Our tax system is screwed up. We're taxed for owning a house; we're taxed for owning land; we're taxed for having a job; we're taxed for pretty much existing. While it's true that taxes are necessary for a government to function, they don't have to be this numerous and/or complicated. There are thousands of pages of tax codes in Washington that are way too complicated for the average American to understand. Corrupt businesses and individuals can find loopholes and disclaimers to give themselves immunity from certain taxes and sometimes avoid paying millions of dollars that should have been paid. Most people agree that this is a slap in the face to "equality" and agree that the tax codes need to be simplified.
Not being satisfied with any of the currently proposed systems, I came up with a detailed outline (it was going to be a long article, but I stopped after the outline stage haha) of how I think businesses and taxes should be handled in this country. My tax system is a tax system based on reducing consumption and incentivizing post-consumer products along with sustainable practices. It's a fact that taxes are generally viewed by the public as bad things, so wouldn't it make sense to tax bad things instead of good things like income? The fact is that we can't go on consuming, consuming, consuming because we live on a finite planet. Eventually, we will run out of earth to consume. If we penalize the use of natural resources and incentivize sustainability, we will do the earth a very big favour. The following is a rough outline of my idea of the perfect 21st century tax code.
General rules for all entities:
1. Energy consumed is taxed. It is seen as buying a product from an energy-producing company.
-Energy producing companies still need energy and also generally use natural resources to create energy, so they will be taxed.
-Companies which produce energy by alternative methods (wind, solar, etc.) will be taxed on consuming the materials to make the turbines, panels, etc., but not for the energy they produce using these methods because it's not consuming natural resources.
2. Salaries for workers will not be taxed because "people are not a resource." You can't buy time/labour.
-Taxing money given to workers will cause the company to give out less to workers, lowering salaries, and hurting the workers.
3. Sales will not be taxed from the vendor-point; only from the consumer-point. Taxing both would be double taxing.
-Companies will charge a certain amount for a product. Then tax will be paid directly to the government so companies can't interfere.
4. Donations to charities will not be taxed.
-A person is "giving" to the charity, not "consuming" the charity.
-This may cause problems with the definitions of "donation" and "consumption." Tax cheats could possibly claim they were donating to a charity when they aren't.
-Would have to be enforced by a government organization.
5. Buying waste products will not be taxed.
-All companies have goals (i.e. "This company will make plastic bottles"). Any product/good that can be used to meet that goal can not be claimed as waste.
-By-products or non-necessary materials that can in no way contribute to the goal of the companies is "waste."
-Companies cannot declare a goal to make waste.
6. No property is taxed except property dedicated to a landfill.
-A company can either sell its trash, reduce the amount of trash created, or buy a landfill (they can't just let it pile up).
--Since greenhouse gas emissions are also "waste," companies will be taxed on those.
--Since selling its trash increases revenue instead of cost, selling will be incentivized.
-Goods that can't be recycled or reused will always end up in a landfill.
--This will cause the company that buys those goods to lose money for owning a landfill, so no company will buy it.
--This discourages non-recycleable production.
7. There are no other taxes!
-Individuals do not pay social security, medicare, etc. The funds come directly from tax dollars produced from consumption.
Base companies (extract natural resources from the earth)
1. Company expenses are mainly composed of energy costs and buying equipment from other companies. These costs are taxed.
-The only way a company will be profitable is if the value of the extracted goods is greater than the cost of energy.
2. They will not have to pay a tax on basic consumption because they will simply be taking materials from the ground
-This seems to give an incentive to natural resource depletion, but companies that buy goods from base companies have to pay tax. Companies that buy post-disposal goods don't.
-Other companies will therefore be less likely to buy from these companies because it will cost more.
1st tier companies (buy resources directly from base companies)
1. Company expenses consist of business transactions wherein goods are bought from base companies and other companies. These will be taxed.
2. Company will use energy and purchases to convert raw goods into new products, which are then sold.
-Buyers will primarily include other companies.
High-tier (consumer) companies (buy resources primarily from 1st tier companies)
1. Taxed on purchases from other companies.
2. Will use energy and purchases to combine goods into bigger "super"-goods, which will eventually be sold straight to consumers - no other companies.
3. Retail stores, department stores, clothing, etc.
General population/Consumers (don't sell anything; buy only)
1. Receive money from work done for companies.
2. Won't produce/sell anything, and all purchases are consumption, so all money is taxed (except savings and donations)
3. Buy goods for use then discard them.
Post-disposal companies (buy waste products to sell them again)
1. Buy waste from consumers/commpanies to make new products from them. Since these goods are "waste," their purchase will not be taxed.
2. Only taxes paid by these companies is energy/equipment.
-A post-disposal company that produces its energy from renewable sources and buys post-disposal equipment will thus pay no taxes.
-Incentivizes post-disposal companies and sustainable living.
3. Company will turn waste into "new" products and sell them to consumers.
-Consumers will still be taxed for this consumption (because buying recycled stuff is still buying stuff).
Comments (11)
Repackaging of FAIR TAX. This is BS. Why don't you call it what it is instead of what it isn't.
Call it the "Wealthy pay no taxes tax!"
The wealthy do pay taxes under this system. Anyone, regardless of income level, is taxed the same rate on items they buy. Wealthy people buy stuff the same way poor people do. In fact, wealthy people buy MORE stuff, so they'll pay MORE taxes. If a person works for a living and saves up a fortune in a savings account and doesn't spend any of it, the government shouldn't come in and take 35%. That person worked for his money, so the money should be his. If, however, a person spends money uncontrollably, devouring resources at barbaric rates, the government should tax the hell out of him. Tax bad things like consumption, not good things like income.
Best yet. Thanks
It seems appropriate to associate taxes with costly behaviors. But would there be different tax rates associated with different types of purchases made by individuals? For example, purchasing and consuming carrots should be less costly than purchasing and consuming gasoline because the gasoline consumption has a much greater negative impact, right? And purchasing an item with more packaging that will go into a landfill should cost more than purchasing one with little or no waste. The taxes on companies for the energy used in production will impact the price, but do the differing impacts of individual consumption come into play?
Well, you make a good point, but I, personally, think that adding varying taxes according to environmental impacts would just leave an opening for more corruption. Keeping the tax code as simple as possible is key to make it work. Like you said, the company energy tax will factor in to the cost; that, in my opinion, is enough.
Read Wikipedia on tax theory. Problem with sales and business taxes is that it's very hard to properly incentivize and tax the right people, and sales tax as a whole deincentivizes the act of consumption/production which potentially hurts the economy.
Personal income isn't generally used to create jobs or produce goods/services, and therefore a tax on personal income may not feel as fair as taxes on corporate profits, but logistically it's the best way to ensure that every person pays their share.
This tax is MEANT to deincentivize consumption; that's its purpose. We have molded our entire economy around consuming, consuming, consuming and not worrying about the consequences. We have a finite amount of natural resources, so we should use them sparingly. If you read the proposal, it talks about incentivizing post-consumer products, recycling, and reusing materials to close the loop on our endless consumption.
We haven't realized it yet, but the economy as we knew it before this "recession" will never come back; we simply can't sustain that. Whether we like it or not, we MUST move to a less consumption-based economy and move to a more sustainable one. This tax code helps to move in that direction.
I agree -- We have to move away from viewing consumption as desirable and helpful to the economy. The video at http://storyofstuff.com/ is a good start at explaining why. We need to move toward placing a greater value on life and incorporating sustainability of life into our measures of prosperity. Without sustainability of life, the economy can only be on a path of destruction, no matter how many products and/or services we are making, selling, or consuming.
sound like my resource tax.
I would tax people on the resources thay use up, destroyed, or keep any for thier private use.
The resources of the earth should be shared by all and if someone use up, destroyed, or keep any for just thier private use thay should pay the rest of us for those resources through a resource tax that can be use to pay for government and any money left over rebated back to the rest of us. Since the rich use the most resources thay would pay the highest taxes.
It is not the job of the government to steal from we the people in any way shape or form. End of story.
Yea? Well you don't have the right to steal from this green Earth in any way, shape, or form. End of story. Taxes are an unfortunate necessity to our society. While no one likes them, they need to be focused on incentivizing sustainable practices instead of penalizing people's hard work.