Following is a short introduction to 2020Tax
Income tax is a very narrow base tax and for that reason it has to be at a fairly high average percentage rate to collect enough revenue to meet budgets. High percentage tax rates make it very attractive to try to circumvent them by avoiding or evading the taxation. That in turn requires then a lot of enforcement and audits and the tax system then becomes an easy vehicle for invasion of privacy. Income tax has also become an attractive vehicle for politicians and special interests groups to push their political agendas and to create tax loopholes that give economic or competitive advantage to those who have successfully lobbied for such special tax treatment.
In contrast 2020Tax is an enormously broad based tax and for that reason it is at a very low percentage rate. Low percentage rate taxes only yield small percentages of savings for circumventing them and for avoiding and evading them. The 2020Tax is collected entirely automatically and it requires minimal enforcement for cash transactions only. The 2020Tax can only be avoided or evaded with cash currency transactions for which there are heavy fines and other punishment.
How does 2020Tax function?
1. 2020Tax will replace all taxes at all levels of government ( Federal, State, County and Local) and combine all of them in a simple financial transaction excise tax of 5% or less. To most it sounds impossible that a mere 5% tax can collect enough revenue to replace the tax revenue collected at all levels of government and yet it does exactly that.
2. This exise tax collection process does not require any accounting or keeping of records because it is entirely collected by electronic means through the banking system. Banks will deduct 5% from all deposits made and will credit the bank accounts with the remaining 95% of the deposit. All the electronic equipment and most of the software is already in place at banks today so that this system could be implemented at any time without much expense and preparation.
3. To prevent massive sudden unemployment in tax related jobs the tax will be gradually phased in over a period of 20 years. The tax will be phased in starting with a 0.1% rate the first year and increasing by 0.25% every following year. All the current taxes at all levels of government will be gradually phased out over the same 20 year period by proportionally decreasing the respective tax rates of all the separate taxes at all levels of government matching the total amount collected through this 2020Tax.. The exact rate of 2020Tax needed to replace all those other taxes will be known more precisely after the first year of collecting 0.1% 2020Tax. Simply multiplying the amount collected by 50 will reveal whether the calculation is correct that 5% will indeed collect taxes in excess of the amount needed to replace all the other taxes.
4. With 2020Tax no tax returns will ever have to be prepared or filed. Nobody will ever be subject to audits. Banks will have government supervision (as they have today) and they will be amply rewarded for the tax collection function and the keeping of good records.
5. The only other taxes that will remain are those that do not require accounting and filing of forms such as property taxes (not an excise tax) and additional excise taxes that are levied at the most convenient collection spot with the least cost in accounting, administration and collection such as excise taxes on gasoline at the refinery or at the point of importation or additional excise taxes on electricity use or telephone service the taxes of which can be simply added to the monthly billing.
6. This new system of taxation fulfills the only function any tax system should, namely to collect tax revenue at the least cost and least inconvenience. A tax system should NEVER be used as a manipulative tool with which lobbyists can buy favors from politicians to satisfy the economic and political objectives of the special interests they represent. Those efforts of corruption and collusion with politicians are twisting tax systems around the World into the extremely costly and inconvenient tax mess we are suffering. The United States 17,000 page 9 million word Federal tax code is most likely the grand prize winner for the most complicated, costly and wasteful tax system of them all. The reason for being the grand prize winner is that the United States is the largest economy in the World and so much more can be stolen from it through the lobbying efforts of the Special Interests and the politicians that will .
7. The direct and indirect cost of the US Federal tax alone is estimated at $900 BILLION 2005 dollars. Add to that the direct and indirect cost of collection and administration of the remaining 30,000 taxing authorities (State, County, Local Municipal). Automatic Tax will cost a maximum of $25 billion to collect and administer for all taxes it will replace.
8. There are specific exceptions to the tax. All transactions between bank accounts owned by the same account holder are exempt. All transactions involving financial instrument trading such as international currency trading, bond trading, stocks trading, commodity trading etc. are excluded from this tax. All other cases with merit for tax exemption can be submitted in the form of petitions for tax exemptions to special State administered tax refund offices.