TRUE TAX REFORM

Can you imagine a world where you personally, your business or even a big corporation have no dealings with the federal government and pay them no taxes? A world where no individual, business, corporation or organization has to keep any records for the federal government. Where the right given to the federal government to directly lay a tax on anyone or any entity is taken away? "Crazy" you say,  "can't happen; we need the federal government." I agree, we need the federal government. This isn't about taking away their money. It's about getting rid their power over us, our life or business to run absolutely everything and steal your time away from us. How? Very simple. Repealing the 16th amendment and adding a new amendment were the states collect a retail only sales tax and send it to the federal government. Congress sets its rate, the states collect point of sale retail sales taxes that almost all states already do. The only records that would need kept are gross sales receipts from retail businesses.  They collect the tax from the buyer like they almost all do already only it would be substantially more since the federal governments tax would now be included. Now before anyone cries foul. The federal government will still be getting as much as it is now if not more and individuals will not be paying any more than they are now in taxes. Nor would what you pay more for the goods with the new tax applied as I'll explain why later. What about state income taxes? Any state that didn't faze it out would simply go out of business. No one will live or do business in a state that requires hundreds of hours of their time if the state next door doesn't. Free market economics.

Many might ask what's the point then if they are still getting as much and we are paying as much. The point is huge, life changing,  the most revolutionary thing for the good that could happen to our nation. We are so conditioned to our present circumstances that I think most people who read the first paragraph didn't comprehend what it said and means on a practical level.  As an individual. You will never have to have any dealings, any paperwork regarding taxes, income, fee's or anything like them with the federal government again. There will never be an April 15th in your life again. That file cabinet or computer filled with records to prove how much money you made and all your legitimate deductions will disappear.  You are a free person.  The federal government doesn't even need to know your name unless you are getting money from them. This however is just the icing on the cake.

In America we do business or work for business to earn our livings and attain our standard of life. It's not just the money that business pay in taxes that is staggering but the time spent in compliance with that taxation. In addition to the SSI and Medicare they  withhold from paychecks to send to various governments. Business also  pay 6.2% of your wages under $110,000 to Social Security. They pay 1.45% of everything you earn to Medicare. If someone is self employed they pay the whole amount 15.3% of their earnings called a self employment tax. Then there is federal and corporate income taxes, unemployment taxes, and a host of other state taxes, fee's and insurances. One might say this is the cost of doing business. Maybe, but is the cost of doing business include hiring armies of employees' just to do all the record keeping associated with this? I've heard the number $250 billion dollars a year is what it is costing American businesses just to do all the work, hire all the employees and CPA's  just to do the taxes. It wouldn't surprise me if that number was half a trillion dollars a year in this compliance cost. A small construction business almost has to hire one person for every 5 employees who are making the money just to do the paperwork because of taxes. It is insane! What if all that disappeared? What if your employer simply wrote you a check without anything removed or just paid you cash and it was all legal since no government entity needs or wants to know what the business paid or you made. Yes some but not all bookkeepers and CPA's will lose their jobs.

Here though is what I think is the greatest benefit of a system like this. No one really knows the cost of taxation  and compliance that is built in and therefore hidden in everything we purchase. Lets run through an everyday scenario in our current system to get an idea.

There are literally dozens of layers of hidden taxation in many things we purchase. Lets take a gallon of gas. It all starts in a coal mine.

1.The labor of the people who are working for the mining company is taxed. SSI, Medicare, Income tax.

2. The mining company itself is taxed. They also pay  SSI, Medicare. then unemployment, corporate tax. (The USA's corporate tax is the highest in the developed world.) Perhaps royalties, perhaps capitol gains and lots of other fee's and taxes.

3. A transportation company has to be used to get the coal to a steel mill. The labor of the employee's of the transportation company, lets say a railroad is taxed. SSI, Medicare Income Tax.

4. Same thing for the railroad company. The also pay  SSI, Medicare. then unemployment and corporate tax and perhaps capitol gains and lots of other taxes and fees.

5. Coal gets to the steel mill. Now steel is produced for manufacturing heavy equipment. Scenario 1-4 is repeated for the iron ore and other ingredients in steel just like it was for the coal that is needed to  melt the iron ore.

6. Now of course the the mill workers and management all pay SSI, Medicare, and income tax on their labor.

7. The company that owns the mill also pays SSI, Medicare, Corporate , unemployment, perhaps capitol gains and lots of other taxes and fee's.

8. Now scenario 3-4 is repeated to get the steel to the heavy equipment manufacturing plant.

9. Now most heavy equipment plants don't make all the parts that go into their equipment and purchase many of them from other manufacturers.  So lets just say for arguments sake they have 8 suppliers. So conceivably  from raw materials to the finished product of these 8 suppliers could be these same 8 layers of taxation. That's 8 x 8 or 64 layers of hidden taxation and we don't even have the heavy equipment manufactured yet.

10. Now the heavy equipment makers employee's pay SSI. Medicare, Income tax.

11. The Heavy equipment pays SSI, Medicare, Corporate, Unemployment, perhaps capitol gains and lots of other taxes and fee's.

12.  Scenario 3-4 is now repeated as the heavy equipment must be shipped to the oil drilling company.

13. Oil drilling company. same scenario 1-2.

14 Ship crude either by rail or pipeline. Scenario 3-4 once more. Plus lets not forget the pipeline company had to go through scenario's 1-10 to build its pipeline.

15. Crude sold to wholesale company or big corporate oil company who then refine it. We have four more layers of personal and company taxes on the purchase of the crude and its refinement.

16. Shipping finished product to gas stations. Another layer of personal and company taxes.

17. Gas station. One more layer of personal and company taxes.

18. then we get hit with the approx. $.50 federal and state sales tax on the end.

But wait it doesn't end there! The mining companies had to buy heavy equipment to mine with and the transportation companies had to by heavy equipment to transport everything with. That equipment had 64 layers of hidden taxation built into the cost.

They all had to buy fuel to operate that equipment which has how many layers of hidden taxation built into the cost? How many flipping layers of hidden taxation are built into the cost of a gallon of gas or a computer!!!! Who knows hundreds? It is insane! How big is the army of bureaucrats  that need to collect and enforce all this and the millions of pages of laws to govern it? How many employees did these companies have to hire and the millions of hours of wasted labor just top comply with all of this? Is it possible that many of the goods we purchase have 50% of their cost as built in layers of hidden taxation? I'd say so. My bet would be 30% on most things with some hovering in the 15%-20%

What if all that disappeared? Simple. Prices would drop the amount that the multiple layers of hidden taxation and compliance cost added. Now lets just say that congress said it needed a 25% retail sales tax and the states and cites needed 10%. That's 35% added to the sale of the goods at the point of sale. That's a fortune some will say. Yes it is. Just imagine what an educated public would think about raising that tax? "Educated" you say. "the public is ignorant!" Well yes but since everyone that goes to the store and buys a roll of toilet paper would be paying that 35%. Everyone would now be educated.  My guess is 95% of people reading this never thought about all the hidden layers of taxation. So we go from 95% uneducated to 100% percent educated. Pretty good benefit of a sound, honest and out in the open taxation policy yes? So the reality is we would not be paying any more that we are now. Probably  less. That package of toilet paper that cost $10 would drop to $7 and then 35% would be added at the cash register making it $9.45.

Now some are saying but what about Social Security and Medicare. How will that get paid for? The feds can do whatever the peoples representatives vote for. If they want to continue to pay for peoples retirement or medical they can. They just have to adjust the programs to the new reality of one big general fund. If they want to "save" Medicare because its going under then they can say we need an extra 1% for Medicare and raise their take 1% and they can "designate" it strictly for Medicare. That is all smoke and mirrors anyway. They have be spending SSI funds on everything they want and writing  IOU's  for the "borrowed" funds for decades.

There are many more nation changing benefits than the ones listed already. To be continued.

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