The Economist's Tale

If Our Nation Was Run Correctly, We Wouldn't Pay Taxes, We'd Earn Dividends

By Scott Smith

I

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There is an Alternative to Taxing Income

Instead of Taxing Income, Taxing Payments Makes a Lot More sense.

Our government's budget is $4 trillion (the tiny red sphere).

Today we tax the $16 trillion in income that we collectively earn (the small blue sphere). That's a big chunk of our income! 

What most people don't know is there are $5,000 trillion - that's $5 quadrillion! - in payments that occur each year (the large green sphere)!

If we were to tax payments instead of income, the tax rate would be less than 1% and we'd have a balanced budget!

 Want to know know how a Payments Tax works? Click here.

Want to know where all these payments come from?  Click here. 

Are you asking yourself, who loses from this new tax?  Click here.


Replacing Income Taxes With a Payments Tax Permits
New Social Programs Without High Taxes

Who wouldn't want a Basic Income on top of their earned income? Who wouldn't want free healthcare, free college, or a guaranteed retirement? The problem is how to pay for such programs! Today, someone earning $100,000 already pays $31,000 in federal taxes. Their taxes would skyrocket to $76,000 to support such programs, which is why they are impossible under our current system.

With a Payments Tax, the Total Tax Bill For Someone Earning $100,000 Would Be Just $180,
Making the Programs Below Affordable!


Basic Income

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There's been a lot of talk about providing everyone with a Basic Income, but as long as we tax income it's an impossibility. With a Payments Tax a Basic Income of $24,000 per year for every adult citizen, regardless of financial status, could be a reality.

More about Basic Income

 

Free Healthcare

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A Payments Tax would permit everyone in the U.S. to receive basic healthcare for free. Under the AMA program, you control your own destiny, not an insurance company or the government. You use your benefit to pay for the healthcare you want.

More about Free Healthcare

Free College

Today's student loan program is leaving millions of students with crippling debt. The easy credit of student loans has made the price of college skyrocket. The Challenge Program is the best way to bring the cost of college under control. A Payment Tax could provide free tuition for every college student.

More about Free College

Guaranteed Retirement

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Social Security is sliding into bankruptcy. If we stay with the current system, we'll either have to cuts benefits or increase FICA taxes soon. A Payments Tax could fund higher benefits than the current Social Security system does, and at a lower cost to you than our current FICA tax system.

More about Guaranteed Retirement

An Unemployed Couple

Today an unemployed couple receives benefits from Welfare. Depending on the state they live in, they may receive around $10,000 in annual benefits, plus Medicaid.

Under the proposed solutions, the same couple would receive $48,000 annually in Basic Income, plus Free Healthcare. We'd no longer need welfare.

How they'd receive $48,000 per year versus $10,000 today

A Couple Earning $30,000 Per Year

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Today a couple earning $30,000 per year nets about $25,000 after paying $1,000 in taxes and $4,000 in healthcare costs.

The same couple would receive $84,000 under the proposed system, which would be comprised of $30,000 from their salaries, $6,000 in Earned Income Credits, and $48,000 in Basic Income.

How they'd receive $84,000 per year versus $25,000 today

A Family Earning $250,000 Per Year

Today a family earning $250,000 with a $500,000 mortgage pays about $58,000 in income and payroll taxes,  $32,000 in mortgage payments, and $14,000 in healthcare costs, leaving them with net disposable income of about $145,000.

The same family would net $280,000 (after paying for housing) under the proposed system, which would be comprised of $250,000 from their salaries, paying only $17,000 in mortgage payments, having no healthcare costs, and earning $48,000 in Basic Income.

How they'd receive $280,000 per year versus $145,000 today


How Do the Above Programs Add Up?

Click below for a summary of what our new budget would be with the above programs. We could not afford these programs today when taxing income. They are only possible with a Payments Tax.

The new national budget

 

Copyright 2017 Scott Smith