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In the last 20 years or so, I have come across a couple of ideas that are not politically palatable. The first was a universal transaction tax. Every transacti

In the last 20 years or so, I have come across a couple of ideas that are not politically palatable. The first was a universal transaction tax. Every transaction that passes through the banking system has an associated transaction tax rated at 1 cent per 100 dollars collected by the banks, remitted directly to the government and taken out of the transaction. All monies transferred out of a country would have the originating country collect and retain the tax. The interesting aspect of this is that all funds that end up in the banking system, irrespective of legality of source would participate in the transaction tax. And based on the figures of over 20 years ago of only 1 in every 1000 dollars passing through the banking system was from legal enterprises, that's a lot of additional taxed wealth. The other aspect of that discussion was that all other taxes, government charges (duties etc) would be dispensed with. It was unpalatable because it treated all as equal and various interest groups don't like that. The second one was charging a flat tax (income) on every entity with the only allowable deduction being salaries and wages. This is based on gross income not net income. One aspect would be to force companies to run much more efficiently than they would otherwise do so. Again treating every entity equally would not be politically palatable. Of course, there will those who would still try to game the system, them you cannot get rid of.

mistermann 9y ago
> This is based on gross income not net income. Largely varying margins in different industries makes this seem unfair to me, unless I'm misunderstanding it. Basing it on net income avoids this, but then you get funny bookkeeping to game the system.
- oldandtired 9y ago
  Precisely, Net income leads to funny bookkeeping to game the system. The goal of gross income forces companies to be efficient and with only wages and salaries as deductions, not at the expense of employees. Trade tariffs can be applied in a similar manner. In the usual case, tariffs are based on the worst performing internal supplier, not on the best performing (most efficient) internal supplier. As efficiencies are gained by all, the tariffs themselves can come down. If the most efficient internal supplier gets less efficient, the tariffs do not increase to offset this decrease in efficiency. hence, they are forced to maintain or increase efficiency.

mistermann 9y ago

> This is based on gross income not net income. Largely varying margins in different industries makes this seem unfair to me, unless I'm misunderstanding it. Basing it on net income avoids this, but then you get funny bookkeeping to game the system.

oldandtired 9y ago
Precisely, Net income leads to funny bookkeeping to game the system. The goal of gross income forces companies to be efficient and with only wages and salaries as deductions, not at the expense of employees. Trade tariffs can be applied in a similar manner. In the usual case, tariffs are based on the worst performing internal supplier, not on the best performing (most efficient) internal supplier. As efficiencies are gained by all, the tariffs themselves can come down. If the most efficient internal supplier gets less efficient, the tariffs do not increase to offset this decrease in efficiency. hence, they are forced to maintain or increase efficiency.