The Proposal And The Plan - A Tax Free America

Categories: Education

When our parents were kids, there were less people to deal with, less taxes, less roads, less regulations.  The world has twice the population now that it did then.  The IRS is nicer now, but the legal system is over cluttered with more laws than ever, and peoples rights are being trounced upon more and more.  Here I will help bring you perspective  about where we came from, where we are, and then share some options for improvement that will simplify, clarify, and improve our lives as people, and as Americans.

There are more than 3,000 counties, and 8,000 municipalities in the United States, each with it's own laws and regulations, each finding it's own path to funding and profitability so that no two share the same laws, building codes, traffic violations, or funding systems.

There is a lot of knowledge floating around about how the system of taxation is broken.  The federal government always ignores how much money is coming in, but it spends what it wants to spend regardless of the number.

We in the U.S. are taxed through income by the Federal Government and also by the State of residence.  We are taxed through our spending by sales tax, gas tax, vehicle taxes, corporate taxes that are passed on in final costs to the consumer.  Building permits, traffic fines, cigarette and alcohol tax, service taxes, hotel taxes, airport taxes, tire tax, oversize load fees, property taxes, turnpike fees, airport fees and taxes, utility taxes, telephone taxes, import taxes, export taxes, manufacturing taxes, and on and on...every tax that is out there is .... in the end... passed to the consumer.  So is never fair to say that a government is raising tax on corporations, because that ALWAYS is passed down to the consumer, or puts companies out of business and hurts the economy.

The Democratic and Republican parties of the government have built into the system of taxation a gift taken from the taxpayers that it hands back to those who don't make enough money in the form of Earned Income Credit.  This means, if you don't make enough money, especially if you have kids, you get money back from the tax payers.

It is important to clarify how much we spend on collecting those tax dollars.  Consider the food stamp program.  Funds are now digitally distributed to Food Stamp users, but the people that work in the food stamp programs make incomes.  They spend a lot of time in determining who is eligible, and the DHS buildings are always big concrete structures with high energy costs.  There is a high cost of distribution that impacts everyone.  The government is known for its poor level of efficiency when it comes to money.  If it takes $10,000 to get $1,000 of it to a person, that's only 10% efficiency, and that's a current consensus of our governments' ability to get money to those in need.

The efficiency of government is one piece of the puzzle.  The ability to make quick decisions in any family, business, or government helps to alleviate costs in the future.  For instance, if there is a bad pot-hole in a road, it should be filled quickly regardless of the cost, because soon a car will hit it hard, and there will be a law suit for a broken car or an injured citizen.  Better to be proactive about repairs, and have instantaneous response than to pay on the back side.

Chapter 1:  Recognizing a massive problem
In The U.S, the government has gone back and forth from Democrat to Republican for a while in both the White House as well as the House and the Senate.  During these transitions, each imposes what it feels are band-aids and fixes, additions and subtractions to the federal tax code in order to appeal to constituents, complaints, changes, and resolutions.  The Democratic party leverages the giving of more funds to the poor during it's time in office so as to encourage more lower class votes for the party.  As they give more money away, and open the gates of immigration into the U.S, they effectively increase their voter base, while the burden of taxation remains on the working class as well as the rich.  The Obama administration continued this trend through the housing and financial crisis that extended from the expenses President Bush incurred during the Gulf War, Hurricane Katrina (which relocated more than 200,000 people from Louisiana to Texas), and 9/11 (which decimated the financial center of the world, and instigated extensive security costs throughout the nation).

The culmination of this tax code has left us in a quandry that nobody is talking about, and it should be main stream news until it's fixed.  Here's the deal:

If a family of 5 makes $35,000 per year, they are eligible to receive certain benefits.  Here's an estimate of what those benefits include:  1.  About $8000 in Earned Income Credit on their tax return.  2.  About $790 per month in food stamps.  3.  About $800-$1200 per month in housing credit.  4.  About $2000 per year in school lunches.  5.  About $700 per month in health benefits  6.  More than $10,000 per year in child care.  The list goes on and on.  Notice that just the list above includes $50,000 in untaxed income amounts not including the $35,000 that was made.  That makes for a total of $85,000 per year with a little bit of government paperwork filled out!!!

So guess what people!  If you make $55,000 per year in income, all of those benefits go away!!!   So who want's a raise now???

There is currently no motivation to make more money, and the system has created a vacuum in the middle class where there is no reason to be middle class.  The Bureaucrats have lost touch with the principles of finance, and through blind stupidity have effectively eliminated the middle class and created a mainstream of people who refuse to make more than enough to get all the benefits offered. Rather than make more money on paper, many of them look to cash-income alternatives so as not to lose the benefits.  

Those individuals struggle to gain good credit because they don't show enough income, yet knowing it will take making $110,000 per year to make more after taxes than they make at $35,000 per year, who's ready to be ambitious now??  So by system design, there is only rich and poor, and the middle class has effectively been eliminated.  Those who remain in the middle class category are there by default from the past, and are among the less informed.  They could take a pay cut to make more money.

Chapter 2:  Costs of doing business
How do you feel about the legal system?  If you have a tax problem, how do you feel about paying a lawyer $350.00 to fix it for you?  If you are self employed, how do you feel about paying taxes for your employees?  How motivated would you be to grow the business knowing you have to handle all that payroll?

That's the reason many small businesses quit growing.  The stresses and financial costs of a bookkeeper who can handle all of the employee paperwork is overbearing and stunts the growth of the economy.  The only businesses that make it are the ones who make enough money to quickly jump the hurdle of payroll expenses and the bookeeping associated with it. A one-employee business can spend as much as that employee makes on simply keeping up the books, payroll, and taxes.

As soon as a business adds more employees, they often find themselves stagnated and overwhelmed by the paperwork.  This is a broken sector of the system;  a growth inhibitor in America.  Anyone with a lot of gumption can get through it, but at what costs?  Employees get all sorts of benefits for working over 40 hours in a week.  But someone who wants to get ahead and be self employed often has to work 100 hours per week, and the rewards don't come for a long time!  Many fail, as the task is too daunting, or the business model does not sustain income.  

I have a solution to make it easier for those people, and I can't wait to share it...

Chapter 3:  What If?
So If you could go into business, and have no-one looking over your shoulder as to what you made, or who you employed, would it make it easier?  Would you consider it now? And if there was no need to track what you made or what your employees and subcontractors made, how might that reduce spending for businesses?  And what would those reduced costs do?  They would lower the costs to the customer or increase profitability, right?  And those costs pass on and around to the entire economy, right?

What if I told you that there is a way to help not only the small businessman, but in doing so, it would trickle down to helping the entire world's financial systems!

So say that no business needs to track expenses for an outside report (except for large corporations where publicly traded stock stock is held, and investors need to be able to track profits).  How does the elimination of most bookeeping jobs and CPA's help the economy as far as expenses.  Oh yeah,...  did I mention, that with this new option, nobody will have to file taxes, and we will no longer have a need for the IRS!   Somebody look it up... how much does that save the government?

If you didn't have to pay attention to what you made, would that help you free up a few hours of your life?  Because my thoughts are that if the government is really for the people, and since the people now have direct access through the internet to just about every statistic, every piece of information, every video of every debate, that we could create a system where the people are more involved in these debates and these decisions by way of an awesome government web site!   See, because by doing what I'm about to suggest, the poeple will have some time on their hands, and the most important thing the people will be a part of is oversight.  We need to have consistent citizen oversight of the government and its expenditures.  If every bid is on a visible web page where citizens can help find a better deal, and everyone gets a chance to bid on government work, I think that we could begin to reduce wasteful spending in government, and this new system would free up the time so that we all could get involved.  

*Government employees including congressmen and senators are paid by the citizens through the income they receive.  They work for those citizens.  Any monies generated by special interest groups need to be treated as a conflict of interest resulting in fines, unpaid time off, or termination.

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