Tax Solution, Federal Taxes, VTax, Taxation, Economy

Excepts From The Chapter "You Want Answers"

Q: You have a wonderful analogy of our economic system. Would you share this analogy with us?

A: Imagine the economic system of America contained inside a huge fifty-story building. The first two floors contain the wages of working Americans, mortgage payments, consumer credit, in short, all consumer spending. Floors three through ten are business to business transactions and where consumer goods are manufactured that supply floors one and two. On floors eleven through fifty is the investment community. Money can, and does, flow in any direction on the same floor or between floors. Virtually all the federal taxes are collected on the first two floors only. Ninety-five percent of the floors pay little or no taxes. The VTax transfers one-half the federal budget from the first two floors to the other forty-eight floors. Taxing transactions a very small percentage over the entire building will protect Americans on the first two floors (everyone who works) from paying oppressive and excessive taxes.

Q: How were the VTax income tax rates determined?
A: Good question. The goal is to spare one-half of the taxpayers from federal taxes, and the median income determines the "half way" point. Depending on filing status, the median income is between 30,000 and 50,000 dollars. The VTax picked the "half way" point at 40,000 dollars. Assuming the top fifty percent earn between four and five trillion dollars, an effective average tax rate between twenty and twenty nine percent will raise over one trillion dollars (approximately forty percent of the federal budget). The IRS can determine the "half-way" point on a yearly basis to meet the projected federal budget demands.

Q: Why not only reform the present income tax system?
A: Over sixty percent of taxpayers pay more in OASDI taxes than income taxes. Reforming only the income tax system does little for the middle class.

Q: The VTax transaction tax of one-fifth of one percent is based on 800 trillion yearly economic transactions. What if the number of transactions is lower?
A: While it is complicated to calculate the exact number of transactions (called transactional velocity), the banking system processes over 400 trillion yearly transactions. In addition, there are consumer, business to business, and stock transactions (to name a few) that fall outside of the banking system. This brings the estimated total number of yearly economic transactions to 800 trillion. If the number of transactions become less then 800 trillion, the VTax transaction tax would be adjusted slightly upward. For instance, 600 trillion yearly transactions would require a one-fourth of one percent transaction tax (one penny per four dollars)

Q: Major upheavals are taking place in the stock market and investment community, won't the VTax add to that upheaval.
A: The upheaval is due to speculators, incompetent investors, and plain greed. The VTax adds one-fifth one percent to a transaction, and if an investor is working on margins less than that, then he or she should find another profession. Interest rates might rise slightly, small price to pay for true tax reform. Keep in mind the investment community accounts for eighty percent of the monetary transactions, but will contribute less than forty percent of the taxes to fund the federal budget.

Q: If the transaction tax is so great, why is it not in use today?
A: The cynical answer is why should the politicians care as they get elected by the middle class majority, but are beholden to special interest groups. They walk a fine line by trying not to piss us off too much by throwing some tax reform crumbs our way (does "let them eat cake sound" familiar?), while taking care of their cronies as quietly as possible. The not so cynical answer: the income tax started out as a relatively harmless (small) tax on the rich but evolved into the slippery slope we find ourselves on today.

Q: Why would the politicians, and the behind the scenes power structure that keep them powerful, want the VTax instead of the present tax system?
A: They do not want the VTax. The people who created our present tax system somehow manage to have the best health-care, send their children to the best schools and own houses in "good" neighborhoods. They live very well. So what incentive do they have to change things for the middle class? The answer is they have no incentive, unless their "jobs" are threatened.

Q: Do you really believe you can take on the present power structure and get the VTax enacted?
A: No, I believe we can get the VTax enacted.

Q: Do you truly believe a grass roots organization will become powerful enough to enact the VTax?
A: Stranger things have happened.

Q: I expected a more passionate answer, it is nearly impossible for a group of people to agree on anything, how do expect this effort to be any different?
A: Presidents rise and fall on "it's the economy stupid" and historically people vote their pocketbooks. The VTax carries a very large pocketbook; middle class wage earners will see $300,000 to $1,000,000 (yes, one million dollars) of extra income over their working career! Those figures are not after the money is invested, it is actual savings. If you invest the VTax savings and realize a ten percent annual return, you could have a cool 5,000,000 dollars at retirement! Modest investments could return a million dollars at retirement; and the majority of Americans fit this profile. Money talks and the VTax walks (or is it, the VTax talks and money walks?). The VTax system cares nothing about your political, religious or personal beliefs; its only goal is to reward hard working middle class Americans by letting you keep most (or all) of your earned income. So, to answer your question, when hundreds of thousands, possibly millions of dollars are at stake we tend to put our personal differences aside and work towards a common goal.

Q: Sounds great, but what are you economic credentials?
A: A passionate desire to create a fair tax system, and twenty years of research. Must you be a certified mechanic to work on your car, or a contractor to build a house addition? No, you need desire, knowledge and experience; not a piece of paper. A farmer was asked if he could repair his broken-down tractor, he said, "a man made it, a man can fix it." The so-called experts broke our economy; the Vtax will fix it!