fair taxes - RichardAlexanderGreen/WorldGovGame GitHub Wiki

Fair Taxation means you get what you pay for and pay for what you get.

Our current tax system will tax anything it can and spend the resulting revenue without any relation between revenue source and government service or regulatory effect. The result lacks rationality and equity.

The basic principle of fair taxes is that the relationship between a tax and a service should be relatively direct. The main implication is that tax revenues are "earmarked" for a limited set of purposes. The more detailed implication is that the source of the tax revenue should be benefited (or regulated) by the government service that spends or invests the revenue.

Some of the more obvious relationships:

• Property services (e.g. fire protection, security patrols, neighborhood watch) should be supported by property taxes.
• Agricultural services may be supported by a tax on farm revenue.
• Sales taxes are appropriate for the support of consumer protection services.
• Payroll taxes (paid by employees and employers) are appropriate for the support of employee protections.
• Transaction fees are appropriate for services that regulate markets and register ownership.
• Resource extraction taxes are appropriate for assuring that land is rehabilitated when the resource is exhausted.
• Transportation infrastructure may be supported by a tax on ton-miles (currently, fuel tax is a proxy).
• Parks and recreational facilities may be supported by a distance-related property tax.
• Disaster services may be supported by a tax on buildings.

Some of the less obvious relationships:

• Education should be supported by a flat tax on income but allocated to students regardless of their family or community incomes. Alternatively: Education might be funded by a flat-tax on that institution's student's (future) income. (Perhaps, this would motivate educators to focus on productivity-related training rather than general knowledge.)
• Health services should be supported by a tax on personal income.
• Old-age pensions and minimum income guarantees should be supported by a tax on personal income.
• Criminal investigations and police that regulate illegal trades should be paid for by a sales tax on the legalized trades. (e.g. Suppression of illegal drug sales should be paid by a tax on legal drug sales.)
• The regulation of financial markets should be supported by a "sales" tax based on the buyer's payments. The tax may vary according to the type of instrument. But untaxed instruments have no related services.
• Non-military international operations should be supported by a tax on international imports and exports.
• Military procurement and operations should be funded by a tax on wealth. The rationale is that this is how local fire and protective services are funded and "defense" prevents destruction of property.

Paying for the draft:

• The operation of the legislature session is a kind of administrative overhead. Draftees are compensated for their time. The compensation is related to the prior years' (from one to X years) average income. If the draftee serves for two weeks, the compensation should be equivalent to 2 weeks of the individual's average weekly income based on their tax filings.
• A possible alternative: Draftees are paid the minimum wage. They may, if they wish, buy "draft insurance" if they wish to cover the difference between the minimum wage and their normal wage. Said insurance could be provided by a third party or the government itself. But in either case, it must be self-sustaining.
• The cost of compensating the draftees is paid via a flat tax on personal income. As a consequence, all earners have an interest in minimizing the legislative session length.
• Employers and business partners are without the draftee's services during the legislative session when and where the draftee is serving. As a consequence, employers also have an interest in minimizing the legislative session length. We expect that most roles can be fulfilled by part-time commitments - for example, a few hours each week.

Earmarks

• Each proposal that is given to the legislature must specify the tax that will be enacted or increased to pay for the proposed service or investment.