Grassroots Commentary

Benefits for All Need Contributions from All

Albert Maslar · Jul. 15, 2013

The divided United States is broken fiscally, financially, culturally, politically, regionally and morally. No matter the issue, half are for something while half are against said something. Half the population pays no income taxes and most of those pay no payroll taxes but seemingly receive 100% of the benefits. No matter the issue, half are for something while the other half are against it.

Everything is disconnected as government divides the people, multiplies regulations, adds bureaucracies and caveats with contradictory “ifs,” “ands,” or “buts,” while subtracting constitutional rights, refuses to enforce legitimate “Law of the Land,” and refuses to protect the border while it spends massive American blood and money to protect borders of rogue terrorist nations that are in fact enemies of the US.

Congress refuses to defend its constitutional turf from dictatorial Executive Orders and arbitrary policy, conceding excessive powers to whoever happens to be president, while SCOTUS makes law instead of ruling on constitutionality. Every new 1,000+ page solution creates two new problems ad infinitum eliminating any effectiveness from solutions that in turn need to be fixed, causing another two new problems. Consequently nothing fits, causing gears to grind uselessly.

A real fix for the perpetual related problems of HealthCare, Taxes, Deficit, and Debt, is to change the tax structure in a way that treats all legal residents alike in conformance with constitutional intent. Something must be done, and quickly as the national debt now stands at an official $17 trillion – closer to $100 trillion according to real accounting standards. Barack Obama’s presidency has had four consecutive years of $1 trillion+ annual budget deficits, unprecedented in American history.

The foundation to fix the problems is installation of a 3% National Sales Tax (NST) with NO exemptions or exceptions, not even for non-profits, government, religious, medical and education. Dedicate 1% to current budget; 1% to National Debt; and 1% to Universal Medicare (UMC) to cover all legal US residents.

All residents, legal or not, having income or not, would be required to file an annual tax return to be used for census as well as to determine eligibility and amount or percentage of co-pay. Medicare is an established bureaucracy with its superstructure in place, so new departments would not be required.

To insure there are sufficient funds during the transition, a revised Income Tax Table applying to business as well as individuals would reduce income taxes to a graduated 20% maximum. Stock market Wall Street type transactions would be subject to a ½ percent transaction tax. That might put the brakes on High Frequency Trading (HFT) that adds to problems connected with artificial volatility that gobbles up normal investor profits in the blink of an eye, while causing havoc in the market. This tax creates a cushion enabling small investors to buy and sell on an even par with professional traders.

The rationale for the half percent tax on Wall Street type transactions is the reality that TV Wall Street Business Programs on CNBC and Bloom refer to floor traders as placing BETS on expected up or down movements in certain stocks or groups. Therefore, by their own words they border on being gamblers rather than investors. This insignificant fractional tax is valid and based on the methodology of gambling dens that oversee gambling rather than gamble themselves, the House rakes in its allotted percent, be it 5%, 10%, or whatever the traffic will bear.

High powered investors already changed rules in their favor when they forced changes in stock pricing from eighths of a dollar to pennies, and are now mills, tenth of a cent, and “basis points” that are one hundredth of one percent, that combined with High Frequency Trades executed in nanoseconds, puts investor-gamblers in the catbird seat … and these gamblers get tax breaks as well???

Wall Street’s gambling den may well be akin to a den of thieves and a shining example is former NJ Governor Jon S. Corzine who, after leaving NJ in financial shambles with what may have been illegal or funding policies not voter approved, was rewarded with a position as CEO of MF Global Holdings Ltd which he drove into bankruptcy with ill advised investment futures bets that he oversaw.

The beauty of the NST is that everyone would pay something whether income sources be legal, illegal, wages, fees, consulting, capital gains, interest, dividends, management, under-the-table, drugs, welfare, crime, etc. They would pay 3% of spending for support of the country, including automatic Universal Medicare for ALL LEGAL RESIDENTS of the US.

States stand to reduce their deficits as UMC payments for healthcare would wipe out the bulk of state Medicaid costs. Government payments of 3% NST would revert back to government for the express purpose of reducing debt, and not recycled back into current budget expenditures. That equates to an automatic 3% cut in budget spending that trickles down to further reduce national debt.

NST is based on an available 2008 study promulgated by Philadelphia Congressman Chaka Fattah and touted by Lanny Davis published in The HILL, would produce sufficient revenue to handle the debt, deficit, and national healthcare that would operate under existing Medicare rules and regulations, thereby containing overhead and regulations.

Using Lanny Davis’ numbers, there were $755 trillion of total transactions in 2008. If $312 trillion in stock transactions is deducted, with no exemptions or exceptions for NST, that leaves a possible $4.43 trillion in annual revenues for each phase: 1% each, or $4.43 trillion for budget, $4.43 trillion for deficit; and $4.43 trillion for universal Medicare. This means the proposed NST by itself represents real possibility for eliminating the national debt within 5 years, as $4.43 trillion allotted to the budget exceeds expenditures and Obama’s proposed $3.8 trillion current annual budget.

Currently the 2013 budget deficit is estimated to shrink to $759 billion but one thing is certain: Figures don’t lie, but liars figure. Current expenditures are $3.8 trillion – nearly $1 trillion more than revenues that continue to be misspent and wasted with unproductive and unnecessary redundancy.

The NST could replace the need to rely entirely on income tax that under this plan would be replaced by a graduated tax with higher exemptions and higher standard deduction to reduce manipulation of expenses for tax gain. The single tax-table for all entities, personal, business, and non-profit entities with a maximum GRADUATED tax rate of 20%, sample rates summarized as follows:

Effective tax rate on Taxable Income of $100,000: 2.74%
Effective tax rate on Taxable Income of $1 Million: 7.47%
Effective tax rate on Taxable Income of $1 Billion: 19.88%

Tax loopholes and special exceptions and treatment would be eliminated as ALL income would be treated identically – no exceptions, no tax-free income, no implied interest rate deductions for stock traders who do no work but get tax breaks for perhaps creating bubbles that eventually break the economy. The present Income Tax Code is cumbersome, complicated, confusing, and beyond fixing. Its more than 76,000 pages long and even the IRS gives conflicting rulings and does not understand its own rules and regulations.

Revenue from lowered income tax would make up budget shortfall, if any, not paid by budget portion of the 3% NST, while excess is dedicated to further reduction of the national debt. Income tax regulations would be programmed to expire when NST is sufficient to cover the current budget at which time the IRS should finally become history. Everyone pulling the wagon instead of half riding the wagon is a win win situation for the country and all residents.

It's Right. It's Free.