Have you heard that Finland plans to pay everyone -- every Finnish citizen -- a regular living allowance ? No means test. Same amount for everyone. And no other social welfare payment.
Simple. Brilliantly simple.
And next: let's simplify taxation. And I mean, let's *really* simplify taxation. And, at the same time, let's make taxation absolutely fair.
Who should pay more tax ? Those with more money. How can you tell that they have more money ? Because they earn more money and they spend more money. Earning money and spending money involve the transfer of money.
Let's put a tax on the transfer of money.
For example: Let's say that you earn $100. So your employer pays you -- transfers to you -- $100. Your employer also pays the government a transfer tax of (say) 1%, that is, $1.
If you then spend $80 of your earnings on entertainment -- then you also pay 80c to the government as transfer tax. Awkward ? Tick the box which says to the business receiving your money, "Please charge me the extra 80c and pay that to the government as transfer tax." The business has accountants, it's easy for them.
But wait ! This is a "tax on the transfer of money". How is most money transferred ? Via a bank... Direct debit, EFT, credit card... The vast majority of transfers of money go via a bank. So banks are given the responsibility for skimming off -- and passing to the government -- the transfer tax.
The amount of the transfer tax is included in the agreed amount of payment. The payer pays the agreed amount. The bank pays the transfer tax. Whoever is being paid received the agreed amount -- less tax.
The transfer tax is on everything. Absolutely everything. On everyday essentials ? Yes ! The more "essentials" you can afford, the more tax you will be paying.
So everyone moves to cash payments ? No worries, there are two solutions: You want cash to make a cash payment ? As you withdraw the required cash from the bank... you will pay the transfer tax. People avoid using banks ? The banks will lower their charges, in order to bring back your business.
Why would the banks collect a government tax ? Because they are paid to do it... Paid a percentage of the transfer tax that they collect.
Will barter reduce the taxable transfer of money ? No more than it does at the moment... Barter may reduce the transfer of money -- but it is too awkward for most transactions. (If you will work 40 hours this week, I will give you a truckload of broad beans... As if.)
But wait ! What about tax deductions ? How are they used to offset taxes ? Simple: there are no tax deductions.
A tax deduction is a government subsidy for inefficient business. The more you spend on production, the less tax you pay. What ?! So a business which is efficient, which reduces its costs, will pay more tax ?! Forget it !
There are no tax deductions. If you want to make more money from your business -- you improve your business. It's that simple.
What about all those nasty corporations which hide their profits overseas ? Well, where do those profits come from ? From Australians who transfer money in payment... And those transfers of money are taxed. At the standard rate. For every single transaction.
What about payment in services rather than money ? For example, an employee accepting a reduced salary but getting a company car, and children's school fees paid by the employer ? Simple: When the company pays for the company car, they also pay the transfer tax. When they pay the school fees, they also pay the transfer tax. (Unless the school and the car yard will take payment in broad beans...)
Other taxes ? All scrapped.
What rate of tax will be required ? I'll leave that to the economists and the accountants. And to the politicians, as they decide how much they need, to buy the required popularity.
Any other problems ? Let me know. And I'll look for a simple solution.
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Einstein's Theory of Intelligence: "It's very easy to be smart. Just think of something really dumb to say, then say the exact opposite." … per Pardon my Planet
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