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Essay/Chapter 7. Taxation
Chapter 7. TAXATION
Among the most interesting practical realizations, which make possible the monetary reform we have suggested, is that of a drastic fiscal simplification.
The present fiscal systems —as everybody knows, who has suffered them personally— are absurdly complicated for the taxpayer, and very expensive for the different collecting bodies, because of the great number of officials which are needed for collection and inspection.
1. The single tax
The introduction of one single legal monetary instrument, of the pro-telematic and all-informative type, would allow the suppression of all the present fiscal systems, and their substitution through a simple system based on one single tax of a fixed percentage on the total of each and all the cheque-invoices issued in the geopolitical community, which would always be debited to the customer.
If we start with the two following verifications:
- every cheque-invoice will compulsorily imply this tax, so that its yield will be directly proportional to the total volume of the real market of the geopolitical community.
- the total number of cheque-invoices issued daily (monthly, yearly...) in a given geopolitical community, is very high;
We shall easily understand that the tax percentage should not be very high to be able to cover the needs of a given geopolitical community. This percentage could be calculated every year, in terms of the foreseen needs.
As can be seen, this tax is of the sort «corporate activity tax», because it implies a percentage previously established by law, equal for all, on every operation carried out.
It would not be heavy for anybody, because it would be distributed equally.
The main advantage, however, lies in the fact that it is automatically calculated: any discussion on the amount to be paid is unnecessary.
Another not negligible advantage is its automatic collection, which greatly reduces its cost. In fact the established percentage to be paid shall have to be recorded compulsorily in each cheque-invoice, so that it will be automatically paid together with it. The control of this requirement will be carried out by the same telematic network of cheque-invoices, so that any trickery or fiscal fraud will be impossible. Finally, the banks themselves will discount from every collected cheque-invoice the indicated percentage, and will transfer it directly to a current account opened by the Treasury. In exchange for this service, the banks will receive a commission agreed upon between their General Confederation and the monetary authorities: this will be the only cost caused by the collection of the single tax.
2. Making life easier
As far as taxpayers are concerned, the main advantage of this single tax is that it makes things much easier.
Consumers will not need to think any more about taxes, because every cheque-invoice signed would contain the corresponding percentage, which would not be excessive.
On his side the tradesman would be able to know in advance, each fiscal year, all the taxes to be paid on his purchases of raw materials, capital goods or production factors (labour, capital..), and could lay this expense on the cost price.
Of course workers as such do not pay taxes: it is the tradesman who buys labour and therefore pays the relevant tax.
1. The objection that, under this system, the large «vertical» concerns would pay less taxes than the very specialized ones, is easily solved if the law compels these concerns to split in such a way that the transfer of goods from one section to the other implies the payment of a tax. They would then be on an equal basis with the other companies.