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A Market Based Tax System

Several years ago I was introduced to the idea of a market based tax system that allows taxpayers to choose where their money will be spent. I began my career as a tax accountant and am actively pursuing the CPA, should be complete soon. I hold a bachelors and masters in Accounting.

Given my background in tax, I cannot imagine working in this system without trying to improve it. That is why I want to get a group together to discuss, trade, write, and begin a process that completely overhauls the US tax system.

I firmly believe the fundamental issue with our tax system is not the percentage that we pay, or the method we us. Instead, the fundamental issue is taxation without representation. Give me a flat tax, marginal, progressive tax system, it does not matter. When the tax payer gets to the line on a 1040 that says "tax" I would want them to fill out one additional page. Yes I know... more forms.

The additional page will allow the taxpayer to select funds (like a stock), or a pool of funds (like a mutual fund) for where their tax dollars will be spent. ALL government agencies and Federally Assisted groups will need to register with an oversight board that will place the entity in an " index." The entities will submit a budget, and hope the taxpayers help fund the budget. Those entities that receive tax dollars, will do so because taxpayers believe in the entities public service. Those that do not receive funding will scale down, or diminish all together. Once an entity meets its budgeted amount, the remaining money selected by a taxpayer will go towards the taxpayers second, third, fourth choice.

This is the only type of system that can bring transparency to the tax code, and give people fair representation in tax matters. Nay Sayers say this overhaul cannot be done... I say they have no vision or background in tax. If we can create an efficient stock market, we can do the same with the tax code. It is important to have an efficient tax market.


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    Jul 17 2012: I would settle for a consumption tax instead of an income tax.
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      Jul 19 2012: I'm ignorant of how a consumption tax would work. Wouldn't we run the risk of discouraging spending and lowering product demand? Would it slow down the economy? I guess we would be more encouraged to save.
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        Jul 19 2012: Basically the idea is to encourage people to produce, which means no tax on production, rather on consumption. This is a workable idea.

        I will add that anytime that you have an individual who discourages production you need to look at him with a jaundice eye as he is evil. That individual is Woodrow Wilson who Glenn Beck calls the worst president in the history of the U.S. He gave us income tax, the federal reserve, and took away the states rights to appoint a senator which was a save guard against the tyranny of democracy, and who the communist countries said they learned everything they know about propaganda. Nice eh?
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          Jul 19 2012: Thanks Pat. Would you levy a sales tax to implement this, or some other method? I agree about Woodrow Wilson. I've read that he regretted his decision on the federal reserve, but I still resent him for his perfidy to the constitution.
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        Jul 19 2012: savings would be greatly encouraged, which in fact speeds up the economy through increased accumulation of capital.
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        Jul 20 2012: Eric

        Yes a sales tax. The problem is that the whores in DC would add the tax call it a VAT and not get rid of any other tax. So it ain't gunna happen unless we can get enough people to small the coffee but that is a real ditch digger unless we can get someone like Paul Ryan to bring in a backhoe.
        • Aug 6 2012: Less than 5 minutes ago: Pat, as I mentioned it does not matter what tax system we use to discover our "tax liability" Marginal, flat, consumption etc. A consumption tax has its own set of issues. What is consumption? If your wife buys a $20 purse that is perfectly fine is that consumption or an investment? That purse will last 5 years, it will hold her money, it is a necessity. I can argue this is an investment. Now imagine your wife buys a $1,000 Louis Vuitton purse. Both purses serve the exact same purpose. I would argue $980 (1,000 minus 20) is consumption, and 20, is an investment. Consumption tax like most tax systems are going to require many stones to turn over.

          A consumption tax has been played with in theory, but I do not think we are prepared for a consumption based tax system. However, the fundamental issue still remains of taxation without representation. I cannot stress to everyone enough that it does not matter what method we use to discover our "tax liability" it matters where that liability is being spent!
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