Sunday, September 09, 2007
the solution to many problems
When it comes to tax reform, the Income Tax has to be at the top of the list, anywhere, around the world. When we describe ourselves as a consumer society, we make two assumptions: you get what you pay for, and that people will choose what is best for themselves. One man one vote seems self evident yet nowhere in the tax code is this premise used, combined with the two preceding, to define a means for tax collecting.
Income Tax, as well as the GST are the means, primarily from which the government intends to gain its revenue toward expenses. What are they defining? Very little, frankly. Furthermore, the Income Tax is regressive as it is complex, subject to much avoidance, with its evasion a subject of much concern for the revenue authorities.
A fixed term of taxation, that is relatively low, and difficult to change, certainly will give the taxpayer a clear representation of the cost of Good Governance in its strictest definition. In such a circumstance, the cost of the legislature, judiciary, executive and its bureaucracy can be defined as a percentage of Income collected as an Income Tax, with very few deductions having a flat rate, perhaps a means to encourage saving and premiums, more can be collected, where, avoidance, and evasion can be viewed as undemocratic, in that every citizens pays an equal share, and in paying more, gaining a further benefit.
It is the GST which Canadians can use to determine the value of the Goods and Services they consume, as they reflect on Social Programs, such as the Environment (our natural wealth), Health/ Safety, and our cultural heritage ( Education and Welfare). Using the General System Theory, we have the means to make this tax (the GST) variable, applied at all levels of production, so that the products, their externalities, are identifiable. Using such sophisticated mathematical models to actualise, and to factor these costs, will when described as a sum to the final consumer, will allow, in their choice, acts which may have the same cost to them, when comparing products, choosing a content of technology which is more, but having a lower amount of tax inherent in the total cost,
Consider two examples:
1. The refrigerator manufacturer will sum up the list of parts that goes into the product to determine its cost using two columns; one is the total costof each item, and one is the tax inherent in each item's cost. On the total, a profit is included, and on the tax an additional sum is added. Imported products that are in competition will be expected to pay the same amount of tax, if their product uses a similar technology. Most likely, the content of tax would be high in a present day refrigerator, because it is not environmentally friendly.The Canadian manufacturer (and the competitors) however, now have new variables, in their accounting, the second column, to evaluate costs. It will be natural for new technology to be developed, which may have an equal total cost, but having a significantly lower tax content, because the machine is more efficient, and self sustaining; all its parts recyclable, without toxic waste.
2. A man walks into a Grocery store to buy a quart of milk, he is likely to pay a modest sum of tax on it.
The same man walks into a Restaurant, and orders a glass of milk, he will likely pay something higher. And if he was to order his milk in a Bar it would be significantly higher, especially if it was licensed to allow smoking as well.
This manner of accounting for externalities is possible. In Canada, it is possible because of the refined nature of our financial acumen in Government, in business, and in our daily lives; as well as our strong desire to represent the best of Humanity. In China, as it is in Cuba entirely possible because they have Communist governments, in which, we may be of help to them, because they have a strong desire to reform their societies to include Taxes on Income, and Consumption. For the EU, this tax system is vital as well.
Most importantly, it is possible to put a cost to the policies of the Nation, toward the betterment of our condition, and in a manner where the individual can commit to acts that lower these costs, by paying less tax.
Income Tax, as well as the GST are the means, primarily from which the government intends to gain its revenue toward expenses. What are they defining? Very little, frankly. Furthermore, the Income Tax is regressive as it is complex, subject to much avoidance, with its evasion a subject of much concern for the revenue authorities.
A fixed term of taxation, that is relatively low, and difficult to change, certainly will give the taxpayer a clear representation of the cost of Good Governance in its strictest definition. In such a circumstance, the cost of the legislature, judiciary, executive and its bureaucracy can be defined as a percentage of Income collected as an Income Tax, with very few deductions having a flat rate, perhaps a means to encourage saving and premiums, more can be collected, where, avoidance, and evasion can be viewed as undemocratic, in that every citizens pays an equal share, and in paying more, gaining a further benefit.
It is the GST which Canadians can use to determine the value of the Goods and Services they consume, as they reflect on Social Programs, such as the Environment (our natural wealth), Health/ Safety, and our cultural heritage ( Education and Welfare). Using the General System Theory, we have the means to make this tax (the GST) variable, applied at all levels of production, so that the products, their externalities, are identifiable. Using such sophisticated mathematical models to actualise, and to factor these costs, will when described as a sum to the final consumer, will allow, in their choice, acts which may have the same cost to them, when comparing products, choosing a content of technology which is more, but having a lower amount of tax inherent in the total cost,
Consider two examples:
1. The refrigerator manufacturer will sum up the list of parts that goes into the product to determine its cost using two columns; one is the total costof each item, and one is the tax inherent in each item's cost. On the total, a profit is included, and on the tax an additional sum is added. Imported products that are in competition will be expected to pay the same amount of tax, if their product uses a similar technology. Most likely, the content of tax would be high in a present day refrigerator, because it is not environmentally friendly.The Canadian manufacturer (and the competitors) however, now have new variables, in their accounting, the second column, to evaluate costs. It will be natural for new technology to be developed, which may have an equal total cost, but having a significantly lower tax content, because the machine is more efficient, and self sustaining; all its parts recyclable, without toxic waste.
2. A man walks into a Grocery store to buy a quart of milk, he is likely to pay a modest sum of tax on it.
The same man walks into a Restaurant, and orders a glass of milk, he will likely pay something higher. And if he was to order his milk in a Bar it would be significantly higher, especially if it was licensed to allow smoking as well.
This manner of accounting for externalities is possible. In Canada, it is possible because of the refined nature of our financial acumen in Government, in business, and in our daily lives; as well as our strong desire to represent the best of Humanity. In China, as it is in Cuba entirely possible because they have Communist governments, in which, we may be of help to them, because they have a strong desire to reform their societies to include Taxes on Income, and Consumption. For the EU, this tax system is vital as well.
Most importantly, it is possible to put a cost to the policies of the Nation, toward the betterment of our condition, and in a manner where the individual can commit to acts that lower these costs, by paying less tax.
