Paul L. Caron

Thursday, June 6, 2013

The IRS Scandal, Day 28

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Try revamping our tax system

It was interesting reading the Sunday Perspective section on the budget commission's report and the individuals and organizations offering their suggestions in reducing the federal budget. All the cuts suggested — if you could get Congress to pass them — would not balance the budget but only slow the rate of our escalating national debt.
The problem is that all taxes are based on narrow lanes of taxation. Take income tax, for example. In 2008, Warren Buffett made $500 million and paid tax a rate of 15 percent. His secretary made $60,000 and paid tax at a rate of 28 percent. Why? Because hers was income and Buffett's was dividends. Unfair? You bet.
There has to be a simpler and fairer way to eliminate the deficit and balance the budget. And there is. The universal exchange tax, or UET, would eliminate our national debt in three to four years. Thereafter, it would eliminate the IRS and give the federal budget more money than Congress ever dreamed of.
The universal exchange tax is like a sales tax but it charges one-tenth of 1 percent on every documented exchange. Buy a hundred dollars worth of groceries, you pay 10 cents UET. Buy a $1,000 big-screen TV, the UET is $1; a $25,000 car, $25; and so on. Hardly money worth crying over.
So how can these minuscule amounts generate $4 trillion-$5 trillion a year? Well, the UET is not just for individuals. It include banks, financial clearinghouses, title companies, credit card companies, brokerage houses and tax collectors, all charged with processing and documenting transactions of value.
There are 4 quadrillion to 5 quadrillion exchanges in the United States every year. And each quadrillion is equal to approximately $1 trillion in revenue, or $4 trillion-5 trillion. Our federal budget this year is $3.8 trillion.
Americans have always been known to be independent, and resisting taxes is just another way of expressing it. But with the UET, there will be no income taxes, no IRS, no keeping of receipts to prove a deductible, no April 15 deadline, and no federal taxes deducted from your paycheck.
Under UET, your taxes are one-tenth of one percent for everything you buy. Better hold on to those pennies.

Posted by: Concerned Citizen | Jun 8, 2013 2:58:30 AM

Tom, I see benefits in mingling face-to-face with people from other offices during conferences. I do that after professional meetings and it allows me to ask, "How would you handle this or that?," and gives me a new contact if I have a question for which they have expertise.

There's no good reason that IRS conferences couldn't be more regional and held at Holiday Inn Express in smaller towns that could probably use a "stimulus," rather than at a fancy resort and with higher transportation costs. That also might sort out employees who really want to learn versus those who come only for a vacation.

But, there is no profit motive in government, as exhibited by the guy who doesn't mind spending tens of millions flying around the nation on Air Force One for photo-ops. Nothing is really going to change.

Posted by: Woody | Jun 6, 2013 12:49:46 PM

Why not a prohibition on any "conference" or other meeting by this or any other government agency unless such agency can show that the meeting could not br effectively held on line by system such as "Go-To-Meeting"?

Posted by: Tom Beebe | Jun 6, 2013 9:47:57 AM