Posted on 02/20/2004 12:45:22 PM PST by Crossbow Eel
First thing that would happen is that I would ask my employer to pay me in cash and I would pay for everything in cash. That should knock out at least one level of taxes. If I could get my company to pay my big bills directly (like my mortgage and car) instead of paying me, I would save another 5%. It would be a very small step from there to just having the company own my house and car and let me use them. They could also provide for my food, medical care, entertainment, etc. to avoid any financial transactions.
Now compare two supply chains. One a big car company that owns coal and iron mines, smelters, metal shaping plants, oil wells, refineries, plastic factories, car assembly plants, and the dealerships. They would pay a total 5%. Compare that to a set of specialized companies each producing one custom item. That would mean 5% on each level of transfer. A huge advantage would be given to the vertically integrated companies even if they aren't the most efficient because they are so generalized. The little companies couldn't survive long. ADM would own the farms, processing plants and grocery stores.
The big speculative transactions in various stock and bond markets would dry up. They rely on 0.1% differences in prices. 5% would kill them, so that part of the transaction tax would never be collected, even if it was budgeted for. This is similar to the proposed Tobin Tax which had the twin goal of collecting huge amounts of money on foreign exchange transactions while reducing the number of transactions. You can't get both.
Overall, I would say that this is not only a bad idea, it would be abolutely destructive to the nation as a free country.
The only fair tax is a national retail sales tax. One tax at one level. Same rate for everything. Tax those who take from society through consumption rather than those who put into society through production and income.
< /rant>
I can't imagine that the tax situation in this country could be be corrected by just instituting a "transaction fee" on all electronic transfers, but I'm not a well-read tax guy.
How many times do you want to pay taxes on your savings and checking account?
Every transaction today is electronic at one stage or more in going from you bank account when you write the check, or equivalent in Credit Card to the bank of who ever is to receive money that you spend.
Often times their are multiple transactions to get funds from point A the place of payment to point B the guy who did the selling. The same is true of putting funds into your bank from wages and earning it.
It's called the ducks nibbling todeath. No on duck gets more than a crumb but by the time its all said and done, what was called some small fraction of a percent of one's dollar becomes 10 and 20 times that amount the cascading and multiple tax transactions.
Basically the transaction tax is a VAT on steriods. Everyone get skinned alive & no-one can ever figure out just how much it has cost them. Socialist governments that like to grow love em.
Would a cash transaction include depositing my paycheck into my checking account?
Yes as well as taking it out again to spend it.
It is hit when the company you work for sends it from their bank,
It is hit when your bank receives it,
It is hit when it leaves your bank when you spend it,
It is hit when it arrives at the retail store's bank account.
Multiply that time every kind of transaction for goods, investment .... in the United States and realise that even if it doesn't come immediately out of your account all the time, it will get you anyway when it is passed back on to you through the price you pay for all your goods and services with all the transactions taxed built into them.
European Socialists and love this tax.
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