What is Worng with Simplisity? A simple solution to ACA

What is wrong with simplicity?

The educated person may tell you how to run the world. The common person may tell you how the world works. In this statement there is arrogance on both sides.  The educated thinking that they know the best way to accomplish the goals of running a nation. And the arrogance of the common person that lives under the rules set by the educated. However, ignores them for convenience and stubbornness. “I will continue to do what has worked for me”. I am sure you have seen this process at work. When a supervisor or outside contractor comes in and change a process at work. And the targets of the change set about to work against the system proposed. And most of the time, the common person does know what the hell they are doing.

This process was repeated on a National level as the Democratic party rolled out a comprehensive health care initiative. With even the leading proponents admitting they didn’t know what was in it. This lead to the common person thinking on this in terms of common sense. How can a plan that takes into account thousands of variables be made into a one size fits all model? The simple answer is it cannot.  Common sense also leads us to believe that you cannot control cost without connecting the consumer to the price of the product.

Health insurance has become a health maintenance plan in recent years. That has lead to the escalation of prices as the average consumer disconnected the plans overall price with services provided. If it was covered under your plan, you did not ask how much this test cost, or if it is necessary. Same with prescriptions. The only thing the consumer asked was how much is my copay. We forget that health care also has a sales component attached to it. This may shock some of you but, people like to make money, even doctors and hospitals. Not all test are necessary, and there could be cheaper alternatives in prescriptions. How was a comprehensive National Health Care going to solve this? It can’t without exercising the collective will of the government. That means everyone won't get what they want.

The simple solution I would have proposed is this. all citizen would be required to have a plan, and all American citizens would have the opportunity to buy a simple Health insurance plan, provided by government. You could opt out of this plan if you so choose. However, all citizen would have to be covered by a plan. This plan would be a simple Health insurance where the first $1000  is out of pocket unless qualified for medicaid or medicare. From there it would be 50/50 coverage until you have reached $10,000.00 then like all catastrophic plans it would cover the rest. Your deductibles would reset every year, just like a normal plan. However, this would be a baseline government plan, that you could buy regardless of pre-existing conditions. The only caveat to this is, if you did not have a plan before use of this insurance, you would be fined based on rate and time for the lapse in coverage. So, if you went three years prior to event, you would be fined and charged for them three years of non coverage. This may not be enforceable in a lot of cases where the person has no assets. However, it would encourage everyone to buy and maintain a plan while it is reasonable.  

Then a plans could be set up more like insurance of our parents and grandparents. That is a plan based on desired coverage, with HSA(health saving accounts) set up early in life. These HSA could use pre tax funds, and set up at time of birth if desired. The marketplace will probably develop around the concept similar to Whole life. In which, a portion of payment would automatically be placed in your HSA. Of course, the larger your HSA the larger your deductible and the cheaper your plan could become. To encourage competition, you can transfer at any time specified contractually into any similar plan with the same or higher deductibles without pre screening or pre-existing coverage limitations. However, if you choose to go down in deductibles or increase coverage then you can be pre screened for pre-existing coverages. Moreover, your coverage can not be taken away for any reason except, a reasonable time frame for non-payment. The HSA would have no ceiling, and monies left can be passed on after death. Theoretically, a long term contributor to a HSA could be self insured and provide for their own long term care. This would also mean the long term reduced need for Medicare. This could be created for the individual by creating a cradle to grave policy plan at an early age. Also, employer coverage will go away. This creates a more stable insurance that does not precipitate the need to remain working for the same employer all your life. The HSA could also be used to maintain your insurance in times of financial duress.

Granted, this not an automatic fix. It would take a few years until the any real savings  were seen from this system. However, it would be a quicker return then the single payer system we are looking at now.

It will take some educated people to work out the details, which comes to the wisdom part of the statement mention in the beginning of this article. The plan does not have to be complex and confusing to the common man. All complicating the issue does is create distrust and confusion.

If your strategy is to wait for your opponent to fail. Then you have no strategy

     Recently, I tweeted. “If your strategy is to wait for your opponent to fail. Then you have no strategy.”

    I tweeted this because, I hear the thinking of the talking heads. “Let the Affordable Care Act fail on it’s own. The Democrats own it.” I am afraid we may be losing that luxury.

    I hate the ACA as much as the next person. It is a substantial problem to deal with.  It will probably be the last straw that breaks the middle class. However, this is a divisive distraction meant to draw us from the true nature of our peril.  Go to Wikipedia, or any dictionary, and read up on the events leading to the October Revolution. These event were a little more drastic than our current situation. These event were mass unemployment, rapid rise in cost of living, and a huge national debt. Granted, our poor have been largely pacified, through far reaching government programs designed make their poverty comfortable. The Czars did not have that. However, how comfortable is the poor going to be with the competition of the middle class stressing the social safety net? Unremarkably, you can find the same conditions leading up to the rise of Adolph Hitler. Therefore, we are in a dangerous time and must guard against tyrants, while watching for visionaries.  

    I also favorited two tweets from Garry Kasparov @Kasparov63 “Sorry, but I'm from a place where everything was "shared equally" and it wasn't as nice as some of you seem to think it would be.”

Ciarán ‏@MrrBrightsidee  @Kasparov63 “Maybe the reason for that was the fact that it was never actually 'shared equally.’”

Garry Kasparov ‏@Kasparov63 @MrrBrightsidee “And that's exactly the message our Communist leaders kept repeating until the very end. Just share better, or else!”

    What good is the ACA failing if the creators are still in power. In the beginning, they may be a bit more diplomatic. “Share better. What other option do you have?”

    I do not see conspiracy theories everywhere I look. I just see the usual seven deadly sins leading us down the path of our own destruction.  Arrogance, envy, lust, sloth, greed, despair, and gluttony. Sprinkled with a heavy dose of incompetence, from both parties. All these things unchecked, lead to a collapse of society that inevitably produces a long line of tyrants to rule over you.

    I admit, it is not all your fault. The public at large has also fallen into these deadly habits, and have elected leaders to fulfill these needs.

This is what I hope the Tea Party is. The awakening of the people to the sins of their past. Yes, there are going to be those that try to control this awakening. After all. The Republican Party used it first, and then discarded it hoping it would go back to sleep. So realize what you have or get out of the way for someone who does. The Tea Party is just a name, and the people under it’s banner are wide awake and not ready for sleep. Do you want to destroy this banner just to have them take up the Libertarian one. I believe they will welcome us.

What is needed is a set of clear concise long term goals. Not reactive defensive posturing, while trying desperately to grow the base by appeasing people that will abandon you when they get what they want. The Tea Party is just a loose group of people fed up with the political pandering of both parties. Neither one is really solving any problems, just jockeying for positions on who holds the reigns of the bureaucracy. Meanwhile, we are getting crushed by stagnant growth and government spending.  Then you belittle Cruz, Lee, and Rand Paul and others as the panderers pulling off cheap political stunts. Right now they are the only threads holding us to the Republicans.

President Obama promised hope and change. So far he has lived up to the promise. He gave the poor false hope, and brought cronyism out of the shadows, and into the light of day. He unbridled the bureaucracies and placed the bridles on the private sector. He is actively reducing everyone workweek by decreasing the number of hours you have to work per week. Unless, you actually want to work to provide for your family. Then your hours may have increased. Therefore, we are tired of the excuses. You control one house, that is a small blessing. Otherwise, all this would be meaningless. You have provided a small speedbump. However, you could have been a barricade. Not the cheap movable types used by the Park Service. But the solid immovable kind that stood in the way of his agenda. That is what we sent you to do in 2010. However, your vainglory leads you to believe the media when they told you would just appear as obstructionist. Well there is very little to stand in the way of the ACA. So, we are left with the hope for a quick implosion of this debacle. It is our only hope to salvage what is left of our healthcare system and the middle class. A long protracted demise of the ACA only deepens the damage.

The ACA is only one of our problems. It can be repaired. It is not too late to save the middle class. However, it is going to take discipline and resolve to save it. We need real short and long term goals to fix the overspending, the broken tax code, the abuse of power, and our broken healthcare system. Not this, “let your opponent fail.” They already have, you just can’t see it. You are too busy listening to those that want it to work.

If you like the IRS, You can keep it.

If You Like The IRS, You Can Keep IT.

    Earlier this week I tweeted. “I can give you hundreds of reasons the CUT Tax don’t work. I also can give you 75,000 pages why the current system don’t work.”

    Thinking about this all week I have come up with a solution that will remove a lot of the reasons the CUT Tax does not work. For this, I have to credit President Obama.

    I have been thinking of this in terms of winner take all. We have been conditioned by years of political process to accept this as the way things were done. The conventional wisdom of politics is that the winner gets what they want and the loser(s) will get a large earmark for their state or district. I am trying to change that, at least in this process.

    In my form of taxation there would be winners and losers, and a few companies that would be decimated if a work around was not found for this tax. Like all ideologues, I accepted  this in my mind as “the ends justifies the means.” If, 99% of the population benefits overall, than less than 1% collateral damage seemed acceptable. It is not.

    Since, some of you that have came upon this blog and are unfamiliar with the CUT Tax. I will try to make a brief explanation. The Currency Use Tax (CUT) is basically a gross revenue tax. This tax form is vilified by many economist due to it’s inflexibility and the pyramiding of embedded taxes. Although, I understand their reasons I do not concur with their reasoning. For clarification on this, view my “In Defense of Gross Receipts Taxation” blog. Now, back to the point. The CUT Tax is a one time tax on all new revenue deposited into any financial institution. As an example: If you deposited $100.00 and the CUT Tax was 3.75%. $3.75 would be withheld at deposit leaving $96.25 left in you bank account. No annual filing required, no government interaction, and no IRS having access to your financial information. All this is handled at the transactional level with no direct government oversight. This would replace all your withholding from your paycheck. Although, there are better details in the book, I am just giving the most basic information.

    The biggest losers in my form of taxation are businesses that operate on a profit percentages based on gross that falls below the CUT Tax rate. Mostly very high volume industries, and speculators. There are some large stock speculators that operate on a one cent variation in stock prices. Although, they may net a Million dollars a day, they may have grossed a hundred million or more dollars a day. Therefore, a 3% tax on gross would make their business model worthless. This was one reason for the work around on interest in the book. Because, the tax rate could exceed the current interest paid. This created a hole in my tax plan that you could almost sink Wall Street in.

    I believe that my tax model will benefit 95% of businesses and individuals. Yes, some may have a higher tax liability. However, their compliance cost and convenience cost may offset this increased tax burden, and possibly increase their profit margins. That is why I am comfortable that in the arena of ideas this tax will win out.

    Now, to the reason I credit President Obama with this solution to my worries over the problems with The CUT Tax. Is this. “If you like the IRS. You can keep your current income tax code.”  Now, I said this not to be facetious. Well... maybe a little. This has lead to my free market solution.

Instead of an all or nothing approach to the replacement of the Federal Income Tax Code. How about a five year test run? Before the fiscal year starts an organization will decide on how they want their taxes handled in the upcoming year. Or, opt into a plan if you will. I will even give the IRS plan the benefit of the default option. Every year they will decide which plan they choose during this open enrollment period. Under the IRS plan if the company chooses this option they and their employees will be processed like before. With the current rules of withholding and filing.

    During the test run the financial institutions method of collection would be bypassed and all those that select The CUT Tax option would be required to file and pay quarterly on gross income. the company would also withhold for the employee’s tax. This would be paid with the employers quarterly filing. I am sorry employees will be not be able to select an option at this particular time. It will be determined by employer. The reason for this is to prevent business from choosing one option, then selecting another for their own salary or bonuses.  This would prevent laundering of corporate profit through the cheaper CUT Tax. I also realize that the initial tax percentage on gross would be higher than normal due to a lack of uniformity at the beginning. Because of this dynamic, the percentage is above my level of math and economics for me to figure. Therefore I am unable to give a close approximation. I will have to leave this up to economist and hope for their best estimate. I may be able to give a static number that is close, but not a dynamic number. Too many variables, and Calculus was not my best subject. However, I feel this number will start higher than needed, then fall through the course of the five years.

    Also, there may be a little confusion with individual filing. That being if one member of the household works for a company enrolled in The CUT Tax, and the other based on income tax, there may have to be some financial gymnastics performed for the fair collection on both taxes. However, I have faith in a government that can design a functional website that can handle 450 million health care users. Therefore, how hard could prorating a few million joint returns be. My simple answer is this. A person that is on the CUT Tax can not be counted as dependant. If that status changes through the year. Than the Income Tax and deductions are prorated for the portion of the year under the Income tax rate. Likewise for EITC figuring.

    Near the end of the five year competition, the final decision could be made. That decision could have several outcomes. One may be the addition of a few more years of further study. A second may be the failure of the CUT Tax. Or the other option may be the continuing forward with the CUT Tax with maybe a few companies grandfathered into the Income Tax Code because they would not exist any other way. If this was the case then no existing company or new company after that would be able to choose the Income tax method unless they were grandfathered in. At this point individuals would become part of The CUT Tax.

    In a way I made an empty promise to you about keeping the form of tax you choose. I left that up to the employer. Since, the employer has the job, it is not yours. They have made the decision for you. Kind of like if your employer paid for your health insurance but didn’t keep it. It wasn’t your plan to begin with. Therefore, like the President, technically, I did not lie.  

One of the reasons, that this looks like a good solution to me is that the IRS will still be there to audit and pursue previous years tax policies for at least five years after any implementation. This five year plan could act as a transition period for the CUT Tax.  

President Obama may not tell you what his end goal is, But mine, is the removal of one institution of control over us. THE IRS.

#TheCUTTax

   

   

In defense of Gross Reciepts Taxation

    The Cut Tax (currency use tax) is based on a known tax structure called a Gross receipts tax. Many economist call this tax indefensible. This was the case from an article I have read on the Economist web site by Andrew Chamberlain.  The Economist case against gross receipts taxes.  (http://taxfoundation.org/blog/economists-case-against-gross-receipts-taxes.

    I was well aware of the tax pyramid effect when I wrote this form of taxation. I contend that all forms of taxation lead to tax pyramiding. Therefore, if the business is able to deduct the cost of acquisition off of the final sale price. That did not magically make any imbedded tax go away, It just turned that tax into an expense that was added to the sale of the finished item. Then in turn that producer will try to price the finished item to receive their after tax profit margin desired. Therefore, if the item goes through another process. This magical cycle is repeated. Thus, a renamed tax pyramid, can be called the expense pyramid. To deny this, is to call the most common denominator, the laborer ignorant of their own tax liability. I will contend that many do not consciously operate on the awareness of their tax liability. However, they do know how much they need and want to do the labor. This intellectually ignorant argument is just a gimmick  to hide the true tax on the middle class by trying to shield corporations from taxes. Being a middle class hourly employee, I can not  manipulate my books or offset income to shield my profits from taxation. I am stuck paying three or more times the average tax efficiency base. I establish this by a simple equation. Divide GDP 65.978 T(trillion) into Gross tax receipts. 2.45 T and you get .0377. That means the average tax cost on all currency is under four cents per dollar. In the income tax system, being lower middle class my tax rate should be close to 3.8%. It isn’t. I also understand businesses don't pay taxes they just collect them.

Therefore, I would be happy to pay a low overall rate on gross earnings, in exchange for the over inflated retail price you say this form of taxation will create. The only problems I see with GRT is enforcement issues and exclusionary manipulations. I do not wish to stick it to the rich or companies, I just want a tax where the burden is shared equally. In a team of horses, the strongest horse does not expend more effort, it just produces more work for the same amount of effort. This may not be fair it is just a fact.

This is the shorter sample of The CUT Tax. A long blog but a good representation of the book.

I am working on rearranging the layout of the book so that I can keep a usable sample, that will give you the basic information and then remain compliant if I choose go Kindle Select.

The CUT Tax Sample

A look at the Currency Use Tax as an alternative to the Income Tax Code

By Jeffrey P Schaben

September 13, 2013

http://www.amazon.com/The-CUT-Tax-Jeffrey-Schaben-ebook/dp/B00F74SVB4/ref=sr_1_1?s=digital-text&ie=UTF8&qid=1381961976&sr=1-1&keywords=the+cut+tax

What is the Currency Use Tax?

    “In fact, the best thing we could do on taxes for all Americans is to simplify the individual tax code. This will be a tough job, but members of both parties have expressed an interest in doing this, and I am prepared to join them.”

Barack Obama

“What I am proposing can not be any simpler”

Jeffrey Schaben

This chapter will be a quick overview and each section will be looked at in detail in the other chapters. The CUT Tax (Currency Use Tax) will be a flat one-time tax taken on any new deposits  made from a non-linked account. So if you deposited $100 into any financial institution the tax will be withheld. Approximately $2 to $4 will be debited from your account to be held in a collection account as a portion of your tax. The tax will be distributed to the federal government based on specific time frame. The chain of custody of the money and banking fees will be handled in a later chapter. This transaction will happen regardless of source of income or revenue (wage, sales, selling stock, gifts, or even refunds). There will be a limited few transactions that will be free of this tax, primarily government payments like Social Security could be included, money into tightly defined escrow accounts, transfers from linked accounts, return of principal, and money deposited by government agencies.

    My first thought on the creation of this replacement for the income tax was an idea of a Gross Revenue Tax (GRT). This idea on what it should be partially came from of the idea of biblical tithing. I wondered what percentage would be necessary to fully fund the government if the form of a tithe was instituted. A tithe refers to a tenth part or 10% and is collected on first fruits, which I believe means gross revenue; many would argue it means after expenses or on profit. Regardless, I will use gross for the tax to remove the need for filing. Considering how to collect the tax without filing led to the idea of an automatic deduction at the financial institution.

What percentage did I come up with? After looking at everything and doing some mental math based on estimates, I first determined this percentage to be around 3.8%. These estimates were obtained by looking at different companies’ annual reports, volume on the stock market, and a few major retailers’ gross revenues, then averaging the results across different industries. This was to get an idea of the annual cash-flow within the United States. Companies would also be able to bring back money from overseas branches that are hard to quantify in my math, that and inclusion of non-profits could bring this percentage down. I realized these were additional areas of potential revenue that I overlooked in the first calculation. I think the final percentage could be closer to 2%.  Of course, this was done on spitball math with no real in-depth comprehensive research, more of a baseline of averages that I figured. You can also get close to the 3.8% number using Gross Domestic Product (GDP) figures, retail sales, stock market averages, and other leading economic indicators, providing I am reading them right. Therefore, if I am wrong, the real percentage would be higher and that may affect the viability of this tax. However, I will use 3% as a baseline example throughout this essay to commemorate the first Income tax rate of 3% on income above $800 established in 1861. This was signed into law by President Abraham Lincoln. Although this tax was repealed in 1862, and was never enforced. This was because there were no enforcement mechanisms. (http://www.ask.com/wiki/Revenue_Act_of_1861)

   

One of the reasons why the name changed from Gross Revenue Tax (GRT) to the Currency Use Tax (CUT Tax) was that the Gross Revenue Tax sounds like a tax only on business. Whereas, a Currency Use Tax does not exclude anyone. Moreover, the GRT is used by the state of Delaware, and a few other states. This tax is targeted at specific organizations. And is done by filing a state income tax. The Financial Activities Tax (FAT)  was another possibility. However, that may have been confused with the FAT tax proposed on junk food. A Currency Use Tax sounded more neutral. Personally, I like the concept of usage taxes over an arbitrary system based on self-reporting. But, it technically is not a use tax since it is taxed on acquisition instead of use. However, so is the Road Use tax based on the amount of fuel you buy, not on amount of roads you use. So it is based on acquisition too. Your tax will be based on amount of money you acquired, so the more money you acquire the more use tax you will pay.

You can easily call this a use tax because the government is responsible for the overall management of our currency, from its strength (purchasing power), ensuring its security (i.e. controlling counterfeiting, and Federal Deposit Insurance), controlling fraud, and regulating banking. The government should be able to extract a user fee as a cost of creating and managing a secure form of barter accepted around the globe. Since the fee would be fixed for everyone it is logically fair in the fact that the more currency you acquire the higher your total tax. Furthermore, the CUT Tax  revenue could be used to secure the federal budget since the overall stability of the currency relies on the stability of all aspects of the government.  Therefore, providing sufficient funding for all of the government is the within justification of using these funds.

   

The CUT Tax would affect anyone who either banks on US soil, draws an income or does business in the US; citizenship is not a requirement for this tax. The only requirement is to conduct financial activity in the United States and it’s territories. The CUT Tax, unlike a sales tax, will not have any exemptions to the general public. Most sales taxes have exemptions for businesses and organizations that buy goods and services that are part of the daily operation of the organization. The CUT Tax does not differentiate between producer or consumer of products, it only collects tax on the new gross revenues produced. These tax exemptions will not be observed.

    I was looking for a tax that would be automatic and thus hard to evade. In doing so, there would be no need to file, and if the rate stays low, it would not harm lower class citizens. If there is no need to file, we do not need a huge bureaucracy to manage it. The best part of this system is that the Federal Government does not need to gather information on private citizens or private business. It can be managed blind by the financial institutions, with only the employees of the financial institutions having personal information on the account holder. This would allow the government to view the raw numbers without the need to give out account information on individuals or groups. This system could not have been effectively used when the 16th Amendment that allowed an income tax was ratified in 1913, and probably would only be practical in the past two decades. Now I would expect that 99% (based on total currency not on volume of transactions) of all legal transactions do not involve actual cash. That would make this system practical.

    Many people are wondering about this form of taxation on people without a financial account. Unless you only receive cash, you would still have a tax liability for cashing checks. The businesses that cash checks will have to pay this tax when depositing the checks in their bank account. Therefore, they will recover this tax in their check cashing fees. You may say that makes this tax a higher burden on the poor, and I will agree with you. That is, if they choose to use these services instead of traditional banking services, they could have higher fees. No tax can stop the exploitation of the poor. It happens now with tax refund loans offered on tax returns. However, in the free market, some businesses may waive part or all of this fee to encourage shopping in their facility. Then there is always the fear of people going to a cash only system, and I will address this issue in Chapter 4.

    Transfers between linked accounts would be tax free. By linked accounts, I mean accounts that share the same identity. Your checking would be linked to your savings, retirement, or any other account you register with your financial institutions. This can be easily verified through social security number, or a Federal Tax Id number.  

Identity theft is a growing concern and affected about 940,000 actual filers and a possible 1.5 million undetected (fraudulent filing with IRS) people in the 2011 filing period (Lederman, Huffington Post, 2012). http://www.huffingtonpost.com/2012/08/02/irs-identity-theft_n_1733905.html

This system would close the filing part of tax collection and thus eliminate one source of the threat from criminals. Since the IRS would not need information on every individual and company in the US, this would eliminate a lot of paperwork and databases that contains sensitive information. The only reason the IRS, or any branch of government, would need to look at the information of a private citizens or private organizations would be to investigate fraud or other criminal activities, and there is a well established system for the obtaining of a warrant from a judge that has been used by law enforcement for years. Therefore, the government does not really need this information (voluntarily) given to them.

I have excluded principle from the CUT Tax for various reasons. The first reason would be that this money is not new revenue. In a sense, this money has already had the tax collected on it. I know using this argument will open up the concept that all money used in all investing has been taxed once. However, to do this you would have to reinstitute filing to determine capital gains. Most interest bearing accounts collect the interest on a particular day of the month and can easily be identified as new revenue and the CUT Tax can be collected at that time. This system can also be easily applied to credit instruments such as home mortgages, personal and business loans. However, there may have to be special accounts setup for individuals that loan money to other individuals for the proper handling of the CUT Tax. This will not be the case in an owner-financed deal since the equity collected would then be assessed with the interest as the payments are made.

Currency has two primary uses. The first is the buying of commodities. The second is the lending of money. I include wages in the commodity category because time and talent is an individual's most important commodity. Whether it is the buying of your time for labor, the use of your mind or any particular talent the individual is offering. Even currency itself is a commodity. That function is only used by a small percentage of people; like George Soros, bond traders, or hedge fund managers. That leads to the second but most primary reason that I have excluded principle: the interest rates are too low, and making the principle subject to the CUT Tax would cause a collapse in long-term bond issues and mortgages. Most home mortgages would be close to junk bond status because the interest collected may not cover the CUT Tax, which would mean anyone holding these issues would be losing money with every payment made. Many would want to shed these investments and we would have a small repeat of the 2008 mortgage meltdown. On the stock market, I do not see this violent of a reaction. Of course, there could be a correction that would precede the transition between the two tax systems. However, it would be a more measured response, and it would probably happen months ahead of the actual change over. Moreover, most collapsing prices would be due to profit taking, or other tax advantage situations prior to transition. Thus only a temporary situation.

   

One of the biggest controversies in this plan will be the elimination of tax exempt status to all non-profit entities (unfortunately, even charities). I will cover my reasoning in depth in another chapter. The one thing I will say now about it is that it will give these organizations back their full first amendment rights, and if this affects campaign finance rules, then I guess congress will have to come up with a new set of laws. This will mean that all of their campaign funds will be taxes. Therefore, they can join us in paying their fair share of taxes. Possibly, if they are helping to pull the wagon, they may be too busy or may not want to keep throwing more things into the wagon.

The one page tax document

“The tax code is very inefficient. Both the personal tax code and the corporate tax code. By closing loopholes and lowering the rates, you could increase the efficiency of the tax code and create more incentives for people to invest.”

Ben Bernanke

This would be the approximate wording of the Currency Use Tax Law:

    The Tax rate shall be accessed x% of the gross revenue of all new revenues deposited into an account held at a U.S. financial institution. The tax rate shall be determined as thus: X% = Total dollars spent in the approved and signed Federal Budget divided by projected Gross Domestic Revenue, subtracting any approved bond issues, times 110% if the Nation Debt exceeds 300% of gross revenue to the Treasury from the previous FY(fiscal year). The multiplier reduces to 105% if debt is under 300% and falls to 100% if there is no National Debt or a surplus. If no approved federal budget is in effect, the rate will adjust every quarter to meet current revenue demands of 110% of spending. Quarterly adjustment cannot exceed 0.25% with a maximum/minimum of a 1% year over year.

    Exemptions shall include Social Security and other listed direct payments from Federal Government to individuals (possibly including military hazard pay). All official federal, state, and local government accounts are exempt from this tax.  Any funds deposited or transferred into these government accounts will not trigger the CUT Tax.  All return of principal is not considered new revenue and thus excluded from this tax, only interest, fees, and penalties are subject to the CUT Tax.

    Qualification of tax includes all entities who do business within the United States and it’s territories and have an account with an American financial institution operating within the United States and it’s territories, regardless of account holder’s citizenship or status, whether corporate or individual.

    The linking of accounts for transfers between accounts of individuals or organizations who share the same legal identity. This linkage allows the transfer of existing funds between accounts without further tax liability. Only new revenue is counted as a taxable event.

    On the collection procedures. The financial Institutions would be the primary collector of the CUT Tax.  The institutions would exercise the tax after the initial deposit of new revenues into an account. This tax would be deposited into an escrow account until the first business day of the month.  Upon transferring the money into the United States Treasury account on the first business day of the month, the Financial Institution shall retain x% as form of a service fee. Congress shall set this fee in the current year’s fiscal budget. In the event of no approved budget, this fee will be last approved fee in a valid Congressional budget with a .25% per year increase until a budget is passed and approved. The names on all individual and organizational accounts are shielded from any Government Agency inquiries unless said Agency obtains a proper writ or court order, thus insuring confidentiality of Financial Institutions’ clientele.

        All current and future use taxes will not be affected by this tax code and will operate independently of this tax code. This tax code cannot be initialized in its first year without a signed and approved Federal Budget.

End the Manipulation.

End The Manipulation

Jeffrey Schaben

    Sometimes, I just get tired of it all. It seem as if spamming and mindless reposting has taken over the world. I don’t care about what someone else thinks, about any given topic. I am more interested in what you think. If I want to know how they think, I will follow them. I thought the Tea Party may have been a remedy for this. However, the Tea Party, like anything else is slowly becoming just another marketing tool. Is this because we accept the notion that in the end it is all about mindlessly gathering followers, to manipulate the government to serve our own agenda.

    I have supported the shutdown of the government. Not because I have this illusion that it will stop the implementation of ACA. The ACA is already law and the only way to truly stop it is by removing it piece by piece. The damage done by it’s implementation has already happened. We are like an animal caught in a trap. Any reckless movements may only further damage us. We need to brave the pain assess the damage. Then using all tools available, and our collective minds, extricate ourselves from this trap. I support the shutdown for the hope that the process will revert back to the intended process, formulated by our constitution. Not this abrogation of responsibility by all parties. They have handed off the responsibility of issuing government bonds to the fed. They have given up on any thoughts of a budget, to the status quo of baseline budgeting and continuing resolutions. The only cuts that happened lately, happened in a vacuum of inaction. These meaningless cuts were suppose to cause armageddon. Well, maybe we need a real armageddon so the current prophets in the media can tell the difference between fear mongering and disaster. If I was in congress I would stand up and say. “Yes, Mr. President. We have shut down government because of a budgetary impasse. However, the administrative branch has chosen how and what to shut down. Therefore, you are equally at blame for any pain felt by the American people.” In the end, We The People are only collateral damage. Nothing more, nothing less. Politics is a civilized less barbaric form of war. Real people will get hurt no matter which way this issue is resolved. So, drop the charade that you are working in everyones best interest.

    I use to think that we are overtaxed. However, after writing the book The CUT Tax. All of my subsequent research has pointed to the fact that we are not overtaxed per say. Just the distribution of taxes is heavily burdened on the middle class wage earner. That is because of the manipulation of the tax code for years. When I quit as an owner operator of a truck. My “annual income” did not change that much. only my tax liability.  I may have done less work overall, for the same amount of annual income. However, I lost all them nice deductions of items that were expenses as a small business. In the end, on paper I was making the same amount, However I had more disposable income as a small business. We need an honest discussions on taxation.

    An Author and Talk Show host, Dave Ramsey, has a saying about credit card companies. “If you play with snakes, you're going to get bit.” I feel the same way about the Income Tax Code. If we are only trying to manipulate the tax code, we are going to get bit. There is too much power invested in the current tax code. It needs to be abolished.

    Of the few people that have read my book, the consensus is that first we need to get a control on spending. Part of me agrees. However, if we were to redistribute the tax burden evenly again, then there may be a larger and more influential cry for fiscal responsibility. If I am a company, what do I really care about spending, if I can manipulate my tax burden down through the current tax code, I would be more concerned with losing my tax deductions.

I feel that that tax code must be distributed equally on all individuals and organizations, including the poor. This can be done now if we resolve to do this. If the rate is below 4% on gross. This should not unduly harm the poor. Then if rates do go up this is also hurting the poor, so maybe we should look at spending before raising taxes. Currently, if you divide 2012 GDP(BEA statistics, US Department of Commerce) $64,978 billion into 2012 Federal tax receipts $2,450 billion. You get .0377 or 3.7% These are very conservative numbers. The rate could be a lot less. My unscientific estimate for the tax to deliver a balanced budget is 3.2%

My 4 cents worth.

   

My 4 cents worth.

     I have found a number that should blow any middle class taxpayers mind. That number is .0377. You will say this does not look significant. What does it mean? That number is the total tax liability on a dollar bill for 2012. For every dollar made. Under, 4 cents was the federal tax burden. You wonder. “ How can this be true?”  “When they take at least 15% of my payroll  check.” It is the myth they sell you that the income tax code is designed to tax the rich. You may not believe my numbers, but check them for yourself. Oh, I am sorry you can’t with Federal Gov. shut down. What a joke that is. A web site cannot operate because no one is there. Mine works fine if I shut off the computer. This is the current number, $64,978.  2012 (BEA statistics, US Department of Commerce). All numbers in billions. Then, $2,450 for total receipts into treasury. If you divide the big number into littler number, you get  3.77% . Or , under 4 cents for every dollar. However, that number is three times larger when you figure average state and local taxes in. Not sure of exact amount on that one. Just something to think on. Just a quick blog. to busy to go into details.

Welcome to ACA Limbo

By Jeffrey Schaben. Writer of The CUT Tax ebook on kindle.

    The reason federal government solutions do not work well is because they are rigid. Even their carrot and stick approach is backwards. They tend to place the carrot behind the horse with the stick in front. That is because they base their models on statistics. Not on individual needs. No two communities or areas are exactly the same. The cost of living is completely different in NYC compared to Omaha as an example. And, peoples needs are not always the same. Therefore, how can the government design a comprehensive health care plan with four options that can satisfy the needs of all individuals. Also, in a society that places great value on the illusion we don’t have classes. Why four? One size should fits all. (Possibly the goal.) How does this four tier system work if you qualify for free care? Do you automatically get the free platinum plan? What do you mean it does not? That is unfair. That is why this plan is flawed. In a system that has financial bars to get under to qualify. That person is encouraged to manipulate their income to try to get under the lowest bar possible.  However, the government loves to see us bend over backwards for them.

    Now, that we are gravitating towards a part time employment society. Will the person that is working hard turn down the full time job they are offered? They could, if it ends up costing them more in health insurance cost and jeopardizes other benefits. These are the questions we need to answer.

    You may have heard of the term, a marriage of convenience. That is when two people though still married carry on like single individuals. They may keep up the appearance of marriage for many reason: Kids, money, social pressure, upward mobility, or just convenience.  A thought occurred to me today. Could we have divorces of convenience? Where the main breadwinner says. “Hey honey, I love you but we just can’t afford to stay married.” So, here is the deal. We get divorced all nice and legal. Write up our wills so all our money goes to the kids in the event of death. You get custody of the kids. You live here under the pretense that it is an amicable divorce, and I could not throw you and the kids on the street. And, will move out when I find something affordable for you. But, there is no hurry. You and the kids can qualify for public assistance and free health care. You will pay me back the child support in rent. And with the money we save we can really make ends meet. You would probably get by with that for a long time. This may technically constitute fraud. However, with the current administration, they may see you as a valuable voter. So, they may not pursue this. If you were planning to try this? Sorry I let the cat out of the bag. Don’t worry nobody will read this anyway. So, you're safe.

    I am not against public assistance. However, there is a point at which these so called needs lures otherwise capable individuals into the system. When based solely on financial statistics. I hate using a cliches. However, here is one. Figures never lie. But liars can figure. And with so many benefits at stake, the schemers will find ways in. This leads to the dilution of resources for those that truly need help. This is the unsustainable part of all public assistance. This system needs to be addressed not added too.

   

    I am writing this to not only highlight the problems with the ACA, but with the tax code and public assistance programs that are also written to drive people to crawl under the lowest pole possible. This manipulation has to stop on all levels. Before this country loses the concept of a land of opportunity. If the carrot is placed behind you, you are tempted to remain behind. Why move forward?  Is that is the true meaning of the communist slogan. “Moving forward.” Long live the proletariat, we need their sacrifices.