Welcome to
MONEYTAX.ORG
where we are working to
Replace our current Federal Income Tax System with a
simple electronic transaction based system
Rather than taxing personal or corporate income, We propose taxing the electronic movement of money.
- The income Tax system is hugely unpopular and easy to corrupt.
Eliminate it entirely.
- Money is, no longer, just a means of exchange.
It is also a commodity, bought and sold on world markets.
It can, and should, be regulated under the commerce clause of the Constitution.
- Most of our money transactions are electronic.
A very small percentage are cash.
- Every time an electronic transfer of funds takes place, simply take a percentage off the top.
This may be 1, 2, 3 or more percent, depending on what the current needs are.
- The system is already in place, to record transactions and collect and remit funds.
Our banks and credit card companies have been doing it for years.
There would be no loopholes.
The only exception would be transfers, of the collected funds, TO the government.
Transfers BY the government WOULD be subject to the tax.
FAQs
- What is a money tax and could it really replace the income tax?
The Money Tax is a tax on money, but only when it moves as an electronic funds transfer. Not cash, not barter and not IOUs.
It would be collected by the financial institution as a surcharge on the transfer of capital from one account to another.
The receiving financial institution would collect the surcharge as funds come in and forward it to the treasury once a day along with a report of the total days receipts, signed by the CEO of the financial institution.
Lying on this form would be a federal felony offense, so cheating would become very rare.
The vast sums of money, constantly being moved around in this country would generate so much income to the federal government that we would no longer have a need for income taxes and could therefore completely eliminate them.
We estimate that well over a trillion dollars a day are exchanged, which would bring in more than 10 billion dollars a day if we set the rate at only 1%.
- Would this be a tax on all transfers, even cash?
I am NOT suggesting a tax on CASH since it would be impossible to track, just electronic transfers from one account to another.
- What about tax deductions?
Eliminate ALL deductions, credits, special provisions and income from the tax code.
They are all replaced by a simple to implement and hard to game system that taxes money.
But only when it moves.
- Isn't this a Transaction tax?
Some would characterize this as a transaction tax and attempt to
implement it piecemeal on things like securities transactions.
I am suggesting something much more robust and fair.
Tax money when it moves through our electronic banking system.
Every time money moves from one account to another, take a small percentage off the top, perhaps 1 or 2 percent.
Banks and credit card companies are already doing this without any adverse effects so it should be readily accepted, especially when you explain that all personal and corporate income taxes have been eliminated.
The only exception to the rule should be the transfer of money to the government by the bank otherwise this would create a never ending loop.
- How would this impact the Treasury and Congress?
Collecting taxes this way would mean daily cashflow to the treasury. The Treasury would then be able to make extremely accurate forecasts.
It would free up congress to concentrate on how to spend the money rather than on who to protect from the tax code.
Once a year, Congress would revise the percent for the coming year, based on the federal budget and the treasuries projected income.
Tax expenditures, which have previously been hidden in the voluminous code, would be written as direct investments of the government or as expenses on the balance sheet.
Tax expenditures will no longer be off-budget. Come to think of
it, any activity that the government promotes with financial incentives will appear in the budget as an expenditure.
- Who would participate?
Everyone, NO EXCEPTIONS!
The only controversial question on this proposal is whether the sender is made whole or the receiver is made whole. IE: you agree to pay john $100.00. Do you need to pay $101.00 so John gets $100.00 or do you pay $100.00 and John ends up with $99.00? (assuming the rate is 1%)
- Which entity would be responsible for remitting the collected tax to the government?
I would suggest that only the receiving entity would collect and
remit the tax to the government.
- Won't Banks object?
Banks and credit card companies are already doing this type of surcharge, for themselves without any adverse effects so it should be readily accepted, especially when you explain that all personal and corporate income taxes have been eliminated.
- What about transactions that go through several banks before reaching their final destination?
Each and every financial entity receiving a transfer, even if
they retransmit the funds immediately, will be required to collect and remit the tax.
Channeling funds through intermediate banks will probably
decline as a result of this system.
The only exception to the rule should be the direct transfer of money to the government by the bank otherwise this would create a never ending loop.
- What about foreign banks and financial institutions?
At this point, I don't think we can require foreign banks to
collect our taxes for us, so a foreign bank on foreign soil would be able to receive funds without paying taxes to the US Government BUT, any funds that they transmit to the US system will be subject to the tax, automatically, just like any other transaction.
Note: When foreign governments discover how easy it is to collect
their taxes, this way, they will soon sign on too.
- What about poor people, how much will they pay?
They will pay the same rate as rich people. Everyone will share
the pain equally, but with a rate this low, there won't be any need for special tax exemptions for things like food or medicine.
In recent years, most, if not all, direct assistance programs for poor people have switched to a restricted debit card system or bridge card.
These cards are restricted from withdrawing cash.
- Why electronic transactions and not cash transactions?
Mainly ease of implementation and cost of operation.
The electronic system is already in place and well established for bank and credit card fees so extending it to a small tax fee would be easy.
There would be NO record keeping requirements for individual taxpayers transactions so nobody would know how much money you have or how much you spent.
Financial institutions would total up their daily receipts and
transmit 1% to the government. They already run their daily receipts every day so this is elementry for them.
Ever day they would transmit a simple statement to the government, signed by the CEO of the financial entity, stating their receipts for the day along with their remittance.
Lying on this form will be a felony offense punishable by prison time.
Any institution that does lie shall have their routing number immediately revoked and will then cease to exist.
All of their assettes and accounts will be transferred to the resolution trust authority for settlement with account holders.
NO BAILOUTS.
I predict that this remedy will be implemented exactly once before CEOs get the picture.
Cash is much harder and more expensive to control or track or
collect. The tax is so low and the amount of cash circulating in the system is so low that trying to collect taxes on the cash would cost more than the taxes collected so I say ignore cash transactions. The cash will eventually be deposited into the electronic system anyway.
The account holder may deposit and withdraw CASH from his own account at his own bank, without an electronic transaction taking place.
- Will people try to avoid the taxes by paying for things in cash?
Absolutely! But the inconvenience factor, coupled with the
security risks of carrying large sums of cash will prove too cumbersome for most people.
Yes, CASH is anonymous, as it should be.
CASH would not be taxed.
The CASHING of a check, at the bank of origin,
Making CASH deposits into your own account at your own bank or CASH withdrawals from your own
account at your own bank would NOT be taxed.
People will try to avoid the tax by operating on a cash basis.
Fine.
A limit could be established to tax cash deposits over a specified amount, say $10,000.00.
We already have laws on the books requiring the reporting of large cash deposits in banks.
Now we will tax them too.
- What about drug dealers, will they still be able to avoid taxes by
operating on a cash basis?
Yes. Until the government comes to its' senses and legalizes
drugs, for recreational use, the drug dealers will continue to accumulate large sums of cash. Upon legalization, though, most drug purchases will be by credit card or debit card and subject to the tax.
- What about my Social Security or Disability payment, Will that be taxed?
Yes. In order to preserve the simplicity and integrity of the
system, any and all payments made by the government will also be subject to the tax. The way to avoid this, in the case of Social Security for instance, is for the government to grant you access to your funds held in their account till used in a transaction. Kind of like a secured credit card with a monthly limit.
- Can I still make donations to my local charity or church?
Yes, but please remember that they will no longer have any
special tax status or tax exemption status. If the federal government decides that they need to subsidize organized religion, then they will have to pass a spending bill through congress and signed by the President to do so.
- What about my city or state, will my payments to them be taxed?
No, because they are a governmental unit, but, your electronic payment would have to go through the federal government to get to them.
This does not, in any way, preclude or prevent you from paying the city or state cash. And the largess of caring individuals would, I'm sure, be welcomed by their local governmental units.
- How will this tax effect me?
Essentially, you will continue doing the things you have always done except for one. You will never have to file an income tax return again.
Since all taxes are paid up front, You will never OWE money to the government.
- Investments would be taxed.
- Paychecks would be taxed.
- Purchases on plastic would be taxed.
- Mortgage payments would be taxed.
- Transfers of capital, within a company, from one bank account to another, would be taxed.
- Paypal would be taxed.
- Foreign aid would be taxed.
And the list goes on and on.
No exceptions.
If it is a recordable electronic transaction, it is taxed.
This idea will catch on with the rest of the world as they realize that they can collect their taxes
without requiring forms or tax collectors.
We won't care how rich someone gets, because we know they paid the tax on their income and will pay again when they spend it.
I expect that the rate will be so low that people won't even notice that there is a tax.
Once a year the government/congress will get to vote on the new tax rate for the new year.
With steady income and constant reporting, they will have extremely accurate projected income figures to work with.
Foreign transactions, by US entities, could be taxed at a higher rate than domestic transactions.
No more hiding your money offshore.
Any financial institution transferring funds to or from the US system will be required to participate in the collection system.
No exceptions.
Thomas Cox PHD
HK School of Economics
There are some who would ask, "What about the current sales tax and property tax systems?".
Sales and Property taxes primarily serve the local and state governments to pay for local and state services.
These taxes could be eliminated and operating funds allocated to local communities and states on a per capita basis,Fair is fair, but that is NOT a part of this proposal.
This does not , in any way, prevent or preclude the largess of caring individuals to donate to their communities.
Local and state governments are still considered government and as such any funds transfered TO them would NOT be subject to the tax.
Click here to sign our petition at signon.org
Click here to sign our petition on the Whitehouse website
Click here to sign our petition at change.org
Click here to see a similar bill previously introduced 207kb pdf
Click here to view the proposal presented to the Whitehouse in 2005 246kb pdf
Click here to view a short extract of the ATP Tax 53kb pdf
Click here to see a completed proposal 128kb pdf
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