The Four Hour School Day

     I read an article that my math teacher brother posted on Facebook, about Finland having four hour school days. And how this has improved their educational results among their European neighbors. This started a text discussion and piqued my interest. I have include a link to the article if you wish to read it.

http://news.stanford.edu/news/2012/january/finnish-schools-reform-012012.html

     In my view the problem with education has been: We have turned it into free daycare for a large percentage of the population. It is more about keeping the children fed in a safe environment. Then about ingraining the fundamental concepts that everyone needs to start down the road of a productive and hopefully prosperous new life.

      I understand the need for a well-rounded education with exposure to the arts, sports, and other personal development classes.  But each child is unique, with varying levels of interest in these extra-curricular activities. The problem is that we are creating a one size fit all education system. A one that is built on exposure to x number of hours of required hours in each field. Children are not any different than adults. If something interests us we pay attention, if not we tune out. And our interest are always changing as we age. So why spend time and resources teaching a subject that may be forgotten the minute the student walks out.

     This is how I envisioning the dynamics of the system.

     The public system would have 2- 4 hour class blocks, depending on the size and logistics of the school district. These class block would consist of three fifty minute classes, and an hour lunch and recess. You would hire specialized teacher to fill these position. This would entail a larger pay raise to meet the level of teacher you are trying to acquire. This allows the district to maximize the number of students each teacher can teach to everyday. So although you are paying more to individual teachers you are eliminating extra staff needed to teach non-core classes, and in the long run reduce the size of the facilities you need to teach in.  The students in the elementary level would stay in their classroom for all three classes, with the teachers being brought in for their class time. Each teacher would have six hours of teaching time, and two hours for grading and other planning activities. This may entail the extra position of classroom coordinator to watch and help with the students during the class. But these roles could be filled by interns, or other qualified individuals. Since, an advanced degree would not be required for coordinator positions, the pay would be lower.

     You would drop all of the additional classes, such as art, music, P.E., and any other non-core class.  These classes can be offered in the before and after structure. The goal is focus on the core classes without watering down class time with extraneous activities.

     Next this encourages more parental involvement as they search for before or after school programs that can be tailored to the individual student’s aptitudes and interest.  These before and after program can either be public or private, depending on the wishes of the local population. A voucher system may be ideal, to bring in both private and public sector funding.

      And these before and after school programs would be more flexible on hours, therefore, could offer 2, 4, or 6 hour sessions. With the ability to help students with core classes they may be falling behind in, or more advanced classes students may wish to participate in. This also allows for programs to be vocationally or academically focused.

     We have fallen into thinking that all students deserve a college education, without considering if it is in the best interest of the student. Now we have rising tuition cost with the overall quality of degrees trending down to maintain the student body. And many students that leave indebted to the government with the equivalent of a mortgage payment, with or without a degree. And by the way, this guaranteed debt cannot be easily forgiven in bankruptcy. So they have it till they die, or have paid it off.  A kind of permanent indentured servitude. For a degree to have any competitive relevance, you have to pursue an even higher degree.

      So is our education system serving the needs of the student body, or the coffers of academia?

And don’t give me this every child deserves a college degree. To what end? The make a bachelor’s degree as relevant as a high school diploma? A required, you must have or a bare minimum?

     Education is a lifelong pursuit, whether we recognize this formally or grudgingly accept it. However, which has more relevance, something learned in a classroom, something we took personal time to pursue, or something learned through daily occupation? In the real world we generally use all three ways of learning. Why not create a system to maximize learning in all three levels?

Why I feel the Abortion Consent Law is a Bad Idea.

    When I heard of the proposal from State Representative Bill Bratton of providing written consent from the father of the child before an abortion could occur. A story covered in Mother Jones. My first thought was that was too much of an overreach. Although, the premise seams sound, the law appears to only act as a trump card. And I see this law being summarily overturned in the courts, without much controversy. 

     Although, the proposed law may be well intentioned, I see many problems regarding the application of this law.

     One reason is because, this law functions as a trump card. Thus giving the perceived future father of the baby the ability to override the mother’s wishes by the force of law. Not just equal say, but required participation. The father is not required to do one thing to stop the abortion, just refuse to sign. This leaves to mother exposed to further manipulation. 

     I agree that the current abortion laws do favor the rights of the female over the rights of the male. And this power can be used vindictively. As in the case of a woman saying. I am going to abort your baby in spite of how you feel. However, can we justify placing an equal law that states. You will carry this baby full term, and create a true balance. As for establishing the rights of the unborn, this is the only battle ground that this issue could be won on. The father/mother issue is just an obfuscation.

If the problem was a plague of Succubus that are stealing the seed of virtuous men, in order to obtain the blood price to partake in the sacrament of the radical feminist. Then this law may be applicable.

The problem I have is that this law is that it can give an individual with Machiavellian intentions the ability to use the state to enforce limited slavery.

     If you are male and do not wish to have an aborted baby. There are time tested ways to reduce the chances of this happening. You spend time with your potential mate. You ask questions, share dreams and determine that your mate is compatible and shares your values, before you engage in the activities that can create life. This is not a guarantee, but it greatly reduces the odds of bad decisions. I admit this is hard because, it requires self-control, and self-denial. An activity also mocked in today’s society.

     If your only contribution was to put in the required three dates in the hopes of sampling the goods. Then wishing to use the power of the state to stop a woman from killing your baby. I have no sympathy for you. You will have earned your regret.

     I am pro-life. However, I do not believe you can legislate abortion away, only drive it back underground. The only way to achieve a pro-life society is to win the hearts and minds of the society. Therefore, making it socially unacceptable. This does not include enabling a law that could be viewed as less evil than the law you are trying to remove. If you fight evil with evil, evil still wins.

     God gave us the gift of life, and consequently, he also gave us an equal if not greater gift called free will.  I am sure that God realized that this gift could be used for great evil. However, it can also lead to greater good. If we only existed without choices, we would all just exist, but would not have the ability to rise to exceptional. And our culture has embraced free will and tried to incorporate it into our constitution. We tend to write laws to punish behavior, not to remove the choice. And laws that are designed to remove choice we tend to impugn.

     Consequently, the supporters of abortion have successfully crafted the issue to be an issue of choice. To make the only visible consequence of abortion laws are the removal of a woman’s right to choose. It allow the average person to rationalize the issue to a matter of choice, and avoid having to take a moral stand. Then they can say, “I would never have or encourage someone to have an abortion. I just don’t want to make that decision for someone else.” Then they can rationalize that they are only pro-choice, not pro-abortion.

     I could create several scenarios in which this proposed law could be abused, but in the interest in brevity, I will leave it alone.

     Another issue involved in this is truth. How do you determine the paternity of the father without a court ordered paternity test? All the woman would have to do convince some man to sign a paper for her. Then pretend he was the father. That could lead to a messy court battle to require a paternity test. And then what, all pregnancies requiring paternity test. Maybe not at the beginning, they will only require it if you want an abortion. It would just be another step for state encroachment.

     In short, I believe that the sin of abortion will be the sin our society will have to pay for in future generations. Much like the past sin of slavery still haunts our existence today. Therefore, the only way to minimize the cost is to remove it the proper way, without legislative short cuts.

     There are many hidden agendas that are hiding under the pro-choice argument. Maybe it is time to allow freewill, and make the argument about the consequence and truth of abortion, instead of a matter of choice.

The CIA Diet Center

#satire

With the release of the detail of the Senate investigation into torturing of prisoners. One thing that stood out the most was the assertion about dietary manipulation.

The first thing that came to my mind was that maybe the CIA can franchise some Weight loss clinics. It sounded pretty effective With Khalid Sheikh Mohammad losing fifty pound. The advertising could post a before and after picture of him return to his fighting weight. With results like that, people would line up to pay for membership. And who needs FDA approval when you have congressional approval.

And what innovative patents they could have filed for. Although High Colonics have been around for years, with American ingenuity they took it to the next level. Anal nutrition.

Moreover, this homeopathic therapy has the beneficial effect of a non-surgical laparoscopic bands. Not only can they control the caloric intake, effects of weeks of non-oral nutrition would cause the stomach to shrink to a smaller size, thus limiting future caloric intake after therapy. Making for lasting results after treatment achieved in a natural way.

Although, governmental entities are not allowed to create private ventures, the CIA is rumored to have black op businesses in order to fund untraceable clandestine activity and to act as fronts. This would mean that they could not use their brand or past clientele performance to promote this endeavor, a marketing negative, and a lost a lot of national air-time exposure. They will be left to build the brand from the ground level. Maybe they can just license the franchise under a different name.

Does CO₂ Create Global Warming

I started this quest trying to find how CO₂ was measured and what data sets were used to support the greenhouse hypothesis.  I did not find what I expected.

I expected to have an average of CO₂ level that had been compiled from multiple stations scattered about the globe, and from that data I would be able to determine the standard of deviations collect from the samples to create a global mean. What I have found is that they primarily base their modeling on a few stations. Primarily, the Mauna Loa Observatory, in Hawaii. Most of the other stations that data is used from have similar characteristics. Most are in high altitude regions, and enjoy cold and dry climates, with a few exceptions. One being America Samoa, located between New Zealand and Hawaii, and not at a high elevation.

This I have deduced is important from the way that CO₂ is measured, they pass infrared wavelength through the sample, and measure how much of the wavelength was absorbed to determine the number of particles that are contained in the sample. Before they can do this they have to remove the remaining particles of water from the sample. That led me to think that the absorption rate for H₂O was similar to the absorption rate of CO₂. I am still researching this data, and will not cover it here.

This is an important factor, since H₂O makes up a greater percentage of atmospheric gases than CO₂ even at higher altitudes.  We are talking levels approaching 100 times greater than CO₂ at high altitudes. Something like 30,000 ppm (particles per million) to roughly 372 ppm of CO₂.

To me this has led to an Emperor has no cloths scenario. In which we are told that if you cannot see the effects of global warming, you are uneducated or a fool.  And that 98% of all scientist believe in anthropologic global warming. Is this true or are they afraid of being labeled a fool?

To be clear I am not a scientist, and I believe that human activity does have an effect on the overall climate. Whether this is good or bad depends on the criteria you use, or what you measure.

I will not argue that to date human activity has exacerbated natural weather events. It is hard to dismiss the Dust bowl created in the 1930’s as just a drought. The drought may have been a natural occurrence, however, it was made worse by poor land management practices, and the introduction of mechanized farming. And the 1995 flood reached record levels because of changes to the Missouri, Mississippi Rivers, and the surrounding flood plain areas.

We are taught in grade school of the water cycle. Carbon also has a cycle. This can clearly be seen in the data collected from Mauna Loa. In the winter CO₂ levels rise because more CO₂ is produced than used. Then it starts falling in the spring until it reaches its minimum for the year in fall and starts rising again.

The best model to explain this season cycle is a tree. A tree buds in the spring and starts to develop leaves, which are used for photosynthesis. Photosynthesis combines CO₂ from the air with H₂O with the energy of sunlight to create sugars that are used to grow the tree, and they exhale O₂. Now the sugars that are used to grow the tree become sequestered in the new growth on the tree, and this carbon will remain sequestered until the tree dies and deteriorates. Now in the fall, the leaves lose their function and fall off of the tree. These leaves will deteriorate and release their carbon as CO₂. This is the simple explanation for the seasonal variations of CO₂.

Where everything falls apart for me is when you contribute all the ills of global warming to CO₂ and seem to ignore more prevalent gases that make up the atmosphere. For years, we have been taking sequestered H₂O from the ground and using it in high desert environments. Could this not also have the effect they have been placing on carbon? That is why I question the motivation. Who can they get more money from? Big oil, or millions of smaller users of water? Who makes a better villain? An oil company or a farmer? And don’t complain with your mouth full.

I do not argue that CO₂ has been rising over the past century. I just think that there is a possibility that this rise could be a result of climate change, not a driving force. After all, look at the seasonal fluctuations now. Could this not be happening on a larger scale as growth cycle lengthen and create more new growth? Then when the climate becomes less beneficial, could not this new growth add to the total rise in CO₂ as it dies off and deteriorates at a faster pace than new growth? Thus becoming a lagging indicator instead of a predictor.

With the climate models based on educated guesses, instead of factual data, climate change has become settled politics, not settled science. You tell me we must act now to stop global warming. What if you are wrong and looking at the wrong criteria?  Could you not be causing more harm instead of stopping a perceived threat?

So, I will set here among the uneducated fools and say. “The Emperor has no cloths.” Until, you can produce factual, unbiased data. 

MO CUT Tax

A Look at a Currency Use Tax for the State of Missouri

 Jeffrey P Schaben

The Proposal

     The goal of this proposal is to create a tax system that treats all individuals and organizations equally, without favoring or targeting any group or individual or activity.

     This proposal is to replace the State Sales Tax, The State Personal Income Tax, and The State Corporate Tax for Missouri, with a fixed Gross Revenue tax automatically withdrawn at the financial institution.

      This tax will apply when any individual or organization deposits any new funds into a financial institution in the State of Missouri, that fits the criteria for taxation, then a fee will be extracted at the point of the deposit.

     The criteria for the enforcement of this fee will be any funds that originate outside of the identity of the depositor, or from listed exclusions from taxation. It will be determined by protocols, and monitored by the state banking regulators.

     Some of the exclusion will be return of principle from interest bearing account, social security, and possibly other government payments including hazard pay for the military. These exclusions could be determined by the state legislature. Electronically managed investment account could also be included in the return of principle concept, and acquisition of capital could be included, but not capital improvements. Capital improvement is a subjective value, and prone to shielding of personal expenditures.

     All official federal, state, and local government accounts will be the only accounts exempted from the protocols, thus exempt from the fee.

     The purpose of exclusions is to include all individuals and organizations equally. Thus, only include hard acquisition cost. And not create a situation where any allowed exclusion can be claimed by one entity, but not another.

   

      There will be no industry or individual specific exclusions.

      The goal of this form of taxation is to expand the tax base in an effort to reduce the overall rate to all entities.

      The initial rate for this tax would be 2.8%. Although this rate could be adjusted as necessary as part of the budgetary process. There will be not limits for raising or lowering of this tax, and automatic adjustments will be set by the first draft of this law, in the event of a budgetary impasse.

The fee returned to financial institution for implementing this form of taxation shall be set by the legislature.

      There will be no exclusions from this tax based on the profit or nonprofit status of the organization, including political organizations. All entities conducting business at Missouri financial institutions shall be subject to this fee, regardless of residency requirements.

      Conscientious objection shall be allow through strict cash or barter exchanges, where no funds are transferred though a financial institution.

 

Preface

    

     In 2013 I spent nine months writing a concept book outlining a proposal for a transactional tax I called The CUT(Currency Use Tax) Tax. Now I am trying to write state specific versions to provide baselines to better determine the overall tax rate for this version of taxation. Now, all calculation will be based on a static basis. Therefore, results may vary. I feel this static assessment would lead to higher rates than necessary to maintain a revenue neutral change over rate. I have kept the math simple, too make it verifiable to the average person, based on data readily available on the internet. The reason the rates will be higher than the actual rate is because, I do not factor in the cost of savings, and the additional spending power of the average middle class wage earner, or business.

     The state versions of this idea will not go into depth on the ideas I considered in formulating this plan. For that refer to original The CUT Tax book, and possibly a newer version that I hope to release soon.

     I know the second tax in the CUT Tax is redundant. However I am not a movie director so I could not run around calling it The CUT. The word “CUT” needs a qualifier behind it, and The CUT Fee may have created a little confusion. I didn’t want the Courts asking. Is this a fee or is it a Tax? I just wanted to be very clear that I view this concept as a Tax. There is one option I am looking into. I may change it to the CUFF (Currency Use Financial Fee) in the future. However, that would entail a large amount of work and expense to initiate at this time,

      The CUT Tax differs from other transactional tax in the triggering mechanism. The CUT Tax is designed to act as an automatic Gross Receipts tax. The transaction would only happen on transactions that originate outside of the identity of the individual account holder. Or on new revenue. There would be limited exemptions from this rule. The largest exemption would be the return of principle from interest bearing instruments. Examples would be: savings accounts, certificates of deposit, bonds, and mortgages. In those cases only interest and fees would be considered a new source of revenue, therefore subject to the CUT Tax. Other forms of transactional taxes that have been proposed would include, The FAIR Tax, (A sales taxed based idea), and the APT Tax (A “blind” transactional tax on every possible transaction with no exceptions).

      When I first developed this idea, I excluded Missouri as an ideal candidate for this tax. Primarily due to the geographic makeup of the State. I envisioned more isolated populations as the best candidates to try this form of taxation statewide. States like California, Alaska, Texas, Hawaii, Montana, Colorado, and many other states that I pictured as more geographically remote. In that they did not have major population centers within easy commuting distance to a neighboring state.

      This was because I viewed this tax as functioning without enforcement mechanisms created to ensure compliance. And with Missouri having several metropolitan areas that share borders with different states, I feared a large amount of non-compliance, without the cooperation of the neighboring state. However, with the push for a version of the “FAIR Tax” within our state, I viewed the potential loss of revenue to be less than the Fair Tax losses. Therefore, just as effective, if not more so.

      All plans have trade-offs, and this plan is no exception. This system would work better for the wage earning middle-class and small businesses. However, it could increase cost on businesses and on wealthier individuals. The effects of the FAIR Tax would be the opposite effect.

      I also understand that many of the saving to corporations and non-profits from removal of income tax compliance cost and FICA match, would not become viable unless this system was enacted nationwide. Therefore, I will outline the proposal for both the prospect of enacting before a nationwide version would be enacted, or, the CUT Tax could be passed with the qualification that it would not go into effect unless the Federal Government adopts this system.

      Since I have not developed a National platform in which to launch a campaign from. I will start small. I have always heard that all politics is local. So I will start at the state level first.

Explaining the Concept

     In order to understand how the CUT Tax works, I will lay out a simple transaction.

      When you deposit any money into a financial institution, this will trigger a computer program or protocol to determine the eligibility of the tax.  It would determine if the source of funds originated from outside of the identity of the depositor. This can be determined by listing the accounts held by the individual identity at other institutions. Then the protocol would determine if it originated from excluded sources like return of principle on instrument bearing accounts.

Once the eligibility for the tax is determined, the tax would be withdrawn from the deposit and the tax would be held in escrow until the funds would be transferred to the governmental treasury at a predetermined time. Then the financial institution would receive a predetermined fee to complete the transaction.

      Unfortunately all cash deposits would count as an external source since the origin would be undeterminable. However, the reverse is possible. If you want to avoid the tax than you only have to function on barter or a cash only basis. This is very hard to do in today’s economy. And for this tax to be efficient it must operate at a fee that falls below or equal to the cost entailed to live on a cash only basis. This would allow for legitimate conscientious objection to taxes, and create a competitive pressure on the tax rate.

     Most people do not think of the hidden cost that comes with operating on a cash only basis. The biggest cost is really a risk assessment. If someone robs you of a couple hundred dollars in cash, even if the perpetrator is caught, it is unlikely you will have your money replaced unless caught immediately after the theft. In a theft due through identity theft, you have a better chance at recovering the funds as long as you are aware that it had happened.

      Then you have security cost, which can involve the purchase of safes, security guards and other creative hiding spots. Banks have learned this lesson early in the creation of the banking system. Most only carry enough hard currency to maintain use cycles of the community they operate in. They have found that it is safer to loan out money to credit worthy individuals than to hoard all of their cash assets in a vault.  In this fashion they can spread their risk across a broad spectrum of investments, and even create a profit for the bank.

      Then we get into logistics of currency.  The individual may not stop to think of the convenience such instrument like checks, debit and credit cards have made in their lives. You no longer have to worry about bringing sufficient cash when going about your daily life.  Or having insufficient cash on hand in an emergency.  Now it is just a matter of properly managing your accounts.

     People always ask. If people have to pay a fee, won’t they just go to using cash? I say ask the retailers and credit card companies. The credit card companies charge a fee on the gross amount to retailers when they accept the usage of credit cards. And that seems to be working for them. When was the last time you paid cash price at the fuel pump? Not that long ago there was two prices on most fuel pumps. One for credit, and one for cash. That was because of the fee credit card companies charged. That fee did not go away, it is just incorporated into one price, and you pay it even if you use cash.

      In effect the CUT Tax works like the transaction fee charged by you card issuer.  In the state version it is harder to validate this charge, since states do not create their own form of currency. However, they do regulate the banking industry in their state. On the National level. I could point out that currency does function like a commodity, and therefore, the creator has the right to access a fair market fee for the use of the currency. Thus the CUT Tax.

Arriving at the Tax Percentage.

      When I wrote the original book, I spent a couple of weeks running numbers from public data that was reported to the SEC by various publicly owned companies and reverse engineered a number and applying it to the percentage of the overall market in their sector, to get me close to what I envisioned to be the gross GDP at the time. The number I came up with was 3.8% rate. Meaning if every dollar was taxed the same based on GDP. What would the rate be?

       Later, I found a short cut on the US department of Commerce Bureau of Economic Analysis web page (Interactive Data, 2012). And used the treasury number for total receipts for that year. Around $2,450 billion dollars. I arrived at a 3.77% rate. These numbers have been revised and have changed a little. Currently the GDP number is around $64,652.6 billion for 2012, combined with the number from the Tax Policy Center (Tax facts, n.d.)  That would make the new number .0378 after rounding.

I showed how I have arrived at the national tax rate as a frame of reference. The state version of this tax is not much different, and although you can dispute the data I am using, and the method. I contend that although not precise, it is a good estimation of the actual number.

      Missouri derives its revenue from a few different sources: Personal Income Tax, Sales Tax, Corporate Income Tax, Gaming Tax, Federal grants and other fees and use taxes. I will only concentrate on the Corporate and personal income tax, and Sales tax, and leave the Federal, gaming and use taxes as is.

     I have used ballotpedia.org (Missouri State Budget., n.d.). Which collects budget data from all of the different states. And the revenue numbers for FY 2013 are Personal Income Tax $5,489 Million, Sales Tax $1,872 Million, and Corporate tax $415 Million. For a combined total of $7,776 Million.

And to determine the states gross revenue, I went to the MERIC (Missouri Economic Research and Information Center) (Economic Indicators/Gross Domestic Product, n.d.). And their number was $276,345 Million. So that would make the CUT Tax rate 2.8% to replace the Income and Sales Tax portion.

      That would make the combined tax rate between state and federal at 6.58%.  This would not include any local or county level taxes, or use taxes.

Final Thoughts

     I am not opposed to eliminating either the state income tax combined with the corporate tax or the state sales tax. I just looked at the raw numbers and wonder if either is the best solution.

      In 2013, the revenue to the State of Missouri totaled $8,083 Million. The sources from Personal income tax at 6% rate was $5,489 Million, accounting for 67.9% of the total revenues. The Total revenue from Sales Tax for $1,872 Million at 4.4%, accounting for 23.2% of the total revenue. Then the revenue from Corporate Income Tax was $415 Million, which accounted for 5.1% of revenue. Since the rates on corporate taxes are progressive and varied, it is harder to figure an overall average.

Now to remove the sales tax and leave to corporate level, the new personal income tax would have to be around 8%. Even reducing or removing Corporate Tax rate, the percentage would be 8.4% to remain revenue neutral.

      In my understanding of the Fair tax, they would generally open up the sales tax to all end user items for goods and service. And then cap the maximum at 7% for the state, and 10% for city and local rates. And use this new form to replace the personal income tax, and the corporate tax codes.

The biggest problem I have with this is determining an end user. For the individual, this is easy, anything you purchase would be taxed. The problem is when determining end user on businesses. That can be arbitrary, and could lead to shielding the purchase of personal use items under the umbrella of a business or non-profit organization. Thus the state would have an interest in auditing purchases made by all organizations. Therefore, not really decreasing the states mandate to use force to maintain tax compliance.

      In the CUT Tax model, the state does not need a large collections body to enforce the fee. Only a small monitoring group, which can project and analyze trends. Any discrepancies from collection would either be from error, or fraud. And fraud can be investigated by the local or state law enforcement departments, following the constitutional guidelines long established for investigating criminal activity.  

      In summary, I see this form of taxation as the best option for continuing the American Ideal and culture, where technology is evolving on a rapid pace, and gives us the better balance between personal privacy and public stewardship.

      For more information, please follow me on Facebook, https://www.facebook.com/TheCUTTax, 

      My blog http://thecuttax.blogspot.com/,.

      Google+ https://plus.google.com/u/0/115958078282682149028/about,

       Or the original CUT Tax eBook on Kindle direct.  http://www.amazon.com/CUT-Tax-Jeffrey-Schaben-ebook/dp/B00F74SVB4/ref=sr_1_16?ie=UTF8&qid=1415980067&sr=8-16&keywords=the+cut+tax

The Morality of the CUT Tax

I run into this argument all the time. All taxes are theft. This is a broad generalization that does hold truth because of the way taxes are configured. Most taxes are imposed through threat and upheld through force of law.

I have built the concept of the CUT Tax through the concept that government is giving you a good or service in return for the fee they charge for this service. However, you wonder what service they are giving you, and would I want this service?

The answer to that is simple. They provide a stable form of barter. Well hopefully, the consequences of mismanaging this form of barter is the same as any business. If mismanaged they go bankrupt.

Yes, they have created tax schemes that forces them to enforce their monopoly on currency, through the force of laws.

However, currency is a valid product that can be created and upheld through the rational forces of self-interest. The only trick is to create a system where the cost does not exceed the market place and is valued because of the benefits it affords the user.

I see the CUT Tax as a possible solution to this balance. It offers the acquisition of this commodity at a flat and reasonable fee. If the fee ever exceeds it market value the individual is free to pursue either direct barter, function on a cash only basis, or turn to other forms of currency offered locally and abroad. This would create a market driven limit on the size of fee they can charge. Credit cards already offer this service through their use. They give merchants and consumers a stable format in which to facilitate transactions in an efficient manner. Why not treat our currency in the same form?

What is the Best Transactional Tax Idea?

In the mainstream of ideas, there are two main ideas for a transactional tax format. The first and most known is the Fair Tax, and the second less visible is the APT Tax. My idea of the CUT Tax falls closer to the APT Tax.

I was a proponent of the Fair Tax when it came out in the mid 90’s. I thought at the time it was the best and more realistic alternative to the Income Tax System at the time. Now I am having serious doubts of the Fair Tax model. Many of these doubts arise from current economic structure of our times.

No longer is the main area of growth derived from retail sales. Most personal wealth does not arise from building and selling a retail item. We are shifting to an economy driven by providing services and knowledge, and a large percentage of these services are going to provide goods and services to entities that would be completely free of any taxes. Choosing a Fair tax may lead to taxing a diminishing base.

The biggest issue against the Fair Tax I have is that it creates a relatively small pool in which to collect taxes on. It creates a false premise that government should reward investing, and punish spending. And this is a false premise because it views any spending within an organizational setting to be valid.

An example of this would be a car rental agency may be able to purchase their fleet tax free. This is because they would collect the Fair Tax when they rented out their vehicles. And this would be a reasonable exemption. However, let us expand this concept out to the next level. Suppose the lease is to a business. Then the tax would not be applicable on the end user. Therefore, you have created an incentive for a business to shelter a personal vehicle under a false premise.

Now the natural reaction from the individual that had to buy or lease a vehicle and pay the expensive end user tax would be either to create a business or non-profit, in order to make use of this loophole, or to complain to their representative about this unfair advantage. This will eventually lead to the auditing of every transaction within organizations to ensure that this allowance is not abused. So, instead of eliminating the concept if the Internal Revenue Service, you will just restructure the framework and grant it more authority within the individual states.

If the Fair Tax is enacted, I see a huge shift of popular support to the APT Tax, (Automatic Payment Transfer Tax).

Most of the problem I see with the APT Tax is that it is structured to make the Tax or Fee artificially low to the individual. I believe the 0.35% mirrored rate is a little too optimistic. If it was enacted, I believe a full third of the revenue projections will evaporate by market efficiency.

Now I take issue with the mirrored aspect of this tax, I see it as a way to create an artificially low tax rate in order to promote the growth of centralized government. I mean how can a wage earner complain if all they are paying is 35 cents on every $100.00? However, the true tax would be closer to 0.7%. Which still looks inconsequential until you realize that a majority of the tax becomes embedded into the final cost of every item. This effect is harder to quantify to the individual.

To explained the mirrored tax. They split the tax to be paid equally by the sender and receiver. So, if you have a $1000.00 payroll check, you pay $3.50 upon deposit into your account and the issuer pay $3.50 to issue the transaction. Now you as the receiver would only pay the other 0.35% if you transferred money or bought something else from your account.

In today’s electronic environment, it is unwise to keep your money in one account, and the people who have accounts in financial institutions generally have multiple accounts. You may have a checking account, savings account, retirement accounts, and various credit type accounts. And you will be charged basically both sides of this fee when transferring money from one account to another. This will create a disincentive to create multiple accounts. And in today’s environment of identity theft, it is advisable to have multiple accounts among different financial institutions. Most cases of identity theft can be rectified over time. However, you may need access into an unaffected account until the charges are reversed and you receive a new card issued to the affected account.  I have learned this lesson first hand lately. During the summer, my primary account was compromised three separate times, and most happened over the weekend, without access to money from other unaffected accounts, we probably would have not been able to get fuel for the car or groceries for the weekend until the next business day. If you tax lateral transactions then you encourage the individual to keep all their eggs in one basket.

Now, the CUT Tax (Currency Use Tax) functions like a transactional tax but is only triggered if you receive new funds from an unaffiliated source. It is based on the notion of Gross Revenue, and any lateral transactions within the family of accounts would happen tax free. This could be done with computer protocols and would not need a bureaucracy to manage compliance. All transactions could be monitored by the financial institutions which in turn are already monitored by state banking regulators and the FDIC. So no new enforcement agency created with no new powers granted to the preexisting regulators. The trade off is a higher transactional tax than the APT, but significantly lower than the Fair Tax. It should be around 4%. And it does not distinguish between use or type organization. All organizations and individuals would have the same flat fee based on gross.  Thus no tax advantage to creating organizations, only legal advantages such as Limited Liability.

In my opinion, the battle between the Fair Tax and the APT Tax are battles designed to push a political agenda. One is to protect and expand the consolidation of wealth, and the other is to protect and expand the consolidation of the Central Government.  Both ignore the concept of unintended consequences in the promotion of their agendas. I see my option as protecting and expanding the middle class. That is my agenda, the very rich and the poor will always be with us, so work on a system that promotes the middle.