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A fair tax system needs three necessary features in order to reach three aims.
Are theses aims only a vision?
Yes.
Without a fair tax system these aims will be only utopian visions.
For capitalistic and communistic lawyers and legislators are such aims
not realistic. For capitalistic lawyers the usual necessary
professional outlays are not part of the tax base. They calculate
only the net income as a tax base for the income tax.
Now it' s time to explain the first important feature of
a fair law system. In order to burden the expenditures for
machines and
professional outlay like the work, it is necessary to broaden the
tax base. In this case it' s necessary to calculate the gross
economic income. This is possible, if the social benefits for the
people are not subtracted from the gross income but from the tax
amount. The social benefits for people without a handicap should
be like a minimum income. A financial system which concedes
everybody a minimum income without further conditions should also
burden all people with the same tax conditions, without
supplementary conditions. Then the tax base can be calculated
without any exemptions, because it is identical with the gross
income.
Now it' s necessary to explain the gross income. The gross income
includes all professional outlays. To describe the true gross
income it is easier to account the costs which are not part of
the gross income than the parts of the gross income. The gross
income is the same than the gross value added. A definition is
more evident with the subtraction method. The gross value added
or the gross income are the gross receipts through the gross
sales of an economic subject without the costs for intermediate
goods purchased.
In the trading the intermediate goods are only things which were
buyed for saling. And in the industry the intermediate goods are row
materials and semifinished products for new products. Raw
materials and semifinished products for means of production are
not intermediate goods. The expenditures for electric power or
other energy or for water consumption, for cleaning or guarding
the offices and buildings or expenditures for advertisings are
not intermediate goods and can' t be subtracted from the gross
value added.
This explaining statement is important, because in the capitalistic
invoice system it' s not usual to differ the true gross value
from the strange value added of other suppliers. In capitalistic
invoice systems it' s usual to calculate the expenditures for
maintenance of the means of production together with the true
intermediate goods. Therefore the expenditures for maintenance
for the means of production and the expenditures for small means
of productions are not burdened with tax like the expenditures
for intermediate goods. In the capitalistic balance sheet the
maintenance for the means of production are accounted with
intermediate goods, although they are part of the gross value
added of a firm. The gross income for all as tax base is therefore the
first feature of a fair tax system.
The second fundamental characteristic of a just
tax order should be the personalization of every income and their
direct taxes. All income is generated through the power of
natural persons. And all income is destinated for the consumption
of natural persons. Every economic performance has it' s origin
in the work of natural persons and not in legal entities.
Therefore all earned money will be distributed at the end to
natural persons and not to juristic persons. The true creators of
income are in every economy system subjects and not objects. In
the consequence in a fair financial system the creator of income
and the debitors of taxes are individuals and not industrial
groups.
But the personalization of income and the direct taxes is not
possible with a linear tax rate. Although linear tax rates were
founded many thousands years ago, a linear tax system is not
sufficient for a moder, fair and adequate economy.
That means the only alternative for a linear tax rate is a
progressive tax rate.
It' s evident that the accumulation of property is the reason for
the accumulation of income. The impede of concentration from
property of companies has two advantages. One important advantage
is the impede of income through property. That means it' s much
more difficult for the owners to gain huge property income. The other
important advantage will be the impede from the concentration of
power. In politics this condition is called democracy. Democracy
is the opposite of monarchy and of dictatorship. In the economy
it seems to be only a dream to realize democracy. But if we want
keep private property in the economy and if we also want avoid
the concentration of economic power and the centralization of the
means of production, we need a progressive tax system.
In capitalism the tax amount, a company dues his government does
not depend from the ownership of a company. In case the the
capitalistic company has only one proprietor, the company has to
pay the same tax as if the firm has thousand shareholders with
identical values of their shares. But in a just tax system every
shareholder has to pay a progressive tax for his income, because
the income of the company is only the total of the incomes of the
shareholders. Hence the taxes a company must pay to the
government must be the total of the taxes which the shareholders
have to pay to the government.
It' s easy to understand, that in a progressive tax system the
total of tax amounts calculated from many small incomes is lawer,
than the one progressive tax amount calculated from the total of
all incomes, that means the whole income of the company. The total of
many small incomes of many subjects
represented through the shareholders is identical with one income
of one object represented through the company. Their tax burden would
be identical if the tax structure is linear and without tax allowance.
This means in a optimal tax system the firms keep the chance to
save tax debt if they maximize the number of the shareholders.
Consequently the maximization of shareholders leads to
minimization of tax burden. At the other side the minimization of
the shareholders leads to maximization of the tax burden.
In repetition, the personalization of the incomes and the tax
burden is the second elemantary feature of a fair tax system.
Last but not least we consider the third fundamental
characteristic of a sustainable and well-balanced tax
system. The direct tax on income is the most important tax of all
thinkable taxes. That's why financial justice is beginning and
ending with a correct structure of direct taxes.
In the first feature we learned that the tax base must comprise
the whole income generated through work and rents. And later in
the next step we have seen that the tax structure must be
progressive and not linear.
Now we should know that the personalization of economical income
from the companies is only possible to people who work in the
company. This fact does not mean that the public administration
has to control if a shareholder does work enough or not enough
for his company. It is sufficient to control the whole income of
the shareholder, because every shareholder receive two incomes.
One income exists in form of the individual income for personal
consumption. And the other income consists as a part of the
company income for the maintenance of the company.
In case a shareholder leave his company as a worker, he will also lose
his rights and duties as shareholder. Then he gets no more income
and so he has no more to pay taxes. But this order has an
exception. Only in case of liquidation of a firm the old
shareholders gain back their rights for a limited time, in case their
parts of the
firm were not depreciated. That' s why all the shares of a firm
in a self-goverment market economy imly their individual market
value. However, this shares does not have a value for all
speculators of the world who want gain profit and privileges
without any effort. The market value of the shares in a fair
economy exists only for the workers in the company. Only the
active members of a company who earn their individual income from
their firm have the chance to reduce the total tax burden of
their company. This option of tax reduction is possible until all
workers of the firm possess exactly the same part of their
company.
Through minimization of employed workers the management has the
chance to minimize tax burden. Now it' s no more profitable that
the companies establish groups, trusts and holdings. Only natural
persons and no legal
entities can be recognized as shareholders and gain their
tax privileges.
The shareholders will elect their chairleader and an additional
board similar to a capitalistic supervisory board. The executive
body and the board of the shareholders are the competional
authorities in big democraciated companies. Only through
cooperation the authorities have the chance to work successful
for their company. In the other case, in case of failure, every
authority has the right to advance the next election of an
authority. In case of a dispute about an essential question for
the company the representative authorities have the option to put
the vote to the shareholders.
These are only the main characteristics of a fair tax and money
distribution system. Many consequences of this system are not
integrated in this introduction. Although the mathematical
description of a progressive tax structure is not complicated, it
is not part of this introduction.
The essentials of a fair credit system, the elements for well-balanced
social laws, the rules about optimal privatization and
socialization of the economic sectors and the best solution for
the political separation of powers are not topics of this
introduction. The consequences for calculating the national
accounts and the true economic power of a national economy and
the secrets of a stable currency policy are also parts of a
holistic economic and social system. The script with clear and
logical answers to all this questions is only in german language
avialable. It is complemented with many graphs and diagrams.
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