The New Way
Download the white paper (word)
The System
Flow taxation
The flow (flow) of money around the economy is taxed at a very low rate, around 1%.
This is done through the banking system very similar to the way FID (Federal Institutions Duty)
used to work. Both debits and credits (incoming and outgoing) taxed in real time and transferred
to the central holding safe. The Federal Holding Safe (FHS) is a stagnant place outside of the economy.
For those cash based economies or ones with unreliable/unsecure banking systems a central ‘bank’
could be set up that all transaction would need to pass through to be legal. This has the added benefit
of putting the means of exchange in the hands of the democratic government (the people).
Low taxation sounds impossible to be enough to raise large amounts of money, but even small
economies such as Australia, 15 on the world GDP level, turn over about a trillion dollars a day,
one percent is equal to 10 billion dollars.
Flat redistribution
On a daily or weekly basis the money is redistributed to the citizens of the country in equal sums,
giving all citizens an income.
Some would be reserved for government spending and projects, and to run the system and
government.
The amount redistributed would be set at an amount that can keep inflation low, after a bit of
tweaking it will self regulate the economy, as transactions occur more quickly (a overactive
inflationary economy) more tax will be collected but the same amount will be re-distributed,
there for taking money out of the economy and slowing it. This extra money is stored in the
FHS out of the economy so when things slow the same level of redistribution can be maintained
thus speeding up a slowing economy. Balance is found.
Can it work??
Some numbers to play with.
The RTGS (real-time gross settlement) system in Australia run by the Reserve Bank of Australia
does the interbank transactions and the volume is between 150-250 billion a day. (the highest
daily volume in 2007 was 270 billion the average being 170 billion)
In order to give every Australian $50000 (just under the average wage) a year at a transaction
tax rate of 1% we would need approx 273 billion taxable transactions a day or a flow.
To get $35 000 each (a good tax free livable wage) we would need a flow of $191 billion. This
includes children getting $35000 a year as well. Which may not be necessary.
I will also remind you the interbank transactions are the end transactions but give an idea of the
volumes involved. They do not account for transactions within the same bank for instance. And
don't include the multiple transactions that may happen in one day between people, accounts, and
entities. All this will be taxed. The volume is massive. The rate could be as low as .5% or lower.
We will still need to maintain a government and many things it provides such as health, which is the
Australian governments second greatest expense after welfare.
2007
Fed govt total revenue (tax) 303 billion
Welfare 97 billion
that means the flow tax would need to raise another 200 billion or so plus perhaps an extra
50 billion for the states expenses which they raise themselves.
So total flow per day at $35000pa per person redistribution and full government = 260 billion
** which is not just possible but likely**
ie (260 billion = 2.6 billion tax (@1%) perday)
If 260 billion moving in Australia's economy sounds a lot here's a few more numbers form the
RBA (Reserve bank of Australia)
$634 million credit card transactions a day
$439 million ATM withdrawals perday
$508 million Eftpos transactions perday
$5-6 Billion turnover on the ASX (Australian stock exchange)
Remember the beauty of flow taxation is it collects at many points at a low amount, thus being
unnoticed or at least not worth avoiding.
And it works, FID in Victoria (1998) collected 360 million pa at a rate of .06% and there were
many exclusions to this tax.
Benefits
Environment
Puts the power in peoples hands, the idea being that people are more concerned with their
environment and wellbeing than an organisation that is primarily concerned with profit. It allows
people more time to do things for themselves, ie walking to work, growing a garden etc
Breaks the link between income and consumption, it is no longer necessary to have a consumer
society going to create employment and thus income for survival/enjoyment. More than 10% of
Australians are employed selling to other Australians.
Encourages long term planning, not only from individuals but by proxy business to, for they are
individual, the massive safety net allows time to be taken to make more income, and thus the
returns can be expected years down the tack and those involved will still be well off. The
assumption being that given the opportunity people will want long term prosperity.
Energy
Opens up options to individuals to invest in more efficient homes. And appliances.
Encourages groupings in communities (lets of surplus cash) to provide locally produced energy.
Social
Eliminates poverty
Gives freedom of work choice and life choice
Decreases the likelihood of unethical industries. Employees have more choice to leave, and
consumers have more choice due to their increased income.
More time.
Removes fear of a lack of income.
Removes fear as a tool of persuasion
A decrease in certain crime.
Economy
The economy has a self regulatory balancing system which should solve the classic problems a
capitalist economy has, of an excited economy causing inflation and of a slow economy causing
un-employment and suffering.
Business
Takes pressure off small business owners they can now take a holiday and still get paid.
No tax problems in slow times (tax lag)
More time and money for start ups, and new investment.
Decreases speculation, in favour of long term investment, increasing capital for large infrastructure
and building projects.
Encourages risk in long term projects, because income is guaranteed will the project/business is not
returning. And has a safety net for those taking the risk.
Less tax bureaucracy.
Less accounting, lawyer fees.
Spiritual/family
More time with ones family
More time to care for sick or elderly, or children
A chance to find ones self if need be.
Freedom to take a break and explore the inner self.
Problems
People/organisations will create there own tax free means of exchange. People/organisations
will avoid using the banking system to avoid tax and turn to cash.
The second part is unlikely to effect the collection greatly as the model is based on a system that
excludes cash transactions, and it is very difficult to do large transactions with cash.
The first would have to be legislated against and would have to be monitored.
Links
Reserve bank of Australia
Australian Bureau of statistics
Download the white paper (word)
The System
Flow taxation
The flow (flow) of money around the economy is taxed at a very low rate, around 1%.
This is done through the banking system very similar to the way FID (Federal Institutions Duty)
used to work. Both debits and credits (incoming and outgoing) taxed in real time and transferred
to the central holding safe. The Federal Holding Safe (FHS) is a stagnant place outside of the economy.
For those cash based economies or ones with unreliable/unsecure banking systems a central ‘bank’
could be set up that all transaction would need to pass through to be legal. This has the added benefit
of putting the means of exchange in the hands of the democratic government (the people).
Low taxation sounds impossible to be enough to raise large amounts of money, but even small
economies such as Australia, 15 on the world GDP level, turn over about a trillion dollars a day,
one percent is equal to 10 billion dollars.
Flat redistribution
On a daily or weekly basis the money is redistributed to the citizens of the country in equal sums,
giving all citizens an income.
Some would be reserved for government spending and projects, and to run the system and
government.
The amount redistributed would be set at an amount that can keep inflation low, after a bit of
tweaking it will self regulate the economy, as transactions occur more quickly (a overactive
inflationary economy) more tax will be collected but the same amount will be re-
there for taking money out of the economy and slowing it. This extra money is stored in the
FHS out of the economy so when things slow the same level of redistribution can be maintained
thus speeding up a slowing economy. Balance is found.
Can it work??
Some numbers to play with.
The RTGS (real-
does the interbank transactions and the volume is between 150-
daily volume in 2007 was 270 billion the average being 170 billion)
In order to give every Australian $50000 (just under the average wage) a year at a transaction
tax rate of 1% we would need approx 273 billion taxable transactions a day or a flow.
To get $35 000 each (a good tax free livable wage) we would need a flow of $191 billion. This
includes children getting $35000 a year as well. Which may not be necessary.
I will also remind you the interbank transactions are the end transactions but give an idea of the
volumes involved. They do not account for transactions within the same bank for instance. And
don't include the multiple transactions that may happen in one day between people, accounts, and
entities. All this will be taxed. The volume is massive. The rate could be as low as .5% or lower.
We will still need to maintain a government and many things it provides such as health, which is the
Australian governments second greatest expense after welfare.
2007
Fed govt total revenue (tax) 303 billion
Welfare 97 billion
that means the flow tax would need to raise another 200 billion or so plus perhaps an extra
50 billion for the states expenses which they raise themselves.
So total flow per day at $35000pa per person redistribution and full government = 260 billion
** which is not just possible but likely**
ie (260 billion = 2.6 billion tax (@1%) perday)
If 260 billion moving in Australia's economy sounds a lot here's a few more numbers form the
RBA (Reserve bank of Australia)
$634 million credit card transactions a day
$439 million ATM withdrawals perday
$508 million Eftpos transactions perday
$5-
Remember the beauty of flow taxation is it collects at many points at a low amount, thus being
unnoticed or at least not worth avoiding.
And it works, FID in Victoria (1998) collected 360 million pa at a rate of .06% and there were
many exclusions to this tax.
Benefits
Environment
Puts the power in peoples hands, the idea being that people are more concerned with their
environment and wellbeing than an organisation that is primarily concerned with profit. It allows
people more time to do things for themselves, ie walking to work, growing a garden etc
Breaks the link between income and consumption, it is no longer necessary to have a consumer
society going to create employment and thus income for survival/enjoyment. More than 10% of
Australians are employed selling to other Australians.
Encourages long term planning, not only from individuals but by proxy business to, for they are
individual, the massive safety net allows time to be taken to make more income, and thus the
returns can be expected years down the tack and those involved will still be well off. The
assumption being that given the opportunity people will want long term prosperity.
Energy
Opens up options to individuals to invest in more efficient homes. And appliances.
Encourages groupings in communities (lets of surplus cash) to provide locally produced energy.
Social
Eliminates poverty
Gives freedom of work choice and life choice
Decreases the likelihood of unethical industries. Employees have more choice to leave, and
consumers have more choice due to their increased income.
More time.
Removes fear of a lack of income.
Removes fear as a tool of persuasion
A decrease in certain crime.
Economy
The economy has a self regulatory balancing system which should solve the classic problems a
capitalist economy has, of an excited economy causing inflation and of a slow economy causing
un-
Business
Takes pressure off small business owners they can now take a holiday and still get paid.
No tax problems in slow times (tax lag)
More time and money for start ups, and new investment.
Decreases speculation, in favour of long term investment, increasing capital for large infrastructure
and building projects.
Encourages risk in long term projects, because income is guaranteed will the project/business is not
returning. And has a safety net for those taking the risk.
Less tax bureaucracy.
Less accounting, lawyer fees.
Spiritual/family
More time with ones family
More time to care for sick or elderly, or children
A chance to find ones self if need be.
Freedom to take a break and explore the inner self.
Problems
People/organisations will create there own tax free means of exchange. People/organisations
will avoid using the banking system to avoid tax and turn to cash.
The second part is unlikely to effect the collection greatly as the model is based on a system that
excludes cash transactions, and it is very difficult to do large transactions with cash.
The first would have to be legislated against and would have to be monitored.
Links
Reserve bank of Australia
Australian Bureau of statistics
