribes, etc.) from flowing to government. Anyone that would steal for you, will steal from you. There is an argument that no one really knows how much government should have to do its job and that it really depends upon the circumstances encountered as to how much taxes should be imposed. Any such limit, therefore, risk the possibility that the citizens will be taxed too little and the government will fail, or too much. It is best determined by trial and error by elected representatives.

The fact is that government's share of the pie always grows to a bloated size until finally it collapses upon itself. The United States has now consigned 40 percent of the entire economy in the form of state, local, and federal taxes, up from 2 percent in 1900. Since the tax load is the largest component of any citizens budget, it also follows that it is responsible for the greatest share of cost. Unfortunately, it can no longer be controlled by change of elected representatives. The special option local sales tax is an excellent example.

Many states came up with a so-called SPLOST (Special Local Option Sales Tax) that had a limited percentage and time that could be added on to the sales tax. Before this was provided, sales tax was (in Georgia, at least) around three to four percent of material consumer sales. Several years later, the sales tax is now 6 to 7 percent and the local options are continually renewed. The local government, enriched by its new tax, prudently sets aside a fund to convince the public what a good job they're doing with it, plus a seed fund to finance the next one. The problem is that there is no like funded opposition, thus there is no check and balance. It is not a fair game, because an individual citizen (or group of citizens) have to use their own money to oppose it, yet they are hopelessly out funded. Eventually, the local government will wear the opposition down and a new boondoggle SPLOST will be ready to replace the last one.

Newspapers, for some odd reason, love taxes. They get on the band wagon and tout that the local option be hyped for "libraries and roads" (but in reality infrastructure for some pet corrupt project) and sell the sales tax add on as a "penny sales tax" even though it is the same as a five percent payroll income tax. The business of fleecing the public with smoke and mirrors succeeds and the ratio of government goes up and the ratio of freedom goes down. Very much like a nuclear plant "going critical" it gets to the point that no one can control it and the economy heads for a melt down.

Our forefathers wanted "check and balance" and wrote it into the Constitution. Alexander de Toqueville warned that sooner or later the public would realize that they could vote themselves the treasury and they had no means to guard against it. We've done worse than that, because the elite control the government and who is elected and we have now a mostly corrupt legislature that is owned by deep pockets that sells indulgences. To control corruption in high places, wisdom tells us, can only be done by eliminating the high places.

That is what the 1USATax does. Instead of permitting the federal government to collect all of the taxes, attach a variety of strings and pork, then redistribute it to the state and local governments, the money is apportioned directly. Thus, the local government gets its money directly, without going through the state or the federal government. Likewise, the same is true for each state.

But, most importantly, the ratio of tax to the economy is controlled. With a five percent average gross receipts tax, the ratio of government (including social security, health care and charity) is 25% of our Gross National Product. This is a reduction of about one third of tax burden.

How can that be done and still keep all government programs in place?

It can't.

Some programs will naturally be eliminated, these are:


 * 1) Gifts to foreign aid (handled by Charity account)
 * 2) Health care and Social Security (handled by Individual Entitlement account)
 * 3) Welfare, other than Social Security (handled by Charity account)
 * 4) Recurring property administrative expense (handled by transfer agents)

The Optimized Rate of Tax

Everyone intuitively can understand that simply raising a price does not necessarily raise the amount of money that a company can make selling a product. For example, the Coca-Cola? company will not make more money pricing Cokes at $5 each. They will make less money, because far, far fewer Cokes will be sold. Coke makes a great effort to price their product so that they make the most money, but they are held in check by competition as well.

Governments do not. They raise taxes until the public threatens to throw them out. So they hide the taxes and splinter the population into opposing groups, then play "divide and conquer" to raise taxes where they can to as much as the public can afford. With the money they receive, they buy off influential opposition with either bogus business, subsidy, or other means to retain power.

This does not raise more money, it's just like a $5 Coke. Instead the economy slows and less tax revenue is collected, even though the rate is higher. To use the extremes to illustrate this point, how would your behavior change if the tax rate was 90 percent of whatever you purchased? You would buy less and demand higher prices (so you could pay the tax).

Now imagine what if the tax were reasonable, (say) five percent? You would spend more and be less concerned about the tax.

A five percent gross receipts tax on the entire economy would produce a twenty-five percent of our Gross National Product in tax revenues. If we gave one percent (the Charity Fund) away (which is equivalent to five percent of GDP), it would leave us very close to the ideal rate of taxation that would produce the most government revenue.