APT: A Tiny, Flat Transaction Tax - Far Better for the Nation than the National Sales Tax

www.apttax.com ^ | 11/1/04 | Edgar L Feige, PhD

[Doctor Stochastic]

How do you measure internal transactions vs external ones? If a company produces bolts internally instead of buying them, are the taxes different? Are taxes added to quality control transactions? Is sweat equity taxed? The whole idea seems like a method to sneak in a VAT along with an income tax. The paperwork would be overwhelming, at least compared to current methods.

[ancient_geezer]

does this or that argument mean that we should all continue to pay 70 TIMES more tax than we have to?

How do we pay 70 times less tax under APT?

Incidence of tax burden is not on who submits the check by law, it is a consequence of demand elasticities in the economy passing down to the various factors of consumer, laborer or capital investor/owner. We are all individuals competing and transacting in all markets directly and in our proxies of business.

The government's bill is paid by us all, how can the government survive on 70 times less revenues for the individuals making up the populace of the nation on which the incidence of all taxes must fall?

[EternalVigilance]

...would an internationally known Professor of Economics not have considered these thing before putting his name on the line?

Such considerations have never stopped them in the past.

Sorry, I don't want the government tracking all transactions, especially in ways the common citizen cannot understand.

This is a poisonous recipe for neverending political and financial hanky-panky of the worst sort.

One tax; visible; at the retail level.

I assure you this proposal is DOA politically.

[Doctor Stochastic]

If we could get by with 70 times less tax (whatever that means), why not just reduce income tax rates now?

[APT Project Director]

You have posted many points -- but I detect some understanding evolving. The states of course would have to do this voluntarily and would retain the right to tax BUT when their constituents see what can be accomplished on the national tax base level there will surely be a desire in the populous of basic tax relief on the state level. Your statement of 33% being revenue neutral BASED ON FAMILY INCOME may be right BUT Family and corporate adjusted gross income is less than 2% of the APT tax base -- that's how the very low rates are possible. I believe you perceptively brought up the Tobin Tax proposed in the international community to fund third world problems -- it never could be agreed on by the various sovereign gov'ts but that doesn't means the basic idea was bad - just it's application. Our enemies use gun powder against us, so should we not use gun powder for our good? Please look at the numbers and read the website carefully, there are alot of details there (www.apttax.com).
Then ask yourself should we just pass on a serious opportunity to pay 70 TIMES less Federal Tax than we have to?

[flashbunny]

If it comes from UW madison, it's crap.

[ApesForEvolution]

Free America!

Abolish the slave tax; the IRS and the IRC!!

Support the Fair Tax!!!

[FairOpinion]

"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."

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I stopped reading right here. Talking about BIG BROTHER!

The government will know every single transaction each person makes, every dime they take out of their bank account!

I think this is the "best" idea to ensure FULL GOVERNMENT CONTROL OF EVERYONE.

[ApesForEvolution]

Yes, it's sheer insanity...devious even, perhaps.

[JSteff]

"careful government management"

So it fails there. It is so small it could be like the "small temporary" internet connection tax on our phone bills. Once made it was never dropped.... just the original temporary part was dropped. It is now permanent and does not go to schools.

Your tax is so small that government would think it a great way to "painlessly" get additional revenue while keeping the regular screwed up rip off going.

The ONLY way our tax system will get meaningful reform is when they remove withholding and make people have to write a check every quarter for estimated taxes. That will bring home how much they really pay. Until then there will be NO reform of any type.

[FairOpinion]

Also, as others pointed out, it would kill the economy, by punishing investment and moving of money.

[ApesForEvolution]

Surely this group has better things to do...

[The Old Hoosier]

Sounds like a good way to discourage people from using banks and encourage them to put their money in overseas accounts.

Foreigners with money here would also go elsewhere.

[FairOpinion]

I just went to their website:

APT Tax stands for AUTOMATED PAYMENT of TRansaction Tax.

Even more insidious, than the payroll tax, in addition to being invasive and give direct control to the government over individuals.

With this, they might as well, just keep all the money, and give everyone a bowl of chili for lunch, and so on, because government knows best.

[general_re]

Sounds like a good way to discourage people from using banks and encourage them to put their money in overseas accounts.

Plus you get to watch interest rates shoot up as banks try to persuade people to ignore that 5% banking penalty (2.5% on the way into your account, 2.5% on the way back out). What fun. Where do we sign up?

[APT Project Director]

There seems to be a misunderstanding about the 70 Times figure. This comes form the fact that the APT tax base is approximately 70 times the current individual and corporate adjusted groo income tax base. Sure there well be some past throughto the individual but most will not. Because the tax is relatively so small much of it will be taken up by the market forces and bidding process.

[SouthernBreeze]

>>>>With APT you have to stop and do the math. The answer to will a prescription drug bought by a poor person be taxed - the answer is YES - how horrible. But the $70 purchase will be taxed about 18 CENTS and NO FICA will be taken from his/her paycheck.<<<<

I'm certainly no economist, but I can see something very deceptive about this proposal. We all know that the consumer ultimately pays all taxes. We pay the taxes that the producers have paid all through the process of bringing a product to market through the cost of the item. It would be no different with this tax. So the $70 prescription you are talking about would have cost somewhere in the neighborhood of $10 today?

If your proposed tax would reduce my share of taxes by 70 times what I pay now, all those taxes I would no longer pay outright would have to be paid by some other means (since we know the government is not going to operate on 70 times less money). This means they would have to be paid by all the transactions made to produce the product I buy, which will be passed along as increased costs.

It may SOUND like I'm paying almost no tax, but my buying power would be no more than now, and perhaps even less. I don't see how this is better than an NRST, and in fact would be worse because even a very tiny tax increase would be added to every transcation made in producing a product and therefore increase the cost by many, many times the percent of the tax increase.

[FairOpinion]

It doesn't matter how small it is, the implementation of it would put in place a horrible system of full government control.

I would also like to point out that the income tax, when first introduced was also miniscule. But once the system is there, all the government has to do is keep increasing it.

[EternalVigilance]

I would advise you to get some PR assistance, since you are failing miserably at offering any clear explanations that are convincing anyone. However, I know that wouldn't help. This proposal is a stinker.

FR is an opinion leader, especially in this subject area. If you can't sell it here, I assure you that you will receive no better reception in the broader fundamental tax reform movement.

Take the energy and resources and intellect you are expending and get behind the FairTax.

[FairOpinion]

History of the 16th Amendment
by W. Cleon Skousen

http://www.wealth4freedom.com/16thHistory.htm

EXCERPT:

"When the first income tax was sent out to the people, the Congress chortled confidently that "all good citizen will willingly and cheerfully support and sustain this, the fairest and cheapest of all taxes." That was the cute little monkey part. After all, the first tax ranged from merely 1% on the first $20,000 of taxable income and was only 7% on incomes above $500,000. Who could complain?(Ed. note: In 1994 "dollars" that $20K is now over $250K and the $500K is today over $6 million!)

At first, scarcely anyone did. Little did they know that before the tinkering was done in Washington, this system would be described by many Americans as the most unfair and expensive tax in the history of the nation. Within a few years, it had become the principal source of income for the federal government.

In the beginning, hardly anyone had to file a tax return because the tax did not apply to the vast majority of America's work-a-day citizens. For example, in 1939, 26 years after the Sixteenth Amendment was adopted, only 5% of the population, counting both taxpayers and their dependents, was required to file returns. Today, more than 80% of the population is under the income tax.

Withholding Taxes

The collection process was greatly facilitated in 1943 by a device created by FDR to pay the costs of WWII. It was called "withholding from wages and salaries". In other words, the tax was collected at the payroll window before it was even due to be paid by the taxpayer. Economists point out that this device, more than any other single factor, shifted the tax from its original design as a tax on the wealthy to a tax on the masses--mostly the middle class. "

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