earwulf left an interesting comment: "Essentially, an electronic currency linked to unique, human identity allows for efficient, progressive taxation."
An "an electronic currency linked to a human identity" would allow the government to track each and every purchase made by each individual in the country.
Such a system would be a nightmare.
It would involve an invasion of privacy on an epic scale!
The comment is interesting because it brings up an important point.
The challenge of a consumption tax is that such a tax would require that we either remove personal data or we create an intrusive system with the government monitoring all personal transactions.
The FAIR Tax has pitfalls in both directions. If we record personal data with transactions, then we open the door to massive governmental intrusion in our lives.
Removing all connections between individuals and the taxes they pay leads to other levels of abuse. Detaching people from the taxes they pay leads to a system of excessive gamesmanship and abuse.
The FAIR Tax is akin to Taxation without Representation. The businesses that will pay the FAIR tax do not have a direct voice in government. (Businesses have an indirect voice through business owners, but business owners are an unopular minority in America.)
The ideal of Taxation With Representation is realized when the entity paying the tax has a direct vote. The ideal of a representative government is best realized when voters are the direct and primary source of funds for the government.
This Object Tax is built on this principle.
The Object Tax uses the same tried and proven design principles behind the iPhone and modern manufacturing.
The program starts by creating an abstract model of the current income tax.
We make some minor changes to the model so that it can be implemented as an income tax or as a tax administered by a third party such as an account, a financial adviser firm or a bank.
Object technology uses a five dollar word. I apologize for this word.
The Oject Tax encapsulates and extends the current income tax.
Cellular phone encapsulated the functionality of the telephone. Cellphones extend the telephone by making it portable. A smartphone extends the cellphone by adding internet capabilities.
The Object Tax encapsulates the income and extends it by making the tax portable.
Businesses that are invested in the income tax can continue business as normal. People who want to move the tax process from their employer to a third party such as a bank or accountant can do so.
Third party providers are likely to extend the object tax by giving customers advanced budgeting software.
The Object Tax is a method of taxation based on Object Technology. This is the same design behind the iPhone, the Internet, modern manufacturing, etc..
Now, the object tax moves the collection of taxes from the company to a third party. In most cases the third party is a bank.
A common application of the tax is that people will have their entire paycheck deposited into a bank account. They pay their tax when they withdraw money to spend.
The program does not track where you spend your money. The program applies a tax when you withdraw money to spend it.
The Object Tax moves us towards an individualized consumption tax.
The tax avoids the nightmare situation of a government tracking all expenditures because the tax is collected when people withdraw money in preparation for spending.
I contend that this is actually a better time to place a tax than on consumption.
The object tax will draw people into engaging in a budgeting process.
It is when people are drawn into a budgeting process that they begin to make rational decisions about their spending.
The Object Tax uses the same design technique behind the smartphone and other new technologies. Using this technique allows us to move from an income tax toward a progressive-consumption tax with a minimal amount of disruption and intrusion.
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