A BETTER TAXATION SYSTEM??.

Any discussion to improve taxation collection methods is worthy. The present income tax system is a schimozzle. It does not need improving, it needs be thrown out and a simpler, practical, and universally fairer, new taxation system evolved. Its developement would need fine tuning, but without ever losing the basic tenet of simplicity and universal fairness.

Who will do that? Well, no-one in the political and bureaucratic arena,but here, from a simple citizen is a start. It may appear naive but it certainly could never be more ridiculous than our current system! It may deserve criticism, even condemnation, but anything that seeks improvement over the present situation deserves consideration.

3. Let's start with a few comments on some of the failings of the current taxation system.

4. Firstly it is too complicated, mainly because it tries to be all things to all people, but more often favouring those that are already favoured by their wealth.

5. Secondly it discourages enterprise beyond a certain point. It encourages wasteful business spending to overwhelm competition. That wasteful spending adds to the end cost, and is falsely justified by its tax deductibility. It is wateful in its own clumsy convoluted conduct.

WHAT ALTERNATIVES ARE THERE. LET US CONSIDER THIS.

Firstly do away with income tax altogether. That will give encouragemnet to all workers and enterpreneurs alike to earn more from their labour and investment skills.

Secondly, to temper spending and encourage a spendthrift society institute a "transaction" tax that supplies the tax revenue fairly because it adds the cost equally to all goods, making the payment of tax the responsibility where it belongs-- WITH THE END USER. Whether it be personal or business spending, the less you spend, the less tax you pay, the more you spend, the more tax.

Every time money moves there is a small element taken off as tax. The percentage amount of this tax will be constant and formulated by governments by both calculation and experience. However, because of its universal spread, it will only need to be very small.

How is this tax collected? The same way that banks collect their revenue from credit cards. All transactions must be made by either cash, credit card, or cheque, much the same as it is now but with a few essential differences. Each time a transaction occurs the banking institution must make a direct payment to the Taxation Department of the specified tax percentage whether it be collected by card or cheque. That would be a compulsory requirement of being a BANK or registered FINANCIAL INSTITUTION.

What about the cash economy? Here, a compromise has to be found and these are the suggestions. All paper transactions, except cheques made through a bank, are forbidden and all currency notes are recalled. All cash transactions must be made in coin, the largest denomination being the current 50 cent coin which could have a value of, say, $10. You could buy a car tax free but you would need a couple of wheel barrows to make the payment. If you don't pay cash, use your card or pay by cheque and so pay your tax.

However when you draw cash from, or pay cash in, to a bank you come under the common rule of "transaction" and are taxed accordingly. The only transaction avoiding the tax are those made with cash between drawing and depositing from a bank. Who would these be? Principally the poor , the pensioner, the itinerant. A relatively small tax loss in a deserving social area.

The card technology will need to be upgraded to make things simpler.

Firstly, both the card and the card reader(processor) must be able to identify the user by, say, your personal bar code or even your finger print.

Secondly the card must be like a USB computer memory stick and able to record who you are, what your balance is,and to whom the tranction was made (from the bar code of the selling party). This would have four important recordings satisfying the needs of the bank, the seller, the customer and the tax department all identifying the transaction where needed for security and records and would obviate the need for any paper and can all be checked on your computer. Don't use a computer? Pay cash!

There are bound to be some weaknesses! What might they be? In the high flying world, things like special bills of transaction and International exchanges, the gambler on race tracks and casinos etc; but these can surely be catered for as is done now in the betting world, without breaching the new system.

WHAT MAY BE THE MAJOR BENEFITS?

Nobody, but nobody, has to do another Income Tax Return.

Other than to monitor the system and transfer funds to the Treasury there would be no need for a collection monitoring section of the Taxation department. That in itself could arouse an objection on the grounds of job loss.

NO need for the tax department to be both judge, jury and panaliser for tax offences. No costly, improbable law suits if you object.

No need for special taxation conditions to satify "special needs groups" of society. These special needs would be met as a result of governemnt response to their appeal and the power of their lobby forces. In fact with a large, single, common, fair ,taxation source , why have STATE taxes at all, but rather pursue and improve the "Council" of states, counselling and claiming for their individual share of the tax pool according to their individual needs?

It would be extremely difficult to cheat the taxation system or create any unfair benefits from it. This, in itself will raise objections from those who presently gain enormous advantage from the deductibility factors of the current taxation methods both income tax and GST.

It would replace GST and all its variations and unfairness.

IS THIS SUFFICIENT TO START THINKING ON THE SUBJECT? BETTER TO START THAN NOT TO TRY AT ALL!!

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