Electronic Flat Tax
10 Tax Principles
President's Tax reform
Full Text
Q & A
More Detailed Explanation
Related Tax Proposals
Comparison to credit cards
Helping The Poor
Other Unrelated Tax Ideas
Economist 2006-0518
National Debt
Big Brother Watching
Tax created crimes
Taxes and the Constitution
Email Questions and Answers
An email I received

This proposed new system of taxation requires no accounting, no filing of tax forms and no audits and it will collect revenue in excess of what the IRS and all 30,000 other taxing agencies at lower levels of jurisdiction collect together. In addition it is a revenue stream that is very stable and not subject to the large up and down swings experienced by all current forms of taxation when the economy goes up or down a few percentage points. There will neither be large government budget shortfalls nor surpluses  because of the extremely stable, secure and predictable tax revenue stream, even in economic recessions or economic booms. 

The biggest problem with new ideas in politics and economics is that they are a challenge to the "Status Quo". People in power will allways defend the "Status Quo" against all new ideas because they benefit most from preserving the "Status Quo". The majority of the general public fears change of any kind and therfore opposes any new ideas even when they are suffering from and complaining about the current system. New ideas are always a call for action against the "Status Quo" and risk averse people are not going to act in support of change anytime soon. Only when an economy takes a very deep nosedive and the general public suffers immensely, only then are people willing to listen to new ideas that would take the power away from the people in power. So read these two ideas  so that you are ready for action when the people in power have pushed you to the point where you are not "taking it anymore".    

So here are the two ideas that will create prosperity for all and take the power away from the 0.1% of the people who play by the "Golden Rule": The Golden Rule is "Those who own the Gold rule".

www.AutomaticTax.com and www.EndingRecession.com

1. AutomaticTax eliminates Federal Taxes, State Taxes, all local taxes at County and Municipal levels and rolls them all into a single excise tax of a very low percentage. And that single excise tax collects more revenue than the over 30,000 taxing agencies it replaces. It meets the total budget needs of all levels of Government combined.

2. No accounting has to be done for this tax, saving millions of unproductive hours that can be devoted to more productive work.

3. Not a single tax form has to be prepared because no person or business has to be accountable to any taxing agency any longer and consequently no person or business will ever be subject to an audit.

4. There is no longer any need for the enormous invasion of privacy that is part of the conventional methods of taxation.

5. The total time spent in relation to the effort of taxation or revenue collection is exactly ZERO.

6. The 30.000 taxing agencies with all their different forms of taxation have created between 12% and 14% of total employment in the United States. All of this employment is unproductive employment that does not produce any products or services that consumers desire to purchase.


You can easily see why such a fantastic tax reform proposal would not get any support from people that would like to preserve the Status Quo. These proposals will not be taken very seriously by most people who think that they know enough about taxation and economics to know that it sounds too good to be true. Besides, they will immediately argue that if such an ideal system could exist, that the Federal Govenment would have implemented it a long time ago. They are totally wrong, because any governments never do what is good for the total population. They only do the things that are good for the special interests that pay the corrupt politicians for their votes that create laws that are favorable to these special interest that are ruling the whole economy with their checkbooks.

So how is it that such a supposedly brilliant tax proposal has not been implemented yet by at least one of the 195 countries in the World? There are two main answers to that question:

1. Experts in any field of knowledge will most often oppose anything that is new because new things are different from their standard beliefs and therefore challenge their expertise. They just know that there could not possibly be anything better than what they currently believe in. Experts in any field of expertise behave in this same way, opposing everything that differs with their current beliefs. They will not even want to spend their precious time to investigate something that differs with their current beliefs. I have written a website on this standard expert behavior www.GuardiansOfTheStatusQuo.com. There are millions of people that benefit from keeping things exactly as they are and any change might upset the apple cart and threaten their current benefit from the "status quo". A cautionairy warning from Niccolo Machiavelli (1469 to 1527) author of "The Prince":
"There is nothing more difficult to plan, more doubtful of success, or dangerous to manage than the creation of a new system… for the initiator is the enemy of all who profit by the preservation of the old system."  Machiavelli

2. Experts most definitely will oppose any ideas that sound too good to be true. The media and the general public rely upon experts and have little or no will or opinion of their own to create change. Too risky for them and most people are very risk averse. These days the only chance is for things to go "viral" on the internet.

This spirit of vigilant oversight by the governed and the will to pull away from the taxation by a very remote George the Third was well and alive in 1776 and it led up to the Declaration of Independence the text of which includes:

"That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed, — That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government." 

This tax reform proposal is not just another tax reform plan that has no chance of ever being implemented. There are many taxreform organizations that have tax reform proposals that will not solve the main problems that plague many tax systems. Their loyal supporters expend a lot of energy and money on ideas that are dead on arrival.  I believe that if the leaders and followers of all these tax reform organizations were to understand this excellent AutomaticTax proposal here, that they would adopt it as the tax proposal to lend their support to. There is no question that maybe most tax reform proposals would be an improvement over the current 75,000 page IRS tax code disaster. The current tax code is such an enormous disaster because it is a collection of corrupt laws and regulations written by and paid for by a small group of special interests that profit by it at the expense of the 99.9% of the rest of the population. 

The United States may be the country with the worst tax system in the World. The largest and most prosperous economies wind up with the worst and most complicated tax systems because there is so much more to steal by the special interests. The reason for this is the fact that the larger an economy is the more it has large numbers of powerfull special interests that employ lobbyists to turn the tax systems into their favor and they use the tax system to indirectly plunder the economy to benefit their own ends at the expense of all others.

People in many different countries consider their own tax system as being the worst one because they have the most knowledge about the tax system in their own country. Many countries and their economies are suffering under the near criminal monstrocities that were created by special interest efforts that have manipulated the legislators in their respective countries to pass tax legislation that favors the groups that have bribed their politicians most.

But if we are going to reform the way in which we are collecting tax revenue for the different levels of government in all countries, we might as well do it right and find the absolute BestTaxReform rather than throwing our support behind any of the different tax reform proposals that are promoted in various countries around the Globe.

Most of us have gotten very bored with tax reform proposals. Over the past 40 years there have been many proposals for tax simplification and a lot of enthusiastic public support was wasted because absolutely nothing has happened. To make matters worse, the only response from government to all these tax reform proposals has been additional tax complication.

Thus there are many tax reform proposals around but none of them have much chance of succeeding to replace the monstrous 75,000 page IRS tax code we have allowed our representatives in Washington to create for us.

Are these people in Washington realy our representatives? Or are they representing the special interest groups that buy their way into our pockets? Many special interests have paid multi millions in political campaign contributions and they have spent additional millions for thousands of Washington lobbyists to create this tax monstrosity.

Nothing in the way of tax reform will happen if we leave it up to our elected representatives that have created this unbelievable mess in the first place. I propose a National Tea Party. 

Not very likely that these special interests will allow all that big investment in tax loopholes to be replaced by a simple sensible new tax system no matter how brilliant such new tax collection idea might be. All those people that worked so very hard on creating the 75,000 page IRS tax code and paid for it with millions of dollars are not bad people or villains, they are just people doing their best to look after their own interests and they take advantage of all means to improve their economic advantage. If everyone in society were to look out for their own best interests and were willing to spend effort and time doing it, we would not have such a monstrocity for a tax system and we would soon have a National Tea Party and reform this tax mess. These days there is not much left of the public vigilance that resulted in the Boston Tea Party and the Declaration of Independence.

So it is that we have to blame ourselves for this indescribable tax mess. We have been unwilling to look out for our own best interests. Our excuse for this inaction on our part has always been that the powers that lead us by the nose are far too powerful and that no one single person could possibly create any meaningful measure of change. That is a cheap cop-out because history teaches that it is always single individuals that have initiated the big changes. There are examples abound to prove this enormous power that single individuals have to change the World in a big way. A good working model to initiate these big changes seems to be the initiation of 12 helpers/followers that can spread the message to many other people that in turn spread the message further. A sort of multi-level marketing model without direct monetary reward but a big reward for all when the project has been completed.

You as an individual have that power if only you were willing to act. The reason why people have been so lax on keeping their governments from doing stupid things is because they have bought into the propaganda that has been sold to them on the idea that they are powerless against the forces and abuses of government. Think again! You have the power to help change things in a big way if only you would believe in that power and act upon your belief.

The tax proposal on this webste is indeed brilliant, but what can we do to actually get it implemented? Appealing to the members of Congress will not do much good. So what will? Only a grass-roots referendum will have a chance of success if only the general public were as vigilant as it was during the Boston Tea Party. It will take nothing less than a National Tea Party to get the job done.

Of course talk is cheap and just saying that this is the most brilliant tax proposal does not necessarily make it so. So let's first have a look at this supposedly brilliant tax reform proposal before spending any substantial energy trying to get it implemented.

For starters, it does not help that this tax proposal sounds too good to be true. So brace yourself and do not walk into the following major traps that people generally bumble into:

1. If this tax is as good as it sounds why has it not been backed by most major economists and other such EXPERTS? (for the answer look at  http://www.GuardiansOfTheStatusQuo.com/).

2. The proposed very low tax rate could not possibly bring in enough revenue to offset all the taxes at all levels of government that it is proposed to replace. (read properly and do the math for your answer).

3. The cash economy will go into overdrive to avoid this tax. (Sorry, wrong again, because the cash economy will actually shrink a great deal over what it is under the current tax systems).

So here is the short version (the long version is elsewhere on this website):

1. All taxing agencies at all levels of Government and all their complicated labor intensive paperwork will be replaced by this single low 5% AutomaticTax.

2. Individuals as well as businesses and corporations need not do any accounting, nor preparing and filing of tax forms. And no audits are ever done and they would be near impossible when accounting is not a requirement for individuals and businesses alike.

3. Every bank account holder, whether individual or business, will get a monthly statement of how much tax was paid by the individual or business.


Q1: How is this RealistTax collected?
A1: The banks will collect this 5% tax by deducting 5% from all deposits made into bank accounts, crediting the accounts with the remaining 95% of the total deposits submitted. The banks will receive more Federal supervision than they now have with randomly rotating supervisorial staff.

Q2: How can a mere 5% exise tax deducted from all deposits be enough total revenue to replace the revenue currently collected by all taxing authorities at all levels of Government combined?
A2: Strange as it may sound, only 3.9% excise tax on all deposits will already collect more revenue than all these taxing agencies do att all levels of jurisdiction (there are currently more than 30,000 taxing agencies in the United States). This AutomaticTax proposal is for an additional 1.1% tax for a total of 5% to be able to pay off the national debt and pay off all bond issues at all lower levels of Government as well.

Q3: How will the combined revenue be distributed to all the different levels of jurisdiction?
A3: The banks in every State will electronically transfer the collected excise tax revenue to a State Revenue Disbursement Office (each State has a single Revenue Disbursement Office). These State Revenue Disbursement Offices will distribute the revenue to all the Governments at different levels of jurisdiction within their State, including the State Government, and transfer a fixed percentage of the total to the Federal Government.

Q4: It must be expected that cash transactions will look very attractive to evade this tax and that there would be a vast increase in cash transactions. How is this cash tax evasion kept under control?
A4: Cash transactions will be far fewer than under our current IRS income tax system because the "reward" for evading taxation is very small (only 5% that has to be shared between two cooperating parties) and the penalty is heavier and more certain than under the current tax system. 

Q5: Is there any form of record keeping done to be able to at least exercise some control?
A5: All transactions must be documented, but all transactions (deposits) that are done via a bank are automatically deemed documented. Cash transactions must be reported within 14 days after the transaction date on a declaration form available at any bank. Those declarations are to be presented to a teller at a bank and the 5% tax is to be paid at that time. Of course fewer than 1% of cash transactions will actually be reported and the government really does not care about the millions of small cash transactions that take place every day. The only cash transactions the governments would take an interest in are those when Boeing for example were to start selling their airplanes for 80 suitcases full of hundred dollar bills. The vast majority of cash transactions are not reported under our current tax system. Fact is that cash has only a lifespan of less than 2.9 cycles before it is deposited in a bank. When a check is cashed the bank will deduct 5% and when cash is deposited the bank will also deduct the 5% tax. This means that through cash transactions the government loses tax revenue on only 0.9 cash transaction cycles out of the 2.9 cycles. Under the current tax laws the monetary reward for tax evasion is far greater than the 5% that the two parties to the transaction will share (2.5% each). Under the current tax laws large efforts are made with offshore banking and all manner of investment schemes to avoid and evade taxation and all these schemes are not worth the effort for the meager 2.5% reward from playing games under this new AutomaticTax proposal. 

Additional difficulties in trying to get this RealistTax implemented:

It sounds too good to be true. The dumb reasoning goes that If this simple tax would really eliminate all taxes at all levels of government and require no accounting or filing or audits that it would have been implemented a long time ago. I have to suffer a lot of other dumb arguments as well. 

Another big problem is the complete apathy of the taxpayers. Over two decades ago taxpayers were so upset about a 10% tax on tea that they had a "Boston Tea Party" and this eventually resulted in the separation of the colonies from England and the start of a new country, the United States of America. But today any tax reform proposal to get rid of the 65,000 page IRS tax code is met with a big yawn and dumb arguments why tax reform will never happen.

Another problem are so called "experts" (economists, accountants, tax consultants etc.). When asked for their opinion about a 5% tax that eliminates all taxes at all levels of government and eliminates all the work and drudgery that comes with current taxation, they will not even bother to inform themselves, read anything about it before giving their negative opinion or even ridiculing this brilliant tax proposal. 

The fourth and not least of the problems are the many powerful special interests that worked very hard for many years and spent millions of dollars in lobbying and contributions to members of Congress to create this almost criminal 65,000 page mess of a tax system. These special interests will fight very hard to keep the tax system the way it is and try to even complicate it some more for their own gain and at the expense of all the rest of us.

There is little of the dedication, vigilance and hard work left that it takes to keep an ever growing and abusive government from wrecking a once great country. The Founding Fathers were keenly aware of the abusive powers of an ever more powerful government and they wrote into the Constitution many safeguards that were to give the People of this great Country the weapons to defend against such Government power grabbing and abuses. The lack of willingness  to defend the Constitution is the reason why governments will deteriorate over time. Help to reform this government one step at a time. Start with this tax reform to eliminate the current 65,000 pages of IRS tax code. The original Constitution does not permit the current tax code. So lets turn tax collection at all levels of government into this sensible simple form of taxation that is fully supported by the Constitution and that will save the economy $900 billion per year (yes billion, or $7500 per year per family in year 2002 dollars). 
Here in short is my tax system that is fully supported by the Constitution while our current tax system is in violation of the Constitution (click on "Taxes and the Constitution" in the left margin). A more detailed explanation is at "Full Text".

1. This tax will replace all taxing agencies at all levels of government  with a single tax that requires no IRS and other taxing agencies at lower levels of Government. It will replace a total of over 30,000 taxing agencies in the United States alone (Federal. State, County, Municipal, etc.).

2. This revolutionary tax system requires no accounting for individuals or businesses and no record keeping of any kind by individuals and businesses.

3. It requires no reporting or filing of tax forms or other methods of tax filing.

4. There will be no audits.

5. This tax is a very low 5% or less (even as low as 3.9%) on ALL money transactions and these 5% are collected by the banking system with rigorous rotating government supervision. The banking system is generously compensated for these collection services with a small percentage of under 1% of the total tax collected .

6. This tax reform proposal has been submitted to the United States Patent Office for a Utility Patent application to demonstrate that it has indeed UTILITY, that it can be very easily implemented and that it will have fantastic economic benefits for the countries that will adopt it.

Taxation should be a very simple task with a simple objective. The simple task is the collection of money and the objective is to a all times fully fund the budget requirements of all governments at all levels of jurisdiction.

If you thought that tax reform might be as simple as coming up with a brilliant idea, then you would be terribly disappointed to find that absolutely nothing will happen to implement such brilliant tax proposal.  There are simply too many very powerful and corrupt special interest that would fight very hard to keep the tax codes at least as complicated as they are today and make additional efforts to even complicate them some more.

It is easy to understand why and how every country on Earth has fallen victim to the idiotic tax systems they currently are suffering under. The problem lies, as with most government problems, in corruption of the system where the average citizen has not enough education or insight to be able to be vigilant enough to oppose or reduce the corruption. Tax code complication is driven by 4 main special interest groups that gain great advantage from manipulating the tax codes to their political and financial advantage. Taxation in most countries has become a political football with which the politicians seek to model their social and economic agendas while often lining their pockets with contributions (bribes) paid by special interest groups that seek favorable tax legislation that gives them economic advantage in the marketplace. Follow the money!

Does this mean then that the prospects for tax reform are hopeless and that we, the taxpayers, should give up and do nothing? Not at all. To successfully promote any tax reform there must be a thorough understanding of the forces that would oppose the tax reform and there must be guidelines on how to deal with those corrupt special interest forces. Also there must be a good understanding of the purpose of taxation. Only a very  slow and gradual implementation of a new tax system will avoid large scale unemployment and other disruptive economic consequences during transition from a current labor intensive tax system to my new system of taxation that is simple, effective and with minimum burden to the economy.

The biggest problem with my brilliant tax reform proposal is to get people interested in promoting it. That this tax reform sounds TOO GOOD TO BE TRUE does not help much in the "marketing" of this tax reform. In fact it sounds way too good to be true. It sounds too simple and it sounds like there must be major flaws with it somewhere, because most people's reasoning is that if this tax would really work then it would have been implemented a long time ago.  That is one of the nonsense arguments used against many brilliant new and simple inventions.  I had the same problem with the 4 minute per day exercise machine I am manufacturing (www.FastExercise.com).  

The four main corrupt manipulators of tax codes are:

1. Politicians
They use the tax system to aid their many political agendas. Socialist politicians will introduce tax legislation that will benefit their socialist constituents in order to get more votes at election time. Conservative politicians will introduce tax legislation that gives economic advantage to their capitalist constituents and even socialist politicians will support capitalist tax legislation if the lobbyists pay them enough for their votes.

2. Non prifit organizations
So-called "non-profit " organizations try to gain non-profit status and they would oppose any tax reform that reduces their relative advantage.

3. Multinationals and lother large corporations and industries
Large industries and multinational corporations employ armies of lobbyists to twist the tax codes to their own economic advantage.

4. International accounting houses
Large International accounting houses such as Price Waterhouse Cooper, Earns & Young etc. and large international tax attorney offices will gladly assist and advise the 3 interest groups above to help each of them them turn their tax-law objectives into tax legislation proposals. The aims and tax objectives of all these diferent interest groups are of course very often sharply conflicting with each other but that does not bother the politicians and international accounting firms one bit because that will complicate the tax codes into the mess they are which is all to the advantage of the international accounting firms and tax-law firms because it adds billions in yearly billings to large and small corporations that cannot possibly deal themselves with the very complicated tax mess that was deliberately created with the active and creative assistence of these accounting houses and tax law offices. Whenever any form of tax legislation is proposed or debated by any legislative body at any level of government jurisdiction tax "expert" magically show up to testify and these tax "experts" do not get paid by the legislative bodies for their testimony. These "experts" show up entirely for free, or do they? Who pays for their travel, hotel and expenses and of course their time? These "experts" are quite often University Professors in economics with impressive credentials that push these tax complications that have resulted in tax codes that often are thousands of pages long.  The USAs IRS tax code is variably rumored to be over 75,000 pages long. The additional 30,000 separate taxing agencies in the United States have all tax codes of their own that together surely fill over a million pages of tax legislation.  

The people of the USA and all other countries on Earth have a very bright future if they just were to understand how the economy works and if they develop the will to implement my tax reform measures to optimize their economies.

One of the most important factors in improving the economy is to facilitate/steamline free enterprise by simplifying all the government controlled interactions with the governed. Unfortunately most governments tend to totally ignore the need to streamline the economy and instead they complicate all the systems they have under their control. One of these systems under government control is taxation. Taxation could be one of the simplest systems run by government but it is deliberately complicated by many special interest groups and it places a tremendous unnecessary economic burden on the economy of most countries. 

The sole purpose of taxation should be the collection of funds with which the governments at all levels of jurisdiction finance their expenditures.

Instead the tax collection in the richest economies has become a political football and a vehicle with which lobbyists create tax complication for the benefit of special interests that pay lobbyists for promoting tax advantages for their clients that pay them big money for laws that help them AVOID taxation. This is how it has come to be that the IRS tax code is rumored to consist of over 65,000 pages of code. The result is that in the USA neither "the poor" nor "the rich" pay hardly any taxes and the total tax burden is on the middle class and the upper middle class. This middle and upper class retalliates by requiring higher incomes for themselves to compensate for their lopsided tax burden.  

There are over 30,000 taxing agencies in the United States (yes you read that correctly) of which the IRS and the individual State Tax agencies are only 51 of the total. All these taxing agencies place a tremendous burden on the economy with all the accounting and paperwork requirements and that certainly does not facilitate/streamline the economy. 

This tax reform proposal takes a novel approach and it is currently posted on the website of the US Patent Office because the author, Alf Temme, of this tax reform proposal has applied for a patent on it and the US Patent Office found it worthwhile enough that it has accepted it for examination and has assigned it to a patent examiner. Go to the US Patent Office website and fill in the below application number 10/907480 to see the filing.

Submission Type: Utility Patent Filing
Application Number: 10/907480 *10/907480*
EFS ID: 81429
Server Response:
Confirmation Code Message
ISVR1 Submission was successfully submitted - Even if Informational or Warning Messages appear below, please do not resubmit this application
ICON1 4480
USPTOEFSNotice For assistance with e-filing a patent application, contact the Patent Electronic Business Center: Toll-Free Number:1(866) 217-9197 Website: http://www.uspto.gov/ebc/
First Named Applicant: Alf Temme
Attorney Docket Number: TEM 0401
Timestamp: 2005-04-01 19:00:58 EDT
From: us

So what about the credentials of the author? Not very impressive. I am a mere manufacturer of a piece of very expensive exercise equipment (www.FastExercise.com) and have been variably accused of cybersquatting in several domain name related disputes. No degree in economics, no credentials in tax related matters. Yet it has been called the best tax reform ever proposed by experts of economics that actually took the time to read it.

So either this tax proposal is just another one of these useless ideas such as all those that have been proposed in the past by highly credentialed professors of economics or it is one of those flashes of brilliance that on occasion come from non-credentialed people. Those flashes of brilliance are the ideas that are generally immediately dismissed as useless by the community of "experts" in all fields of knowledge see why at:(

All other Tax Reform Proposals have fizzled like wet fire crackers and have drained us from all our enthusiasm for any sort of tax reform. 

Sounds too good to be true? Read on, it is absolutely true and it will save the United States economy at least $900 billion per year (in 2002 dollars).

This form of taxation applies to all countries Worldwide, but I am explaining it here as it applies to the United States.

What could be so different with this tax proposal that it should merit the serious attention of the media and legislators everywhere?

The reason why I submitted it for a utility patent application is the very fact that a utility patent must have UTILITY (the condition of being useful). This is in contrast to most other tax reform proposals that have no useful purpose at all because they cannot possibly be implemented without creating an instant economic depression or even total economic collapse.

The problem with all these other proposals is that they create big economic consequences during transition from the current system to any new proposed system by eliminating a lot of jobs in accounting, tax collection, auditing, tax preparation, etc. Lots of unproductive jobs, but jobs nevertheless that support families and provide employment that supports the economy.

Transitions must be done very slowly and gradually over a long period of time so that the elimination of the useless jobs occurs over a period of many years. My tax elimination proposal provides for transition over a 20 year period and does not create these negative economic circumstances. 

This tax proposes to eliminate all taxes at all levels of government that currently require accounting by individuals or businesses and replace the total revenue collection for all these tax jurisdictions combined with a simple 3.9% to 5.2% tax that will require absolutely no accounting or record keeping from individuals and businesses. No tax returns need ever to be filed and nobody will ever be subject to an audit.

Yes, I know, it sounds absulutely too good to be true and a tax of between 3.9% and 5.2% sounds impossibly low to replace the entire revenue currently collected by all those tax collection agencies at all levels of government.

Yet, it is totally true and correct. No mis-calculations here. Trust me. You just have to read the full proposal on this website to fully understand the simple genius of this tax proposal.

Why bother with a patent application for a tax proposal?
A utility patent will distinguish this  proposal from many other tax reform and tax replacement proposals that have little or no utility at all. 

A United States utility patent will likely give this tax proposal more respect with the media and boost its prospects for being taken more serious by legislators in the US and in other countries as well.

The United States has perhaps the most costly and complicated taxation system in the World with its 65,000 pages of tax code. It is difficult to understand how Congress allows this very costly burden on the economy to continnue and even adds further complications year after year. Of course all these poor politicians cannot resist the temptations from all the lobbyists on "K"-Street that have many clients that benefit from an ever greater complication of the tax code. 

It was a surprise to me that there are over 30,000 taxing agencies in the United States. Besides the IRS there are State revenue agencies, county taxing agencies and local city and other local tax offices. The total tax related employment in the United States hovers between 12% and 16% of the working population. This totally non-productive employment includes all the people working for these 30,000 tax offices plus some of the following:
1. Accounting offices.
2. Tax law offices.
3. Bookkeepers that keep records for tax related purposes.
4. Tax return services including storefront offices and online programs.
5. Printers of tax forms and the volumes of 65,000 page tax codes.
6. Producers of paper for tax related purposes.
7. Lumber companies producing the pulp for the paper making.
8. Investment experts that create tax shelters and tax avoidance schemes.
9. Companies that accomodate offshore corporations for the purpose of avoiding or evading taxes.
10. Judges and court related employment dealing with criminal proscecution of tax evasion and other tax matters.
11. Police and jailhouse employment to keep people in jail that were pronounced guilty in tax related matters.
12. Auctioneers that auction off the property of businesses that were closed as a result of tax related matters.

And the list goes on with university professors that teach classes on tax related matters etc. etc. Taxation has created an enomous industry that produces nothing and keeps a lot of people in employment and has created a lot of businesses that all create nothing but wasted human energy.

The total direct cost of taxation for all the points listed above runs between $450 and $600 billion per year (depending on which university study you believe). The indirect cost of taxation may add a similar amount to the total burden of work and wasted effort. It includes the burden placed on businesses by not being able to make business decisions independent of tax related considerations that hamper commerce immensely and cost the total economy further billions. The time involvement of millions of taxpayers and the mental burden associated with tax filing is at a great expense as well.

Spending some serious time reading this website will prove to you that taxes at all levels of government can disappear completely out of your life and that they can be combined into a single very simple tax for which you will never have to do any accounting, file any tax forms or be subject to an audit. That leaves DEATH as an inevatability, but you can even do something to delay death and stay a few years longer and spend more time in good health with
www.FastExercise.com , but that is an entirely different subject.

The "old" IRS Mission Statement prior to the "new" 1998 statement was quite idealistic and admirable:
"The purpose of the IRS is to collect the proper amount of tax revenues at the least cost to the public, and in a manner that warrants the highest degree of public confidence in our integrity, efficiency and fairness."

The "old" (prior to 1998) IRS Mission Statement projected good intentions. The problem was that the IRS could have never risen to the standard of its own mission statement. Direct and indirect costs to collect the "proper amount of tax revenues" could never be "at the least cost to the public" with such an incomprehensible and abusive tax code that numbers into the thousands of pages and is growing by thousands of pages every year. The IRS could never perform its functions in "a manner that warrants the highest degree of public confidence in (the IRS') integrity, efficiency and fairness."

The "new" most current IRS Mission Statement (dated Sept. 24, 1998):
"Provide America's taxpayers top quality service by helping them understand and meet their tax responsibilities and by applying the tax law with integrity and fairness to all."

This "new" mission statement is not much of a statement at all and it does not promise much: The "top quality service" spoken of here is limited to "helping them understand and meet their tax responcibilities" (as determined by the IRS) and "applying the tax law with integrity and fairness to all". This last part of the mission statement is again an impossible mission because the totally unneeded burden placed "on all" through the various taxation schemes and the loss of liberties and privacy involved in the process certainly constitutes "unfairness to all".

Following is a short introduction to Automatic Tax

1. Automatic Tax will replace all taxes at all levels of government ( Federal, State, County and Local) and replaces all of them together with a simple financial transaction service fee between 3.9% and 5.2%  (this already sounds impossible but it is true). I will use 5% as an example to explain my tax system here.

2. This unique tax collection process does not require any accounting or keeping of records because it is entirely electronically collected through the banking system. Banks will deduct 5% from all deposits made and will credit the bank accounts with the remaining 95% of the deposit. All the electronic equipment and most of the software is already in place at banks so that this system could be implemented at any time without much extra expense and preparation (careful now, don't try to think about details and reasons why this tax will not work, because in all likelyhood that which you are thinking about has been covered in detail elsewhere on this website, notably in the 92 page full text and 4 Flowcharts of the US Intellectul Property Patent that I did apply for.
http://electronicflattax.com/?PageID=167 I applied for the IP patent for reasons that it would force me to be under the constraints of the requirements for a patent application, namely that the patent MUST HAVE UTILITY, it must be a USEABLE invention and not just a philosophical musing like many other tax reform proposals are. I will never make any money with such a patent, it is merely a public service, a lobor of love and I hope that a lot of people can be motivated to help me get the attention that it deserves).

3. To prevent massive sudden unemployment in tax related jobs,  the tax will be gradually phased in over a period of 20 years. The tax will be phased in starting with a 0.1% rate the first year and increasing by 0.25% every following year. All the current taxes at all levels of government will be gradually phased out over the same 20 year period by gradually decreasing their tax rates with the total amount collected by this Automatic Tax. The exact rate of Automatic Tax needed to replace all those other taxes will be known more precisely after the first year of collecting 0.1% Automatic Tax. By simply multiplying the amount collected by 50 will reveal whether my calculation is correct that 5% will collect taxes in excess of the amount needed to replace all the other taxes.

4. No tax returns ever have to be prepared or filed. Nobody will ever be subject to audits. Banks will have government supervision (as they have today) and they will be amply rewarded for the tax collection function and the keeping of good records.

5. The only taxes that will remain are property taxes and energy taxes for primarily regulatory reasons (more about this elsewhere on this website).

6. This new system of taxation fulfills the only function any tax system should, namely to collect tax revenue at the least cost and least inconvenience. A tax system should NEVER be used as a manipulative tool with which lobbyists can buy favors from politicians to satisfy the economic and political objectives of the special interests they represent. Those efforts of corruption and collusion with politicians are twisting tax systems around the World into the extremely costly and inconvenient tax mess we are suffering. The United States
17,000 page 9 million word Federal tax code is most likely the grand prize winner for the most complicated, costly and wasteful tax system of them all. The reason for being the grand prize winner is that the United States is the largest economy in the World and so much more can be stolen from it through the lobbying efforts of the Special Interests and the politicians that will .

7. The direct and indirect cost of the US Federal tax alone is estimated at $900 BILLION 2005 dollars. Add to that the direct and indirect cost of collection and administration of the remaining 30,000 taxing authorities (State, County, Local Municipal). Automatic Tax will cost a maximum of $25 billion to collect and administer for all taxes it will replace.

8. There are specific exceptions to the tax. All transactions between bank accounts owned by the same account holder are exempt. All transactions involving financial instrument trading such as  international currency trading, bond trading, stocks trading, commodity trading etc. are excluded from this tax. For all other cases with merit for tax exemption can be submitted in the form of petitions for tax exemptions to special State administered tax refund offices.

If we want to improve the way we collect taxes in all countries around the World, we first have to establish some general rules and objectives for taxation in general.

Most people have opinions about what taxation should accomplish, but there is where the problem starts. Many of these opinions differ a great deal and are in conflict with each other. In other words, we have no consensus on what taxation should accomplish, because most people have a whole list of things that they expect taxation to do for them and for others.

In order to have a reasonable chance to be able to replace the many idiotic tax systems in all countries on Earth, we must first try to agree that taxation has but one single purpose and nothing else, namely to collect sufficient revenue with which the various governments at all levels of jurisdiction can meet their financial needs to govern.

For that purpose I have created the 10 tax commandments   that must be followed when creating any system of taxation. I created this system of taxation with these rules as guidelines and the result has been beyond my greatest expectations. Simple, comprehensive and easy to implement and administer.

It would not mean much if this proposal were merely better than the more well known tax proposals like the FAIR TAX and the FLAT TAX. Those two proposals identify most excellently what is wrong with our current system but do not come up with much of a solution.

Proponents of both of these more well known tax proposals should have a long and hard look at this Automatic Tax and switch their support to it if they like it better than their own, because Automatic Tax is truly far superior to any and all other tax reform and tax replacement proposals I have knowledge of.

Like many other tax proposals Automatic Tax will spell the end of the dreaded IRS with its 17,000 page,  9 million words insane tax code. It is a tax replacement proposal that sounds too good to be true, but not only is it true, it is ready for immediate implementation.

Nothing will happen however, as long as "we the people" are complacent and do nothing and are convinced that the "special interests" have more power than we have and that they will be able to maintain things exactly as they are. Cast your vote for Automatic Tax. Give us your opinion and suggestions for promoting this idea.

Automatic Tax is similar to a credit card users fee. It is the simplest solution to replace all current forms of taxation at all levels of government (Federal, State, County, Local) with a single 5% users fee for using the monetary system created, regulated and controlled through the government. This transfer fee is automatically collected by the government through the same banking system it already controls and regulates now. It is similar to the 2% or 3% credit card users fee that is collected by credit card companies for using the services provided by credit card companies. 

No more accounting and record keeping for tax purposes. No filing of any tax forms. No audits of any kind and no more government intrusion into our private lives.

I am the manufacturer of a
product  that sounds too good to be true and here I am, the same manufacturer, proposing a system of taxation that sounds too good to be true as well. My name is Alf Temme and my hobby is tilting at government windmills. Email alf@400a.com

What can a manufacturer possibly know about taxation? Shouldn't members of Congress, tax experts and professors of economics know more about taxation than a manufacturer?

Congress had its chance
Let's face it, we have left taxation up to members of Congress for a long time. They were assisted by tax experts and professors of economics and look what they came up with over the years. All they created is this dumb and very costly 17,000 page Federal Income Tax code with 9 million words of incomprehensible nonsense that costs the United States economy about $900 billion per year (2005 dollars) in administration, collection, accounting, filing, auditing, prosecution and additional unproductive and counterproductive efforts to evade, avoid and minimize taxes. Add to that the costs of administration and collection for all the other, over 30,000, taxes at State and local levels of government (yes, believe it or not, in addition to the dreaded IRS and 50 State taxing agencies, there are over 30,000 additional taxing authorities with many costly employees at lower levels of government for counties and cities, that make the lives of business owners a bit more difficult every day with forms and regulations and of course tax collections).

My simple thoughts
So, I thought, that if I were to apply to taxation the same manufacturing economies that I use in manufacturing, that I might be able to create a very simple and economical system of taxation that raises, with a single, automatically collected 5% transaction fee, all the revenue needed to replace the current taxes collected by the IRS and all the other 30,000 tax jurisdictions combined. 

Too fantastic?
It sounds too fantastic and it also sounds that if such a thing would be possible that many other people would have thought of it before and it would have been implemented a long time ago. But that is of course the usual reaction from people when they hear of a new invention that puts to shame all old insights with brilliant and seemingly obvious simplicity. The fact is that simplicity is often much more difficult to create than complication. Complication is far easier to create. Just look at the ease with which our legislators complicate our lives. They should be ashamed and they should consult with manufacturers rather than University Professors for simplicity, innovation and efficiency.

Those tricky politicians
It also sounds that, if it were even possible, that such a simple transaction fee would have to be at a very high percentage rate to replace all those other taxes combined.  Because, lets face it,  those tricky politicians are nickling and diming us to death with all those different smaller taxes, because they do not dare to put all those smaller taxes together into a single large tax for fear that it would reveal the over 50% combined taxes the average citizen is paying on income. The politicians fear that combining all taxes into a single larger tax would cause tax riots and tax revolutions.