These rates shall be reviewed and approved by The People on a yearly basis, based on input from their Global Manager. Note that all of the amounts shown here are just examples at this point, with the exact rates to be calculated once an entire budget has been produced and the necessary revenue determined. In any case, the effective rates will be much lower than under any other political/economic system because of massive decreases in military spending, eliminating the fraud and overall high-overhead/low-efficiency and low compliance rates that are characteristic of existing taxation systems, and the benefits of introducing competition into a large number of areas where it currently does not operate effectively.
Also note that the process of setting tax rates is completely open and transparent and approved by The People. There is no risk of special interests (or their lobbyists and resulting corruption of representatives) having any undue influence on the process. Indeed, these groups will probably find that investments even in propaganda will backfire on them as The People will tend to retaliate against such attempts at manipulation (a form of social engineering). Therefore we are free to implement a system free of the serious flaws in the FairTax proposal that are required to prevent exploitation by a corrupt representative form of government, including lack of adjustability by product/service type, and having to religiously adhere to the “new = taxed” and “old = untaxed” dogma which would decimate the homebuilding industry.
In a high-efficiency system, the overall tax rate doesn’t even need to be computed with a high degree of precision. In a representative democracy any extra income will be used to line politicians’ pockets (or those of their contractor friends and relatives), or wasted via setting up an unneeded bureaucracy in the representatives’ home district. In a Matchist government that extra income will be used to improve the infrastructure. The process of building, and having access to, this improved infrastructure will stimulate the economy, which in turn will enable a reduction in taxes. Anti-tax movements such as the US TEA party, which seeks to reduce government waste by restricting government income (a blunt tool if there ever was one) will find much less to complain about under Matchism because at least they will be getting something for their money.
Unless otherwise specified, the Global sales tax rate shall be 15%, tax to be applied on products, labor, and services.
Tax on alcohol, tobacco, marijuana, and other recreational drugs shall be 25%.
Tax on new vehicles shall be set at (purchase price) ^ 0.28.
Tax on used vehicles shall be set at 5%.
Tax on cash withdrawals shall be 5%.
Tax on gambling bets shall be 2%.
Tax on stock, bond, and commodity purchases shall be 2%, to be applied when an individual or corporation initially buys into an individual product or fund.
- This is in lieu of capital gains tax, and because it is a front-end load also accounts to some extent for differences between short and long term gains. Note that transactions made by mutual fund managers would not be subject to taxes, but that it will be a big disincentive for individuals to purchase extremely short-term (i.e., day traders).
Tax on real estate purchases shall be 5%.
- This new (at least for the US) tax is a bit of financial engineering: It would have negligible effect on an individual’s purchasing habits, yet would generate tremendous revenue and from the individuals best able to supply it. Unlike FairTax, which applies a full 30% rate to new home purchases and 0% to existing home purchases, the low rate here will encourage building, not drastically decrease it.
Tax on energy shall be (5 + progressive-carbon)%. The “progressive carbon” component would be something of the form X * (Y ^ Z) where X is dollars per kg of carbon released, Y would be the years the program had been in place, and Z the required rate of increase. The goal would be to have renewables taxed at 5%, low-carbon fuels like natural gas at something like 7%, and high carbon fuels like coal at something like 10% the first year, with the latter predictably increasing to something like 30% over 20 years and progressively higher after that.
Tax on durable manufacturing, building, energy generation, and energy efficiency products and services shall be 5%.
- To encourage investment in manufacturing capability and improvements to the land, the discount for that being recouped over time in higher land lease prices.
Tax on food items shall be 5%.
Next: List of Credentials