Table of Contents


1. Tax System Fundamentals

No Tax On Tax

Taxes should not be charged on taxes within the same transaction. All percentage-based taxes should be based only on the actual pretax cost of the good or service at the point of sale. For example, it would be wrong if a $10 product is charged an excise tax of $2 as well as a sales tax of 10% that is based on a $12 cost of the product. If the 10% sales tax is based on the $10 cost of the product, there would be no violation because the $2 excise tax would not be included in the factoring of the 10% sales tax. The correct cost of the product would be $13. If a purchaser (such as a retailer) who bought this product for $13 and resold it for any other amount, say $20, then $20 would become the new base price.  If a 10% sales tax is applied, the product would then cost a buyer $22.  All previous taxes charged during that product’s history would be irrelevant since this is a new transaction.

Party Receiving Payment Must Pay Tax

The party receiving the money in exchange for a good or service should be responsible for paying the taxes on that transaction. This is normally what occurs when people buy things at a store–the customer pays for the items and all applicable taxes, and the store is responsible for properly distributing those tax dollars. This principle should apply to all tax payments.  Nobody should ever be reimbursed for any extra costs they incur for collecting taxes, unless that entity was unjustly required to go through an extra expense of time, money or other resource.

Payroll Tax

For example, all payroll taxes should be paid by the employee–the person receiving the payment. Employers buy labor from employees, so employees are the people receiving the money and they should be the people responsible for paying the taxes. The employer should not be required to pay any portion of these taxes.  Although the employee can request that the employer pay these taxes from the employee’s pay to make life easier, the employer could refuse to do so, or the employer could charge a fee in order to do so. It is the employee’s responsibility to make sure that the tax is arranged to be paid and is actually paid.

Barter Tax

The market value of bartered items should be taxed at regular sales tax rates. Each party to the barter arrangement would be responsible for paying the tax based on the estimated market value of the bartered items. Receipts for bartering transactions would be created, as they should for all transactions, and they should state the estimated market value as well as the sales taxes due.

Estimated Tax Payments Should Never Be Required

Nobody should ever have to pay an estimated tax. Only known tax bills should be paid. By definition, an estimated tax is one which nobody really knows the amount, because it is too early to have finished all the calculations necessary for a definitive determination. If the people charging the tax can’t wait until a final tax amount is determined, they’ll need to speed up the process used for finding how much tax is owed. The best way this could be done is by dramatically simplifying the tax code so that people could more quickly determine any tax obligations and by charging taxpayers as they earn their income throughout the year.


2. Tax Only Active Economic Activity

Tax Active Economic Activity

Since governments are the primary parties responsible for creating and maintaining an environment where fair economic activities are free to take place, it is reasonable to fund this effort and compensate governments by allowing taxes to be charged upon each economic transaction that takes place. Governments should raise the vast majority of their revenues through the taxing of active economic activities (namely, sales taxes on all goods and services).

Proportional Sales Taxes On All Transactions

As a rule, a proportional sales tax should be levied on all active economic activities. Active economic activities would be defined as any activity in which a good or service was exchanged for another good or service. In other words, virtually every good or service sold would be subject to a sales tax.

To adequately illustrate the pervasive nature of this type of sales tax, examples would include labor (wages/income), food, rent, real estate purchases, gambling purchases, stock and bond purchases, investment income (such as stock dividend payments, real estate income, interest income, etc.), utility purchases (water, electricity, natural gas, etc.), business-to-business sales (when sold to distinct economic entities), purchases by non-profits, purchases by governments, and all other goods and services at the point of sale regardless of who the parties to the transaction may be. The sales tax applied to all these transactions would be the same. If governments need more money, they would raise the rate, or if they need less, they would lower the rate. Never should different sales tax rates exist for different goods or services within the same political jurisdiction. That would inevitably lead to unnecessary complexity of the tax code.

Non-Profit Organizations Should Not Enjoy Any Tax-Exempt Status

These organizations (churches, charities, educational, etc.) should pay taxes at the same rate as everyone else.

Passive Economic Activity Should Not Be Taxed

Passive economic activities, which are activities that do not include the buying or selling of a good or service, should not be subjected to any form of taxation. Examples of passive economic activities include the appreciation in the value of goods (capital gains), merely owning goods (such as property), gifts (including tips (gratuities), etc.) under $500,000, inheritance or estate transfers under $500,000, compensatory payments (such as insurance payouts for damages), catching a ball that was hit into the stands or other sports memorabilia gained in such manner, and other such instances in which economic activity takes place without a corresponding exchange of goods or services.

Any gifts, inheritance or estate transfers with a cumulative value of over $500,000 should have this excess value treated as income taxed accordingly.


3. Progressive Taxation

The tax code should be progressive for two main reasons.

#1 Same Basic Needs For Everyone

First, because everyone has basically the same biological needs, thus roughly requires the same amount of physical necessities to live at a basic level of comfort, it follows that everyone requires a certain amount of resources (usually denominated in currency) to provide for these necessities which they have little to no choice (little or no discretion) but to purchase. The lower the income level of an individual, the higher the percentage of their income is dedicated for such basic, non-discretionary needs. As income levels rise, a smaller percentage of such income is dedicated to meeting the basic needs like food, clothing and shelter. Conversely, as incomes rise, a larger percentage of that income is classified as discretionary, meaning that the earners can relatively easily choose to spend it on things other than essential elements.

#2 Those Who Benefit More, Pay More

Second, because governments have the responsibility to create and maintain stable social and economic environments that facilitate economic activity, thus higher standards of living (namely, greater discretionary income), it is reasonable to require those who have successfully worked to enjoy a greater realization of these potential benefits, to pay a higher tax rate as a form of compensation, acknowledgement and gratitude to the government and by extension to the greater society from which the government was formed.

Income Tax Makes Tax Code Progressive

Income, both for individuals and businesses, is the best single variable to target in order to make the tax code progressive. If done correctly, this should be the most significant manipulation of the tax code for purposes of making it more fairly progressive. However, another tool could be a luxury tax applied on luxury items, such as personal yachts and airplanes, mansions, high-end jewelry, etc.


4. Ban Tax Deductions, Credits, Exemptions, Pre-Tax Money, & Other Tax Tricks

As a rule, all of these tax reducing methods should be eliminated. The tax code should be kept simple and any exceptions to the code should be kept to a bare minimum, be temporary, and have very valid justifications. Thus, things like charitable giving should not be allowed tax deductions, neither should the depreciation of any assets qualify for tax credits. Under the closing of these loopholes, child tax credits would also disappear, as would tax-free retirement contributions. The tax-exempt status of all non-profit organizations should also be eliminated so that they are required to pay the normal tax rates required of all other economic entities.

All these tax reducing tricks make the tax code too complicated, and this complexity directly causes the following negative effects:

1. Taxpayer frustration due to too many rules to follow and things to research to make sure they are not missing some ‘hidden’ benefits that apply to them
2. An increase in the taxpayer’s amount of time and/or money necessary to figure out and prepare taxes, or to pay to have someone else prepare them
3. Such complexity produces a regressive tendency to the tax code because the wealthy can afford to find the tricks to reduce their tax liabilities while the person holding two or three jobs cannot afford the same luxury
4. Increases the need for completing complicated yearly tax forms that serve as a functional framework allowing all these complex tax rules (tricks) to be woven together with some sort of coherence
5. Increases the ability of special interest groups to dramatically warp (and complicate) the tax code
6. Increases the general lack of faith in the fairness of the tax system
7. Wastes paper, postage and labor

Why have a complex tax code, if a simple one will do the job? The complex one will have higher overhead costs and, because of its complexity, will be perceived (whether correctly or incorrectly) as being inherently unfair. In the end, whether the tax code is simple or complex, the government is going to collect all the money it needs to operate. On average, tax incentives for whatever causes do not result in tax savings, because that just means that everything else will be taxed more to make up for the difference. In addition, these tax incentives work to create unbalanced, unnatural market places. A properly constructed simplified tax code could provide many of the benefits that tax incentives were created to provide.  The tax code needs to be consistent and everything needs to be taxed according to the same rules. Otherwise, the free market will not be truly free to function as intended.

Individual/Joint Tax Return

There should be no such things as joint tax returns. Everyone should file his or her taxes individually and separately.


5. Tax Trade Across Political Boundaries

Trade across political boundaries should be taxed. Generally, the more significant the political boundary, the higher the tax rate (tariff). This tax wouldn’t apply to people who buy things within the same jurisdiction or who travel to one political jurisdiction and buy things within that same jurisdiction. It would only apply if the seller ships the item to the customer in a different jurisdiction. Trade across city boundaries would be lowest (perhaps 1%), counties would be higher (perhaps 3%). Interstate trade would be taxed at an even higher rate (perhaps 5%) while tariffs of at least 10% should be levied on all imported goods and services which cross an international border. These taxes would tend to prevent the formation of large super-efficient businesses which often gain very large portions of market share. These taxes would also make it easier for smaller, ‘mom-and-pop’ businesses to open up and succeed.

For countries with human trafficking or other forms of immoral behavior that is not tied to a specific product, import taxes (tariffs) should be levied on all imports from that country so that there is an effective economic incentive to cease such practices.


6. Buyer’s & Seller’s Sales Tax Charged On All Transactions

When buyers and sellers, who are each located in different political jurisdictions, engage in an economic transaction (the buying and selling of goods or services), the sales tax rate in each, the buyer’s and seller’s political jurisdiction, should be applied to the transaction. The buyer should be required to pay the sales tax rates for both jurisdictions in which the transaction is taking place.

For example, if someone in the city of Los Angeles, wants to buy a $20 book from a company in New York City, the buyer would be required to pay both the 9.75% sales tax rate of Los Angeles plus the 8.875% (for example) sales tax rate of New York City. In other words, the buyer would be required to pay a 18.625% sales tax on this purchase, bringing the cost of this transaction to $23.73. The seller would be responsible for distributing the collected taxes to the appropriate governments.

Some states charge ‘use’ taxes which are rarely collected because of the often self-reporting nature of the tax, lax enforcement and general ignorance about this tax. This proposal would standardize this tax principle for all transactions, wherever buyers and sellers reside.

Such a tax structure would tend to encourage more local economic transactions, thus favoring smaller, ‘mom-and-pop’ businesses as opposed to larger, more efficient business.

Sales Tax Apply to Portion Actually Paid

A sales tax should be applied to only the actual price paid for a product or service.  When there are special discounts, coupons, promotions, 2-for-1 offers, rebates, contracts, etc., the sales tax should only be based on the actual price that customer ended up paying. If a merchant gets reimbursed by a third party (like the manufacturer) for the value of the rebates or discount, then it should be the merchant that would be required to pay the sales tax on the portion for which they reimbursed the merchant.

For example, tax regulations concerning a cellphone (e.g., $600 full value) sold at a discounted price (e.g., $200) as part of a contract for one or two years, should only only require the customer to pay a sales tax based on the actual price the customer paid ($200) for the phone.


7. Distinct Nested Entities Treated as One for Tax Purposes (Revenue, Market-Share, Profit Taxes)

Corporations, companies and other business entities as well as their wholly-owned subsidiaries or portions thereof should be treated as single entities for purposes of tax law. A corporation, company or other business entity which has acquired, merged with, or otherwise controls one or more other corporations, companies or business entities, should be treated as one entity referred to by the name of the top controlling economic entity within which all these other entities are nested. Revenue taxes, market share taxes and profit taxes would all be based on the combined revenues, combined market shares (within each market category), and combined profits of all of these distinct nested businesses.

If a daughter company is owned only partly by a parent company, say 60%, then only 60% of this particular daughter company’s revenue, market share figures, and profit should be added to the parent company’s figures to determine the parent company’s tax obligations. Conversely, the daughter company would only have to pay these same kinds of taxes based on only the 40% of its own company which it owns.


8. US Territories and Possessions: Representation and Taxation

US territories and possessions should be guaranteed one seat in the House of Representatives for every twice the average number of people represented by each Representative of the 50 states. For example, if 600,000 is the number of people represented by the average member of the House of Representatives, then, for a US territory or possession to be allowed a representative, it would need to have a population that rounds out to 1.2 million (2 x 600,000) instead of rounding to zero. In other words, territories and possessions would be entitled to one representative for every 1.2 million people. Thus, they would be required to have a population between 600,000 and 1.8 million to get one representative. To get two representatives, their population would need to average to 2.4 million, or fall between 1.8 and 3.0 million people, and so on.

Under this formula, only Puerto Rico would be eligible to elect a Representative, in fact, it would be entitled to three Representatives because it has a population of nearly 4 million. All other territories and possessions would not be eligible because of insufficient populations.

Because these territories and possessions are not fully permanent members of the US, they should not be entitled to full representation. But because they are part of the US, they should be entitled to some representation. Half as much representation compared to the regular US population seems fair.

However, because these areas are part of the US, and because these territories do receive half as much representation (regardless of whether or not they actually have Representatives due to rounding), all territories and possessions should be subject to half the federal tax rates charged in the US. For example, if a federal tax on something is 2% in the mainland US, then these territories and possessions would be levied a 1% tax.


9. Export Taxes

As a general rule, special export taxes or tariffs (as opposed to standard Political Boundary Taxes) should not be levied, although each country has the right to impose whatever level of export taxes or other restrictions it wishes on any of its exports.

Export taxes should ideally be levied on products which the national government may want to reserve for domestic supplies or use for other internal purposes. Petroleum and other mineral reserves are perhaps some of the clearest examples. High-end computing equipment, and other advanced technologies are other examples.

Export taxes should also be levied on products or services (mainly military) which may negatively contribute to political or military stability elsewhere around the world. Such a tax may help slow the speed of military escalations and reduce the intensity of arms races. A ban, rather than export taxes, may be the better option for many categories of military equipment.


10. Income Tax & Negative Income Tax

Income tax rates (for all entities, including individuals and businesses) should be progressive but calculated using a smooth algebraic formula rather than inherently unfair tax brackets and should be based on total gross yearly earnings before any deductions for retirement contributions, tax payments or anything else are made. Income from all sources, including labor, investment income, gambling winnings and punitive awards, should be included, except income meant as direct compensation for a loss (such as compensatory insurance monies). Gifts, tips and inheritances are also not required to be included.

Since income is an active economic activity, the sales tax would be applied to it. Everyone, including the very poor, must pay the standard sales tax rate on the income they earn. This sales tax, in effect, would be their income tax. A specific income tax would be levied on any individual making more than $50,000 per year.

Negative Income Tax

A negative income tax (NIT) would be paid out to all adult citizens (any citizen 16 years and older will qualify, but at a half rate until age 18, when full rates are provided) to dramatically simplify (or in some cases eliminate) the administrative costs associate with a plethora of other welfare programs. In addition, an NIT would eliminate the perverse incentives, known as the ‘welfare trap’, that often result within other aid programs, when the consequences of earning any relatively small income cause the recipient to become ineligible for continued aid payments, which, in effect results in a significantly smaller overall income.

The formula used for calculating personal income tax rates will be higher than that used for calculating business income tax rates in order to better fit each category’s revenue ranges.

Instead of using tax brackets, a much fairer way to charge income taxes is through the use of a smooth algebraic formula that generates a slightly higher tax rate for each additional dollar of income. The charts below give examples of various income levels and the tax rates that would be associated with those levels according to this smooth algebraic formula.

Individual Income Tax Rate Proposal

Tax Rate Total Income Taxes Paid Net Income
0% $0 -$12,500 $12,500
0% $10,000 -$10,000 $20,000
0% $20,000 -7,500 $27,500
0% $30,000 -$5,000 $35,000
0% $40,000 -$2,500 $42,500
0% $50,000 $0 $50,000
5% $100,000 $5,000 $95,000
10% $250,000 $25,000 $225,000
20% $500,000 $100,000 $400,000
30% $1,000,000 $300,000 $700,000
40% $5,000,000 $2,000,000 $3,000,000
50% $10,000,000 $5,000,000 $5,000,000
60% $50,000,000 $30,000,000 $20,000,000
70% $100,000,000 $70,000,000 $30,000,000
80% $1,000,000,000 $800,000,000 $200,000,000
90% $10,000,000,000 $9,000,000,000 $1,000,000,000
95% $100,000,000,000 $95,000,000,000 $5,000,000,000
99% $1,000,000,000,000 $990,000,000,000 $10,000,000,000


Business Income Tax Rate Proposal

Tax Rate Total Revenues Taxes Paid Net Revenues
0% $0 $0 $0
0% $1,000,000 $0 $1,000,000
10% $10,000,000 $1,000,000 $9,000,000
20% $100,000,000 $20,000,000 $80,000,000
30% $1,000,000,000 $300,000,000 $700,000,000
40% $10,000,000,000 $4,000,000,000 $6,000,000,000
50% $100,000,000,000 $50,000,000,000 $50,000,000,000
60% $1,000,000,000,000 $600,000,000,000 $400,000,000,000
70% $10,000,000,000,000 $7,000,000,000,000 $3,000,000,000,000
80% $100,000,000,000,000 $80,000,000,000,000 $20,000,000,000,000
90% $1,000,000,000,000,000 $900,000,000,000,000 $100,000,000,000,000
95% $10,000,000,000,000,000 $9,500,000,000,000,000 $500,000,000,000,000
99% $100,000,000,000,000,000 $99,000,000,000,000,000 $1,000,000,000,000,000

11. Market Share Tax

Businesses should pay a progressive tax based on their market share (new sales only, not existing products or services in circulation) so that as their market share increases, the rate of this tax increases. The market share of each business would be determined for every political jurisdiction in which that business operates or to which it sells (city, county, state, national, and perhaps even international). Due to different markets having significantly different characteristics such as the number of suppliers and consumers, types of products sold, and other market particulars, it is reasonable that each market should have slightly different progressive market share tax rate schedules. A company that sells one or a few products or services can determine its market share within a political jurisdiction by dividing the number of products it sold in that jurisdiction by the total number of same or similar products sold by all other suppliers in that same jurisdiction. For companies that sell a wide variety of similar products, market share would be determined by grouping their sales into categories and dividing the number of products they sold within each category by the total number of products sold by all other suppliers within the same category. The government, in cooperation with the market participants, would be responsible for defining such categories and would also be responsible for compiling the final sales figures for all market participants for each product or category of products for all relevant political jurisdictions to use in determining their market share.

To prevent this tax from becoming a burden and aggravation to clearly small businesses that do not significantly threaten market stability, all companies who comprise less than 15% of the market share should not be required to pay any of this market share tax.

Constructing the Tax

The rule of thumb should be that a larger number of providers would lower the market share threshold for triggering this specific type of tax. The table below describes the tax rate structure for markets with different numbers of suppliers.

Market Share Tax Rate Proposal

Number of Suppliers Proportional Market Share Allowable Market Share –
Market Share Tax triggered at these rates
Difference between Proportional and
Allowable Market Share Rates
Before Tax is Triggered
1 100% 100% N/A – No Tax
2 50% 85% 35%
3 33.3% 60% 26.7%
4 25% 40% 15%
5 20% 30% 10%
6 16.6% 25% 8.4%
7 14.3% 22% 7.7%
8 12.5% 20% 7.5%
9 11.1% 18% 6.6%
10 or more 10% or less 15% 5% or more (theoretically up to 15%)


We will use the airline industry to show how such a tax may be implemented. Airlines, like many companies, often use cross-subsidies to enhance their position in markets where others may have the natural advantage. The amount of such a market share tax could vary widely but should always be determined after factoring in all relevant variables, namely the number of producers/suppliers in the specific market and the degree of market share attained by each supplier.

The actual tax amount would be determined by multiplying the degree (in percentage points) that a company exceeds its allowable market share on a specific route by the total revenues that company generates on that route. For example, if a total of three airlines offer 20 daily flights between two cities, and airline #1 has 14 of those flights, that would constitute a 70% market share (let’s assume that each plane has the same number of seats). Let’s say airline #2 has 4 daily flights and airline #3 has 2 flights. Under the rules of this proposal, airline #1’s 14 daily flights would constitute a market share of 70%, thus triggering this tax. Thus, the airline exceeded this limit by 2 flights (equivalent to 10% of the market). Assuming that each flight grosses that airline $10,000, a total of $140,000 would constitute its daily revenues. The actual dollar amount of this market share tax would then be determined by multiplying the $140,000 total revenues generated by participation in the market in which it exceeded it allowable limit, by 10% (equivalent to the excess participation rate in the market). Therefore, this airline’s market share tax would be $14,000 per day. The airline could avoid this tax by reducing its flights to a maximum of 12 per day in this market.

Purpose For This Market Share Tax

The purpose of this tax is to help ensure stability, fairness, competitiveness, and opportunity within markets, mainly by making it more difficult for any one or a few companies to control the vast majority of the market. This tax is also designed to help ensure that if the top market supplier is suddenly eliminated from the market due to some crisis such as a strike, bankruptcy, destruction of production facilities, or other occurrence, there would be enough excess production or service capacity among all the rest of the market suppliers to help the market weather the crisis without society suffering significant product or service shortages and without precipitating acute price volatility or sending destructive price shocks throughout the market or wider economy. Market share dominating suppliers could also potentially cause havoc by making certain business decisions such as drastically increasing prices, lowering production levels or lowering the quality of production. By progressively taxing businesses that increasingly dominate market share (thus increasing their operating costs), they would be discouraged from ever attaining such large sizes that would inherently result in the creation of potentially unfavorable or even disastrous market conditions.

In some industries, especially electronics and computing, an additional benefit of such a market share tax may be to encourage market participants to engage in greater cooperation to design standards that would benefit the industry (and society) as a whole since it would be harder for any single company to gain and maintain such a large market share to make it profitable for it to maintain its own proprietary standards and/or infrastructures.


12. Profit tax

A progressive tax specifically on profits should be levied on businesses with total revenues that exceed $1,000,000 per year, and whose profits exceed 1% of total revenues. To calculate this tax, each qualifying business would need to multiply its rate of profitability (total revenue minus all expenses, including taxes) with the actual amount of profit.

Profit Tax Example

To see how such a tax would affect profits, let’s use the example of a business which earned a total revenue of $2 million, $1.8 million of which went to pay all business expenses and the remaining $200,000 being profits. Since this profit amount is equal to 10% of its total revenue, then 10% of this $200,000, or $20,000, would be required to be paid to fulfill the profit tax. If instead of $200,000 this business had only a $20,000 profit or less, it would fall below the 1% profit threshold for this tax, thus no profit tax would be owed. On the other hand, if this business had a $1 million profit, this would equate to a 50% profit. Therefore, 50% of this profit, or $500,000, would be owed to fulfill the profit tax.

Purpose For This Profit Tax

The reason for such a tax is that extraordinarily large profits for one or a few companies indicate an imbalance in the market, namely not enough competition. When one company can consistently earn large profits as a percentage of its revenue, that means that its price for the product or service offered is too high. Such a tax as this would further encourage other companies to enter the market and operate successfully at lower profit margins. It is not the government’s place, nor would it be fair for it to set absolute targets or limits on any business’ profitability, however, a general structure of discouraging super large profits could and should be created. This type of system would also help discourage price gouging and would help make the economic environment a little less favorable to giant, super-profitable businesses, increasing the economic space for smaller, mom-and-pop businesses.


13. Pollution Tax

Every unit of pollution released into the environment by human activities, beginning with the first unit, should be taxed or penalized. Whether the pollutant is emitted as a natural part of the production process or as a result of an accident, each unit should be taxed at the same rate. Generally, penalties should be directly proportional to the amount of pollution and penalizing each unit (of any given pollutant) at the same rate is the fairest, simplest, and most effective way to reduce pollution from all sources, whether they be point, non-point, or mobile sources of pollution. Each type of pollutant should be penalized at different unit rates because each pollutant negatively impacts the environment in a different way and to a different degree. The per-unit penalty for each pollutant should be set through agreement between scientists, government and industry, perhaps during discussions taking place during industry congress meetings.

There should be no such things as allowable emission levels, mandatory pollution caps, emission permits, emission trading, pollution credits, etc. Everybody should be allowed to pollute as much as they want, so long as they pay the fixed penalty for each unit they release. If the penalties for each unit of pollution are set correctly, there would be no significant pollution crisis. If there is a pollution crisis, we can simply increase the per-unit penalty for that pollutant or, only with extremely valid reasons, we could use an exponential pollution fine structure (where a higher rate is paid for each additional unit of pollution released) as opposed to a proportional one.

Each unit of natural gas that is flared should be charged a tax as should also each component of the various pollutants discharged with that natural gas. The idea is to encourage the capture and sale of this non-renewable resource, because we are definitely going to wish we hadn’t wasted so much of it so frivolously when we are on the down slope of the global production curve.


14. Natural Environmental Harvest Tax

To minimize human induced pressures on natural ecosystems as well as to encourage greater recycling efforts, a natural resource extraction tax of between 10-15% of the raw material’s value should be levied on all biological (fish, trees, etc.) and non-biological (coal, oil, iron ore, etc.) virgin extractions from the natural environment.


15. Vehicle Miles Traveled Tax

A tax should be charged on all vehicles (cars, trucks, motorcycles, buses, etc.) for every miles (or kilometer) traveled. These vehicles, which almost exclusively benefit from and use these road, can be reasonably required to pay for their construction and upkeep. A variance should be allowed in the rate of this tax so that heavier vehicles, like trucks, pay proportionally more than lighter ones due to the greater damage they inflict on roadways under normal operations. Motorcycles should pay among the lowest tax per mile.

The ultimate level of this tax would be set so that it is sufficient to cover all costs associated with roadway infrastructures.

Related Taxes?

Additional types of vehicle use taxes could be constructed to address other concerns, although additional software and infrastructures would be necessary. For example, congestion pricing could impose a tax on driving during times of high congestion so as to encourage people to drive at off-peak hours. Road pricing could impose a tax on vehicles using certain roadways, such as express lanes, or even commonly congested routes to encourage people to use alternative routes.


Perhaps bicycles should be exempt from these taxes because they are so light, they do not necessarily require the infrastructural investments of heavy roadways for their operation, because they would require the installation of odometers and because it would require a system of annual (or periodic) registration to enable an effective enforcement. All of this is doable, and perhaps should be done, especially if bicycle ridership increases to become a major mode of transportation. If bicycles are imposed this tax, they should obviously be the lowest of any other vehicles because of their minimal demands of infrastructure.


16. Junk Food Tax

A junk food tax of at least 15% should be levied on ‘junk foods’ that exceed a certain calorie-to-nutritional value ratio as determined by an unbiased organization of food and health professionals. Generally, foods containing excessively high amounts of saturated fats, salt, fat, carbohydrates and/or sugar would be classified as junk foods. Soda and French fries would fall into this category. Although each country should, at the very least, develop its own ratio which would define the boundaries of junk food, the ideal approach would be to work towards developing a global standard definition of junk food by agreeing and adhering to one common ratio. Therefore, a United Nations body or another reputable international health organization should eventually be responsible for developing the definition of junk food and coming up with a calorie-to-nutritional value ratio. Nevertheless, it may not be practical to have just one ratio applied to the definition of junk food globally due to the infeasibility of applying the same standard to dramatically different cultural dietary norms.

Salt and Sugar Tax

Additionally, salt and sugar packages intended for human consumption should also have special taxes imposed, but only at the wholesale level. A retail level tax would be too labor intensive logistically and overly complicate the tax system at the retail level.  This wholesale tax should be set perhaps at around 15%. This tax would naturally be reflected at the retail level to contribute to the desired effect of reducing the human consumption of salt and sugar.

Liquor and Tobacco

Liquor products should also fall under this junk food category and be levied this tax. Tobacco, although not a source for any significant amount of neither calories nor nutritional value, nevertheless should also be defined as a junk food.


17. Foreign Sales Revenue Tax

Businesses or corporations based or headquartered in one country, but with significant sales in a foreign country, should have those sales in that foreign country treated, for tax purposes, as if they were revenues generated by independent businesses within that foreign country.

For example, Sony Corporation is a Japanese-based business having total global sales revenues (2008) of $79 billion including US sales revenues of $20 billion. For Japanese tax purposes, Sony should be taxed on its total income of $79 billion. But for US tax purposes, Sony should be taxed just as though it were a $20 billion US-based business. These US tax revenues should be paid to the US government.

This would provide a significant economic disincentive for producers operating in foreign markets. It would also help discourage companies with large US-based operations from moving their headquarters offshore just to get away from paying US taxes.


18. Bycatch Penalties

To reduce the amount of collateral environmental damage during harvesting activities, fines should be imposed for each biological organism that is unintentionally killed, harmed, captured, or otherwise negatively affected during the process of normal fishing or environmental harvesting activities. The amount of such fines may vary with each species to reflect each species’ environmental value to its ecosystem, its rarity or legally protected status, or its risk of extinction.

For example, a dolphin becoming entangled and injured within a tuna fishing net would result in a $50 fine. If the dolphin were to die because of the entanglement, the fine could be $100. Another example is shrimp harvesting which results in large amounts of collateral damage occurring to the biology of seafloors. In case like this where it would be prohibitively time consuming and expensive to count all the species affected, other methods can be used, such as imposing a penalty based on the percentage of bycatch to total catch. The higher the percentage of bycatch, the higher the penalty.

Such a policy would encourage the development and adoption of technologies that increase the accuracy of targeted harvesting methods while minimizing damage to fisheries and other parts of the ecosystem.

If the penalties were set to correct levels, the free markets would function to adequately enforce such regulations. For example, one possible easy solution would be to require the video recording of every catch as it is hauled onto the boats. Such videos would be reviewed either in real time or later by inspectors and fines would then be determined. The penalties associated with violations for failure to adequately record the catches, either due to forgetting to turn the equipment on, equipment malfunction or whatever other reason, should result in penalties sufficiently higher to make the fishermen wish they had not forgotten to turn on their equipment, had installed fail-safe technologies that would have warned them about malfunctioning equipment, or taken whatever other measures would have been necessary to avoid the penalties.


19. Weapons Environmental Tax

All military weapons or munitions that have any measurable or significant negative environmental effect when used (such as bullets, bombs, and almost everything else), even if such an effect is merely inert litter, should be assessed an environmental tax based on the degree of their negative environmental impacts. Almost by definition, such munitions will ultimately end up as litter in the environment.

Assess Tax On Purchase, Refund If Necessary

Ideally, these taxes should only be imposed when these weapons are used in war, during practice, or lost or destroyed by accident resulting in munitions polluting the environment (due to plane crashes, ships sinking, etc.). However, such records would be too difficult to maintain, so imposing this tax upon purchase would be much easier. Then, the military purchaser could receive a full refund of this tax when they decommission and recycle those weapons that were never used and properly disposed. This way the military would have a small economic incentive to use less polluting weapons when they become available.

Tax Components

Some factors to be considered when determining the proper level of the environmental tax for each weapon or munitions should include the absolute quantity of pollution released by the weapon, the scale of environmental contamination (esp. what fraction of all contaminants has been injected into the ground and/or water, with less of an emphasis on air pollution), persistence of each pollutant in the environment, harmfulness or toxicity of each pollutant to the biosphere, etc. Every part of the weapon/munitions should be considered, including chemicals (and their common chemical descendants in the natural environment), explosion gas products, shrapnel, and any other debris directly originating from the munition. This tax could be itemized for each pollutant (regardless of weapon type) so that the military knows exactly how much each weapon will be taxed and how such a tax breaks down per component. For example, if one munition has 2 ounces of mercury, 10 ounces of lead, and 50 pounds of steel, and assuming that the tax for mercury is set at $10 per ounce, and for lead it is set at $5 per ounce and steel’s tax is .10&cent per pound, it could be determined that the total environmental tax for that weapon would be $75. These tax rates could obviously be refined and updated as new information warrants. Even pollutants like steel, though not really chemically harmful to the environment, does litter the landscape with often sharp shrapnel and so should be charged a small environmental tax. Even though the same weapon may have significantly different environmental effects depending on the type of environment in which it is used, the differences being essentially wet or dry environments, only one tax rate should be applied to each pollutant for simplicity’s sake.

Benefits of This Tax

Apart from the clear environmental benefits, an additional significant benefit to such a policy is that this would indicate to our enemies and others that we are interested in minimizing the long-term negative environmental effects of war and that we are willing to take significant measures to protect their environment. Environmentally friendly weapons would send one, if any, positive message that an enemy could receive from its opponent during warfare, working to soften the rage, to various degrees, that an enemy population would have against its opponent.


20. War Tax

A war tax should be instituted for a specific purpose, like when the United States is engaged (or plans to be engaged) in a significant military intervention or war. This would be a a tax (like a sales tax) that would be imposed for a specific purpose and would expire once the conflict has ended.

This same principle could be applied for other purposes like Superfund cleanup site funding, nuclear decommissioning, etc.


21. Lottery & Gambling Tax

Lottery sales (and all gambling with a completely random chance of winning based on pure luck) should be levied special gambling taxes so that every level of government having jurisdiction over the location where the sale was made should each receive 10% of the purchase price of the ticket. For example, if a $1 lottery ticket were purchased in the city of Los Angeles, 10% of $1, or 10 cents, would be given to the federal government, 10 cents would be given to the state of California, 10 cents would be given to the county of Los Angeles, and 10 cents would be given to the city of Los Angeles. In other words, there would be a 40% gambling tax on the purchase price of that ticket in the city of Los Angeles. If any jurisdiction chooses not to levy their 10% tax, then the federal government should receive that share, as well. In addition to these gambling taxes, regular sales taxes would be added to the cost of the gambling ticket. Thus, in order for a consumer to purchase a $1 lottery ticket in the city of Los Angeles which has an 9.75% sales tax rate, that consumer would be required to pay a total of $1.50 for the transaction (40 cents for the gambling taxes plus the regular sales tax). If a $1 lottery ticket were purchased in an unincorporated part of Los Angeles County, then the gambling tax would be only 30% because no incorporated city exists at the point of sale to receive its 10% share.

The reason for this tax is to help prevent people from wasting their money on gambling. However, if people choose to gambling, governments should use it as a fundraising activity, namely, taxing such behavior for the benefit of reduced taxes for the rest of society.


22. Aesthetic Penalty Tax

A fine for aesthetic deficiency should be levied on properties that appear considerably unaesthetic in relation to the surrounding neighborhood and significantly below the community’s ‘average look and feel’. After a complaint about an unaesthetic property has been submitted, a group of trained, qualified evaluators, probably composed of community representatives, the city council, and/or others not directly acquainted with the parties involved in the dispute, would compare that property to others in the neighborhood and then assign an aesthetic grade to the property in question. Photographs of the offending property and other neighboring and similar kinds of properties in the neighborhood would be taken for reference purposes and to allow all members of the deciding committee to make comparisons. If the property is given a passing grade, no fines or any other action would be taken. If the property is given a failing grade, a fine would be applied that is proportional to the degree to which it failed. The minimum fine should be $100 for extremely minor offenses, like leaving a garbage can out past the allowable time. Furthermore, a notice would be issued to the property owner and occupant (if they are different people) requiring them to fix the aesthetic pollutant within one month or within another reasonable time period, at which time their will be another aesthetic inspection. If they fail this second inspection regardless of the degree to which they fail, the same time frame for compliance would again be issued but the original fines would be doubled.

Any individual may submit an aesthetic complaint concerning any kind of property, whether it is private, public, commercial, or anything else. Complaints about unsightly infrastructures, telephone poles, cell phone towers, poorly maintained landscaping, graffiti, illegal signs, and anything else could be allowed. However, any person submitting a complaint must be required to pay a $25 filing fee. Such a fee would help filter out trivial complaints. If such complaints prove valid, the fee would be returned. In addition, if a fine is assessed to the property owner, the original informant(s) who submitted the original complaint would be entitled to receive a significant portion of that fine as compensation and reward for informing authorities about the aesthetic violation.


23. Penalty Tax On Vehicles Not Meeting US Safety Or Pollution Control Standards

Safety Standards

All foreign vehicles entering US territory must meet minimum US safety standards. Such vehicles must be registered annually with US authorities to receive the proper approval. The same regulations and penalties should apply to foreign vehicles as apply to domestic vehicles, and the fees charged should cover all costs related to enforcement. Major safety concerns should result in grounding, but minor concerns should be fined sufficiently, varying based on their severity.

Pollution Fines

The fines for vehicle pollution should use the same regulations and penalties in effect for domestic vehicles, namely a fine for each unit of pollution of each type emitted. Perhaps odometer readings, hours of run time, or other measures could be taken both while entering and exiting the country to determine the total cost for such fines.


24. Electromagnetic Frequency Tax

The governments of all political jurisdictions (city, county, state, country, etc.) may regulate, tax and sell electromagnetic spectrum frequencies for active use. However, all levels of government (with permission from higher levels, if necessary) should have the right of eminent domain to any portion of the electromagnetic spectrum so long as they notify users with plenty of time and compensate them fairly for the costs and inconveniences involved in the transitions. Passive use of the spectrum (ex. telescopes, radio receivers) would not be taxed or regulated.


25. Tax Grammatically Incorrect Business Names Or Other Commercial Usages

There should be a tax on the commercial uses of incorrect spelling and grammar. For example, Krispy Kreme should be required to pay a tax for using these incorrect spellings. Another example would be when names and proper nouns are not capitalized on commercial products (books, movies, etc.). Written names like “adam smith” should be taxed, for example. This type of tax would help discourage incorrect uses of language and slow down and help prevent the corruption and evolution of the English language.