Comment: To: The President's Advisory Panel for Federal Tax Reform From: Ryan Kingsly, Administrator, The NESARA Discussion Board Advisory Panel Members: Attached is the National Economic Stabilization and Recovery Act proposal as proposed by Dr. Harvey Barnard, PhD. at the NESARA Institute at http://nesara.org. In association with the NESARA Institute, the NESARA Discussion Board has elected me to submit our support for this proposal in this attached draft that meets your comprehensive proposal guidelines for submission. We sincerely hope that the members of the panel would take a serious look at this draft, visit http://nesara.org/bill/ and consider reporting it to the President as a practical, viable, and transitional option for true fiscal and monetary reform. Sincerely, Ryan Kingsly Administrator The NESARA Discussion Board http://www.thewordfiles.com/nesara/ The National Economic Stabilization and Recovery Act as proposed by Dr. Harvey Barnard, PhD The NESARA Institute http://nesara.org/bill/ P.O. Box 70 Greenwell Springs, LA 70739 (225) 634-3228 The NESARA Discussion Board An online community organization in association with the NESARA Institute elects the following submission by: Ryan Kingsly Administrator NESARA Discussion Board http://www.thewordfiles.com/nesara/ nesara@thewordfiles.com April 26, 2005 Summary "True tax reform is futile without reform of the current monetary system and its policies." This statement, written by Dr. Harvey Barnard (PhD in Applied Science with an emphasis in Systems Philosophy) has captured the essence of the current financial woes of our nation. Tax reform, though a nice bandage for solving things temporarily, does not in itself provide the remedy this nation needs to combat a rising deficit, a rising trade imbalance, a rising public debt, and rising inflation. Only by reforming both parts of our nation's economy, the fiscal policies, as well as its monetary policies, can the nation recover from decades of waste, bloated government budgets, personal spending habits, and continual cycles of serious recessions that hurt our economy and our national strength. No one change is perfect, and the changes that do need to me made are too extensive as to be practically applicable in any single administration. What is needed is a transitional solution. Not a band aid. Only the National Economic Stabilization and Recovery Act as proposed by Dr. Harvey Barnard at the NESARA Institute at http://nesara.org, has presented itself as the practical transition this nation needs, and we ask the President's Advisory Panel on Tax Reform to take a serious look at its proposal. Sincerely, Ryan Kingsly Administrator The NESARA Discussion Board http://www.thewordfiles.com/nesara/ The National Economic Stabilization and Recovery Act as proposed by Dr. Harvey Barnard, PhD http://nesara.org/bill/ Contents of Proposal for Comprehensive Reform Identification and Cover Sheet Summary Contents of Proposal I. Description of Proposal a. The Tax Base b. Exemptions, Deductions, Credits, and Exclusions c. Tax Rates d. Distribution of Tax Burden i. Provisions for Relief of Low Income Individuals e. Treatment of Charitable Giving f. Treatment of Home Ownership g. Collection Methods h. Treatment of Businesses II. Impact of Proposal Relative to Current System a. Simplicity i. Transparency ii. Stability b. Fairness c. Economic Growth and Competitiveness d. Compliance and Administrative Costs III. Transition, Tradeoffs, and Special Issues a. Impact of Transistion b. Tradeoffs c. Special Issues and Considerations IV. Conclusion I. Description of Proposal This proposal will primarily focus on the fiscal reform provisions of the full NESARA draft at http://nesara.org/bill/ a. The Tax Base All non-exempt retail transactions performed within the jurisdiction of the United States. b. Exemptions, Deductions, Credits, and Exclusions i. The necessities of life are excluded from the consumption tax. The necessities of life are defined as groceries, rents, leases, insurances, and medical services. ii. Charities are exempt if their purchases are for non-profit, non-competitive use. iii. Initial issues of stocks and bonds are exempt. iv. Government purchases are exempt. v. Government services such as licenses, passports, etc., are exempt. vi. Bake sales, garage sales, and other small ventures, as long as they are not commercially frequent activities are exempt. c. Tax Rates i. A revenue neutral National Consumption Tax Rate of 14% ii. Secondary Sales of Securities Consumption Tax Rate of 1.4% (10% of National Consumption Tax Rate) iii. Gaming Sponsors Gross Profits Tax: 8% (since gaming is a licensed activity, government is considered a partner, therefore players are not taxed, only the profits of the gaming sponsor) iv. Social Security and Medicare income taxes remain in effect until Congress decides otherwise. d. Distribution of Tax Burden i. Spending decisions determine level of tax burden. Under this system, poor people, spending most of their money on the essentials pay little if any tax while the rich, who buy more cars and eat out, pay lots of tax. e. Treatment of Charitable Giving i. The loss of the income tax removes the deductible incentives, however some of this loss is recovered by the government issuance of Credit Certificates to donors to qualified non-profit organizations equal to 10% of the amount over $250. These Credit Certificates are used to pay consumption tax obligations, and can be transferred on the open market. ii. Businesses do not have to charge consumption tax for purchases by a registered nonprofit organization if the purchase is for a nonprofit use, or noncompetitive commercial use. f. Treatment of Home Ownership i. Buying a home is considered a qualified retail event applicable to the National Consumption Tax. ii. Used homes have a taxable base of only the difference between the original purchase price and the new selling price. Whereas new homes are taxed at the full purchase price at the time of sale. iii. Compound interest on secured loans is eliminated. Only simple interest is allowed to be collected as a monetization fee. iv. Principles are required to be paid first before banks collect their monetization fee. v. These changes are retroactive on all secured loans. g. Collection Methods i. Initiating a non-exempt retail transaction makes one an agent for collecting the sales tax due for that transaction. ii. The sales tax is due at the closest regional bank by the 10th day of the following month of the month the transaction occurred. h. Treatment of Businesses i. Businesses are treated as agents of the national sales tax service. They collect sales tax on taxable goods and services and remit their payments by the due date. ii. Businesses have the ability to acquire new secured loans without the inherent instability of a compound interest loan equation, as all secured loan payment plans always end in 0 since under NESARA, principles are paid first. This has the effect of generating fewer bankruptcies due to defaults, and increases the ability of businesses to expand and create jobs. iii. The elimination of the income tax will dramatically reduce the costs of goods and services provided due to the inherent nature of the embedded costs of the income tax (or any other tax system that adds a tax throughout the process of making a good or service). Estimates place this hidden embedded cost reduction at up to 30%. On top of the monetary reform provisions of NESARA, that is why we believe a 14% rate is conservative revenue neutral rate. II. Impact of Proposal Relative to Current System Compared to the current system and other proposals, NESARA is the simplest, fairest, and takes into account the moral need to provide for blind tax exemptions on the necessities of life. a. Simplicity A flat 14% sales tax on the non-essentials of life is simple, especially when compared to a confusing eight volume work of the current income tax code. A flat national consumption tax is easy to manage as a single percentage. All other exemptions and exclusions and special provisions of NESARA are tied to that number, making adjustments easy and understandable. i. Transparency: The true cost of government is reflected in a simple, flat, national consumption/sales tax. ii. Stability: The monetary reform provisions of the NESARA proposal include the stability of our monetary system as its chief priority. A flat national consumption tax is a stable, easily manageable system if simple over-the-counter exemptions are included. Ultimately, however, it is the author's opinion that true stability can only come with a reformation of our monetary system as well. Please check out NESARA's monetary reform provisions here: http://nesara.org/bill/part1b01.htm b. Fairness NESARA is blinded to individuals' incomes. If the good or service is not necessary for living in the United States, then that good or service must be taxed. The rich, who pay more than just for the necessities, buy more goods and services that aren't considered necessities for living. NESARA provides Congress the freedom to legislate what is exempt and what is not. Also an arbitrary, intrusive, expansive, and expensive national rebate program is avoided altogether with simple, over-the-counter exemptions on the necessities of life. c. Economic Growth and Competitiveness The monetary reform provisions of the NESARA proposal returns a benefit to the economy that is just to great to measure. It is estimated that $1 trillion of the national debt would be eliminated, and approximately $500 billion in bank reserves would be available for lending. A national consumption tax would also tax imports equally, however with the hidden costs of the income tax eliminated from purchases (calculated to be as high as 30% of current prices), domestic prices will fall and subsequently be more competitive versus imported goods and services. NESARA projects a modest 2.5% productivity growth per year, which equates to a doubling of the standard of living within a 20 year period. It is believed that other nations would have to adopt similar fiscal and monetary system just to keep up with the United States. d. Compliance and Administrative Costs i. Compliance is mandatory for all non-exempt commercial transactions. ii. Evasion is harder since it will require more than one party to evade paying the sales tax. iii. If the national tax service believes the tax has not been paid on a non-exempt commercial transaction within the jurisdiction of the United States, the parties named in a warrant of deficiency only have to produce a receipt of the transaction proving the tax was paid, or provide books and records concerning the transaction. iv. Investigation of continuing fraud becomes a mere matter of a tax agent making a purchase and verifying the tax was paid. v. Administrative costs for the transition to the fiscal provisions of NESARA are relatively small. In fact, the tax service might find themselves with not a lot to do, and hence a smaller budget. vi. An expensive government rebate program is avoided entirely with over-the-counter exemptions on the necessities of life. III. Transition, Tradeoffs, and Special Issues It is believed the transition costs of both the fiscal and monetary provisions of the NESARA proposal are only the cost of printing new letterhead, new currency (monetary reform provision), and the elimination of current IRS staff. a. Impact of Transition The impact of converting the fiscal system of the United States to one proposed by NESARA would see a dramatic increase in tax compliance, competitive downward pressure on prices versus imports, and an increase in the value of used homes, helping to put an end to urban blight. The benefits are just too numerous to list here in full. b. Tradeoffs a. People no longer have to fill out forms to discharge their tax liabilities. b. The government does not have to keep yearly tabs on the income of the people (assuming of course the Social Security and Medicare income taxes are not referred to in this proposal). c. A national rebate program is avoided, and so more government spending avoided. Special Issues and Considerations The monetary reform provisions of the NESARA proposal provide for sweeping, positive changes to our current monetary system, the benefits of which are incalculable in terms of its prosperity to the economy of the United States. Since true tax reform is futile without reforming the monetary system, it is concluded here that the President's Advisory for Tax Reform visit http://nesara.org/bill/ to find out more. The effect of the changes would become apparent overnight. Taxes would cause prices to increase dramatically by at least 14%, but at the same time, businesses no longer have to collect income taxes from their employees and so they pass on the savings to their employees who receive a larger paycheck. Prices for non-exempted items and services become temporarily inflated. Over time, as cost-reductions are realized, prices come back down slightly and stabilize. The costs for the basic necessities of life stay the same or become cheaper. The standard of living for the working poor increases almost immediately as a result since they are not largely affected the new national consumption tax, but are freed from the government intrusive income tax. New home sales will skyrocket before the bill becomes law. Once the bill becomes law, immediately the cost of buying a used home becomes immediately more appealing. NESARA's new loans equations become retroactive (a provision for NESARA to guarantee fairness when compound interest is eliminated on secure loans). Some homeowners who are in the 17-20th year of paying their home, under the NESARA equations that are applied retroactively, many may find themselves with their home completely paid for, or very nearly paid for. Immediately their discretionary spending increases. Banks will find that they have their reserves met faster as secured loans are converted to the NESARA secured loan equations. They all of a sudden have more money to lend. Some estimates place this amount at $500 billion nationwide. This new pile of cash can then become available for the community, for new loans, or new government projects if the voters decide to pay for them. If anything, the changes become deflationary, and the government will probably have to spend money the money to keep deflationary pressures low - further increasing national productivity if spending is increased. In short, NESARA is a win-win solution to the country's current monetary and fiscal problems, and we would like representatives from the government to take a serious look at the NESARA proposal at http://nesara.org and feel free to ask questions about it at http://www.thewordfiles.com/nesara/index.php There are many more transitional changes that take place that have not been talked about in this proposal, however we have tried to focus on the fiscal reform side of the National Economic Stabilization and Recovery Act in accordance with the proposal guidelines. IV. Conclusion We believe NESARA is the best proposal to date that is fair, equitable, and revenue neutral, and we would not be doing our job if we did not let the President's Advisory Panel for Tax Reform be made aware of it. We hope that someone on that panel takes a serious look at it. Please check the proposed bill and its detailed summary explanation at http://nesara.org/bill/index.htm Thank you. Sincerely, Ryan Kingsly Administrator The NESARA Discussion Board http://www.thewordfiles.com/nesara/index.php __________________________________________________ Do You Yahoo!? Tired of spam? Yahoo! Mail has the best spam protection around http://mail.yahoo.com |