Posted on 12/05/2004 9:03:22 PM PST by APT Project Director
AUTOMATED PAYMENT TRANSACTION (APT) TAX Taxation technology for the 21st century
Dr. Edgar L. Feige, Professor Emeritus of Economics from the University of Wisconsin-Madison and the originator of the APT Tax concept, has just produced new estimates suggesting that a broad-based transaction tax as low as six tenths of one percent could replace the entire Federal and State 2005 budget revenue requirements of the United States of America.
The APT concept is elegant in its simplicity - potentially replacing the entire federal and state tax system - including income, corporate profits, excise and estate taxes - in favor of a tiny tax on all transactions. The tax would be automatically deducted from special taxpayer accounts, linked by software to all accounts at financial institutions capable of making final payments to the government seamlessly in real-time. The APT tax therefore eliminates the need for individuals and firms to file income and information tax returns. This is estimated to save citizens and the government roughly $200 billion per year in administration, enforcement, evasion and compliance costs, roughly seven times the amount currently being spent on homeland security.
The APT tax seeks to maximize the goals of both the government and the people - collecting necessary revenue with the lowest possible tax rate. The difference between the APT tax and our current income tax, as well as the proposed consumption taxes, is simplicity, progressivity, and breadth-the APT tax allows for significantly lower rates spread more equally throughout the world of economic activity. The APT is a transaction tax, and as such, taxes every single transaction that occurs in the economy including fund transfers between accounts and transactions involving the exchange of bonds, securities and foreign exchange. Because the wealthy conduct a disproportionate share of these financial transactions, the tax is highly progressive despite its flat rate. Progressivity is achieved through the skewness of tax base itself rather than through the progressive income tax rate structure of the current system. The very small tax is "sliced" off each side of every transaction as it moves electronically through banks and all other qualifying financial institutions. The tax collection is orderly and transparent, the rules are simple and universal and apolitical. The APT system eliminates the entire present tax code. No more exemptions, no more deductions, no more special interest loopholes and no more tax returns.
Feige's 2005 projections of total debits of $881 Tril., and total transactions of $832 Tril. (based on the most recent 2002 Bank for International Settlements data) update the figures he used in his original paper, published in Economic Policy in 2000. Taking the average of these two estimates ($856 Tril.), he conservatively assumes that the replacement of the current tax system with a revenue neutral APT tax will reduce total transactions by 50%. The projected potential APT tax base for 2005 would then be $428 Tril., permitting a revenue neutral flat tax of .57 percent on all transactions or .28 percent on each (buyer and seller) transactor to replace projected 2005 Federal and State tax revenues.
The tax rates required for a "revenue neutral" tax are divided into three phases which are the result of a suggested implementation plan that would gradually replace virtually all Federal and State taxes. The projected tax rates are calculated conservatively, assuming that only 50% of the potential 2005 APT tax base is available, since the volume of total transactions is expected to fall with the introduction of the APT tax. To the extent that transactions decline less than is assumed in the current calculations, an even lower tax rate would be able to raise the requisite revenues. As individuals and businesses use their new found economic freedom, transactions naturally grow over time, suggesting that future tax rates could be even lower.
Utilizing 50% of the projected APT tax base for 2005 of $856 Tril., that is, $428 Tril, the estimated tax rates required to raise the revenues projected for 2005 budgets are as follows:
Phase I (Eliminate all Federal taxes other than SS and Medicare) Required revenue neutral target=$1.242 Tril: Required tax rate = 0.29% per transaction or 0.15% per transactor.
Phase II (Eliminate all Federal taxes including Social Security and Medicare "payroll" taxes) Required revenue neutral target = $2.036 Tril. Required tax rate = 0.48 % per transaction or 0.24% per transactor.
Phase III (Eliminate all Federal taxes including Social Security and Medicare "payroll" taxes and all State personal income; corporate profits and sales taxes) Required revenue neutral target = $2.436 Tril. Required tax rate = 0.57% per transaction or 0.28% per transactor.
The estimates above are based on 2005 revenue and transaction projections. Implementing the three phases will require several years and careful government management, especially the third phase. However, Dr. Feige has built in a safeguard for the APT Tax by calculating the required tax rate based on only half of the transactions that are actually observed.
Examples: Assuming full implementation of Phase three: 1. $100 restaurant bill would have a tax to the customer estimated to be 28 cents and the restaurant would pay 28 cents. 2. $50,000 family income deposited and spent or moved to savings results in $100,000 of transactions paying a total tax of $280 distributed over all the individual transactions as they occurred through the year. These amounts would be doubled if businesses fully shifted their tax burden to the consumer, but nowhere near the $15,000 to $20,000 the family would pay under the current federal and state systems.
It is now important to begin the process of planning the economic, legal, technical and administrative requirements necessary for a smooth and transparent transition from the current tax system to an APT system. The proposed, new collection system will be tested by computer simulation to capture all potential errors and omissions (new job for the IRS). Then, it will take several years to rollout, especially Phase III involving central collection and distribution to the States. A national commitment to this revolutionary, fair, automatic and lowest cost tax system is needed NOW!
For more details, please visit www.apttax.com
William J Hermann, Jr. MD, Director APT Tax Project Contact: administrator@apttax.com , 713-932-3773
OK, I like it. Very well written. So what part presents a problem? APT eliminates the IRS the same as NFST, (limited government), it collects the same amount of money, just from a different angle. It doesn't require government supervision. It's a software program. Do you know anybody that didn't get one of those AOL discs in the mail? It's kind of like that, but they only go to banks, and they are required to run it. Should it become necessary to change the rate, the treasury department just sends out an upgrade.
A bargain with the devil? Really? The Devil Himself? OK, breath easy... now, when was last time you took your medication? I don'ts see relevence here...
"The true aim of tax policy is to collect taxes as efficiently as possible, and cause the least amount of harm in the process. APT accomplishes this better than anything else I've seen proposed."
If you believe that both individuals and businesses can have their tax burden cut dramatically and yet the federal government would take in the same amount of money, then I understand how you would feel this way.
The goals of this forum are embodied in the empowerment of the indivual over the convienience or capacity of government to extract its pound of flesh.
How does the APT empower the citizens perception and control in holding government to account for its excessess and limit the growth of government?
As far as I perceive, the APT hands a tool to government that allows it to expand readily in power and hide extensive operations behind the corporate veil where its machinations in the manipulations of markets and extractions from the citizen's wealth can be hidden.
APT doesn't do it and neither does NST. These are proposals that can and should be openly debated on their merits, and not summarily dismissed as inherently evil.
APT eliminates the IRS the same as NFST
What is an NFST?
I support a National Retail Sales Tax (NRST). Never heard of your NFST. As far as I know, an NFST has something worse than an IRS.
(limited government),
IRS traded for the unlimited ability to observe individual financial transaction history at will and unobserved. Sorry that is not limited government in my book.
it collects the same amount of money, just from a different angle.
Don't know about your "NFST" however the NRST assures the citizen is of the tax burden that falls upon him. That to me is one very big difference, that empowers the citizen in allowing to make a knowledgeable choice in carrying out the transaction, paying the tax, or turning to an alternative the either eliminates the tax(in providing own product or buying a used version of a product, or evade as he may choose), or delays the tax through investment only to be taxed when spent on a legitimate taxable transaction of his choice.
The APT denies the exercise of his decision in such matters, as well as the exercise of a know legible decision in who he elects to support for office.
It doesn't require government supervision. It's a software program.
ROTFLMAO, don't insult my intelligence nor my training which happens to be in software engineering, many programs of which have quite useful in the acquisition of transactional data for use by government. Supervision is ubiquitous in such systems, of necessity, application of the data on demand from government is the issue, not casual operation.
Do you know anybody that didn't get one of those AOL discs in the mail? It's kind of like that, but they only go to banks, and they are required to run it.
Forget the analogies friend, I know what goes into such systems and am fully aware of their potentials for abuse.
Should it become necessary to change the rate, the treasury department just sends out an upgrade.
Containing every thing necessary for collection, audit and collation of personal transaction data to the ultimate degree. Forget it.
A bargain with the devil? Really? The Devil Himself? OK, breath easy... now, when was last time you took your medication?
You may dispense with the argumentum ad hominem tactic. You must be running short on rhetorical material.
I don'ts see relevence here...
I must have misjudged you, I was sure you would see the relevance.
However, if you are truly admitting a lack of understanding the relevance of the issues of financial and presonal privacy as it relates to liberty and the relation of the individual to government, you are in desparate need on some enlightenment on the subject, and perhaps not the best to be anwering very definite concerns about the Automated Payment Transaction tax and its underlying software.
APT doesn't do it and neither does NST.
Doesn't do what?
By the way I don't support VATs, which are included under the rubic of "NST" and hide tax burdens as well as intervention into markets by varible scale rates on specific products and service behind the scenes, as the APT is fully capable of being set up to do without the knowledge of the electorate generally.
I only support the National Retail Sales Tax (NRST), a single stage, single rate Retail level tax levied on all new goods and services and open to the perceptions of the citizen on a personal level.
I think where we diverge is in your absolute insistence that tax policy must serve your concept
of the proper relationship between the government and the governed. You're talking about something that never was and never will be, while denying validity to any other proposal, and attributing them sinister motives. Hold dearly to that though if you must.
I still think you are a bit paranoid. IR the government wanted to track you, all they would have to do is evesdrop on your communications... oh damn! we'Fe on the Rucking inteFnet!
( see, that's a little late night humor. in my last entry i said nFst instead of nRst, so here i ...well, nevermind. good night all)
I think where we diverge is in your absolute insistence that tax policy must serve your concept of the proper relationship between the government and the governed.
That is readily apparent, insistence on the empowerment of an informed electorate is key to limited government in my view, as well as the founders of this nation. Any tax system that fails to provide the largest degree of clear and open view of burden to the electorate, charged with the responsibility of "eternal vigilance" in defense of liberty, cannot be said to be an appropriate system for use in this nation.
You're talking about something that never was and never will be, while denying validity to any other proposal, and attributing them sinister motives.
Tax systems don't have motives, their designers and users do.
|
|
Any system that is not designed to provide maximum transparency to the electorate such that they are able to discern it impact upon themselves in a personal way, is counter to principles of government by consent of the governed.
The electorate can only express that consent through a knowledgible choice of representation. The systems of government must be transparent to the citizen that that francize can be exercised in it proper expression.
The condition upon which God hath given liberty to man is eternal vigilance; which condition if he break, servitude is at once the consequence of his crime and the punishment of his guilt."
-John Philpot Curran: Speech upon the Right of Election, 1790.
http://www.heartland.org/Article.cfm?artId=10714
- Eternal vigilance is the price of liberty--power is ever stealing from the many to the few.
I still think you are a bit paranoid. IR the government wanted to track you, all they would have to do is evesdrop on your communications... oh damn! we'Fe on the Rucking inteFnet!
"The penalty good men pay for indifference to public affairs is to be ruled by evil men."
- Plato -
Nor do I want to keep this thread alive, so let me just make a few "pithy" points:
SUMMARY: THIS IS A TROJAN HORSE.
ITS REAL PURPOSE IS TO EXERT FULL GOVERNMENT CONTROL ON THE PEOPLE, AND DESTOY THE US ECONOMY AND WAY OF LIFE, THAT ENEMIES FOREIGN AND DOMESTIC HADN'T SUCCEEDED AT SO FAR.
1. The APT sets up a system for government intrusion, that puts the IRS to shame.
"The tax would be automatically deducted from special taxpayer accounts, linked by software to all accounts at financial institutions capable of making final payments to the government seamlessly in real-time."
2. You can't compare this insiduous taxation to the National Retail Sales Tax. Based on the APT concept, goods can get taxed dozens, even hundreds of times, before they reach the consumer, so the consumer could well be paying half of the price of something in taxes.
3. As you mentioned, the way the taxation is done, people have no idea how much taxes they are really paying.As a result, it's easy for the government to a) increase the tax and b) start taxing certain types of transactions more, than others, thereby instituting additional control over the people.
4. It will kill the economy, because it is designed to destroy the stock and commody markets, by basically taxing those markets out of existence. It will also kill the economy by taxing every item to the extent, that people won't be able to afford to buy anything,
Anyone who claims to understand it and is still pushing it, is only interested in its ultimate effects, which are most certainly NOT freedom and prosperity of the American people.
I am done with this thread now.
It rates to be a rather rotten day, all told.
The short answer is that you transaction tax types REALLY don't understand mkt participants; you'll either exempt MOST of the players, one way or another, from your confiscatory scheme, or you'll kill off mkts left and right. You can't ''compensate'' for such a result, mate. You're taxing capital with your scheme, not income, and apparently you lot don't understand the difference.
Detailed commentary to follow, sometime over the weekend.
The worst thing about being blind is that you can't see. Taxes have nothing to do with eternal vigilence. They are how a people collectively fund their government. With the requirement to file tax returns, people are not scrutinizing where their money goes,. Just look at this last election. How much play did taxation and government spending get? How will NST be any different? Come down off your self-appointed importance. Americans know what freedom is and don't need your dogma forced down their throats. It's been said that some people are so narrow minded that if they fell face first on a straight pin they'd be blinded in both eyes. It's a shame this discussion had to degrade into this. It isn't what I would have hoped for.
A pleasure, sir!
And a very Merry Christmas to you and yours!
And, of course, the merriest of Christmases to you and your family and friends!
Capital is valued by it's productivity. Capital isn't going anywhere. Just a certain amount of trading. APT does rely on capturing tax revenue from a huge volume of trading for it's principle virtue of a very low rate because of an extremely large tax base. If you were to be hired as a consultant, I'm sure you could come up with some positive suggestions as how to best achieve this. The benefits of successfully implementing APT far outweigh any initial difficulties in implementation. I want to know how best to make APT work, not why it won't work. Sorry to hear about your computers. Have a nice weekend...
Your sentiment about productivity is's the same sort of bilge spewed by every state socialist in history, and I'm at least as qualified as you to be such a judge, having actually engaged in demonstrably productive activity for some few decades. The first difference between us is that I know that NO man is competent to be such a judge.
I produce to survive, and I employ my capital as I see fit to aid in my survival. I either produce positive results for my clients, in aid of my own eventual profit, or they fire my ass. Equally, I employ my capital in a profitable fashion, or pretty soon I haven't any, and the marketplace kicks me out on my ass.
These are acceptable conditions of contest; I've accepted them long since.
What is utterly and non-negotiably UNacceptable is the attempt of would-be vest-pocket ivory-tower tyrants such as you to kick me out on my ass, especially when operating under such an incredible conceit as being able to define ''productive uses'' for one and all. And -- trust me, write it down in big black letters, Jack -- you don't even want to think about such an attempt.
History records no exception of which I'm aware to that famed rule, ''What goes around, comes around.''
You sound like you need some rest. You've probably got some good points to make, if only you weren't so strident. Personally, I don't care about capital, or anything else. I just so happen to have an interest in tax reform, as do many FReepers. I find it amazing to see how hard it is to get a rational discussion going about the subject. I would really like to raise the level of discourse here. Any takers?
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.