MUCH LOWER TAXES
The Math
Collectively, we earn $20 trillion per year.
There are over $7,200 trillion in payments each year.
Look How Low Taxes Would Go if We Taxed Payments Instead of Income
Taxing Income
The budgets of the federal, state, and local governments total $7 trillion.
$7 trillion
÷ $20 trillion
35%
Taxing income requires a tax rate of 35% to balance the budget.
Taxing Payments
UBI, free healthcare, free college and a $2.6 trillion surplus would total $14.5 trillion.
$14.5 trillion
÷ 7,244 trillion
0.2%
By taxing payments we could reduce the tax rate to 0.2% and enjoy more benefits.
Reduced Taxes Plus More Benefits
Listen to an Explanation
00:00 / 20:37
We're Taxing the Wrong Thing Today!
The material economy is the flow of goods and services. The monetary economy is the trading of financial assets, which is 350-times the size of the material economy.
The large blue sphere represents the total payments in the monetary economy.
We are taxing the red sphere when we should be taxing the blue sphere!
The tiny red sphere represents the total payments in the material economy.
What Taxing Payments Would Mean to You
If you're single and earning $30k, your taxes would drop from $6k to just $60 .
Learn More About How the Economy Works
ANOTHER VIEW
A Bar Chart Comparing Our Income to the Total Payments in the Economy
The volume of payments in our economy - $7,244
Trillion
Versus our income -
$20 Trillion
$20
Trillion
$4,500 Trillion
$3,500 Trillion
$3,000 Trillion
$2,500 Trillion
$2,000 Trillion
$1,500 Trillion
$1,000 Trillion
$500 Trillion
$5,000 Trillion
$6,000 Trillion
$6,500 Trillion
$7,000 Trillion
$7,244
Trillion
$4,000 Trillion
$5,500 Trillion
Today we tax our income, which is 0.3% of the economy. That's why taxes are so high!
If we were to tax payments instead of income, we could reduce the tax rate to 0.2%.
TABLE OF PAYMENTS
Here's a Breakdown of the Payments in Our Economy
The Federal Reserve tracks the above payments, and the Bank for International Settlements publishes the data in its annual Red Book (click United States, see Tables CTA 1 and CTA 2).
WHY IT WORKS
In 1913
When income taxes were first imposed, income was the right thing to tax.
Henry Ford shocked the world when he paid his employees five dollars per day. Workers could produce more with machines, so their value increased. Both income and production grew.
Then Everything Changed
Automation changed everything in the 1970s. Wages have been flat for the last 50 years, while production has continued to increase.
Automation caused a shift in jobs to the financial sector, which gave rise to unprecedented growth in the monetary economy. The volume of payments left our income in the dust.
HOW IT WORKS
How a Payments Tax Would be Implemented
A payments tax would entail debiting a very small amount of each and every payment anyone receives.
