Subject: Complete detailed tax reform proposal. Comment: To the members of the President’s Advisory Panel on Federal Tax Reform Attached is a short introduction to a tax reform proposal that has been under development by me for over 30 years and had its humble beginnings in 1975. Finally in April of this year 2005, when all the bugs were ironed out, it was filed as a patent application at the Patent Office. I forced myself to publish this tax reform idea in the form of a utility patent because that requires a greater degree of discipline in description because a main requirement for a utility patent is that it has UTILITY, that it is useful in the form in which it is presented to the patent examiner. The full explanation, of what I have named the UniversalTax, can be viewed at www.UniversalTax.com I hope that the members of the President’s Advisory Panel on Federal Tax Reform will find UTILITY in my invention and give it serious consideration. Respectfully, Alf Temme alf@fastexercise.com (818) 787-6460 This UniversalTax is the ultimate solution to taxation Worldwide, the silver bullet, the panacea A short description of the www.UniversalTax.com The revenue generated by the UniversalTax will substantially replace and can easily exceed the combined revenue currently created by all methods of taxation at all levels of Government (Federal, State, County, Local). For economic reasons, not subject of this explanation, some taxes should be excluded from the UniversalTax, such as property tax and possibly energy taxes. The UniversalTax requires no record keeping, tax form preparation, tax filing, audits involvement for individuals, businesses and corporations except banking related businesses that will be the front line establishments collecting the tax. Instead of a tax on income or a tax on sales, the UniversalTax is a tax on essentially all forms of payments made and payments received for any form of transaction. It is a small (around 5% for example) tax on the movement of money which is collected by banks at both ends of the money movement, half of it (2.5%) is collected by the “payment bank” and half of the tax is collected by the bank of the recipient of the money. Consequently the recipient only gets 95% of the total payment credited to his account. The total of 5% deducted constitutes the UniversalTax. In a modern economy about 99% of total monetary value of money transactions is done in a manner that involves banks enabling the payment of the money at one end of the transaction or enabling the receipt of the money at the receiving end of the transaction. A small percentage of transactions involve banks only on the receipt end of the transactions. These would be cash transactions where the receiving parties will deposit the cash in the bank. An extremely small percentage, less than 1% of total monetary value of transactions bypasses banks completely. The banks have all the needed electronic equipment and facilities in place already today to do the simple tax deduction on each side of the payment transaction. This tax deduction performed by the banks is electronically transmitted to a central government tax authority that in turn electronically distributes those tax receipts to governments at all levels (Federal, State, County, Local) that have legislated rights to a portion of the tax. The tax payers (bank account holders) are informed on their monthly bank statements of the totals of tax deducted from their account. Such reports may also be accessible over secure internet connections with properly encrypted data transmission. The best aspects of the UniversalTax reform proposal The best aspect of this tax reform proposal is that it can be tried out immediately with minimal cost without having to scrap all the current forms of taxation first. The 92 page proposal comes in a turn-key form that is ready for immediate implementation. The complete 92 page tax proposal can be downloaded as a pdf file Download . That makes this proposal much more attractive to the general public and legislatures alike because the system can be "road tested" independently in various regional areas or whole counties or States with minimal economic impact and very low cost. In fact such regional or Statewide tests can become ballot initiatives for approval by the voters. Then when the test has shown the UniversalTax to be an unmitigated success it can be gradually phased in while gradually phasing out all other forms of taxation that the UniversalTax is meant to replace. The UniversalTax can then be adopted and enacted by individual legislatures at different levels of government until public demand and pressure in all other government jurisdictions stimulates the Federal Government into adopting the UniversalTax as well by passing enabling legislation. A careful gradual phasing in of the UniversalTax is a very important aspect because it protects the economy to the greatest extent from economic upheavals. The gradual transition from all the other forms of taxation to the single UniversalTax should give the millions of people that are employed in connection with current taxation methods a few years of transition to prepare for other, hopefully more gainful, employment. This way these millions of people who are employed in tax related businesses are not abruptly faced with unemployment and the resulting economic hardship. Additional forms of compensation may also be provided to these employees that would be negatively affected by a transition from all current forms of taxation to the new UniversalTax system that does not require over 90% of this sort of employment any longer. More at Implementation Following are the greatest problems confronting this tax reform proposal 1. The number one reaction from people: "It sounds too good to be true. If this really would be possible then this taxation method would have been discovered and implemented a long time ago." 2. The number two reaction from people: "Your proposed single 5% tax can never raise enough revenue to replace all current forms of taxation for Federal, State, County and Local governments as claimed by you." 3. The third most often heard reaction: "Most people will start making cash transactions to avoid paying the 5% tax." 4. In the United States alone, at least 10% of the working population is employed in jobs related to taxation. These jobs have been created and exist exclusively because of direct employment in conjunction with one of the around 30,000 taxation authorities or employment created in the private sector that deals with some activity associated with the various forms of taxation. A large percentage of these people would find their purpose of employment eliminated by this new tax reform proposal. The opposition to tax reform and the desire to preserve the status-quo would be a very understandable reaction from all or most of these people. They would include all the "tax experts" and specially those employed by the various governments. Proper implementation of this new form of taxation would have to be carefully staged to preserve the incomes and livelihood of all of these people and businesses for at least a substantial number of years and in some cases a lump-sum compensation should be offered to make the transition smooth and with as little economic disruption as possible. Read at Implementation This constitutes a short introduction to the UniversalTax and a more complete description of the proposal is embodied in the website of its name www.UniversalTax.com If there are any questions please email to alf@fastexercise.com or call me or leave a message for me at (818) 787-6460 I hope that you can see the merit in this most elegant solution to our collective tax woes. Respectfully, Alf Temme alf@fastexercise.com (818) 787-6460 |