What Would Real Tax Reform Do for the Economy?

CONSTITUTIONAL THINK TANK SUBMITS REPORT TO CONGRESS

by ARRC

(Jan. 18, 2012) — Conference Room: Tax Reform; White Paper Report A-02-012 (G)

Green Paper Report A-02-012 (G): Public Consultation Process; Flat-Tax and Budgetary Reform Process as national security. GPO Style, Page Count; 11 Confidential Material ARRC © 2012

Operation: Limited Government: “The Peoples Stimulus Package.”

Authorizing Agent: The XVI Amendment; Revision of the Internal Revenue Tax Code [Passed by congress July 2, 1909. Ratified February 3, 1913]. “The Congress shall have the power to lay and to collect taxes on incomes from whatever source derived, without apportionment among the several states, and without regard to any census or enumeration.”

To: Members of the 112th US Congress, State Congresses and the American Citizenry.

From: Thomas J. Zaleski; Economics Officer, American Republic Research Center (ARRC)

Ref: Tax and Budgetary Reform as National Security

Date: January, 2012

Introduction: Good morning. We would like to welcome and thank all the members of Congress, the Departments, Agencies, the Diplomatic and Intelligence Corp that work hard everyday to restore the founding principles of the US Constitution. Today, we will outline the need and justification for Tax and Budgeting Reformation by outlining our current code, and then we will recommend what changes need to occur for a more reasonable code to pay-down our national sovereign debt. As history reminds us, a failed economic policy and tax systems quickly becomes a national security issue. By adopting these recommendations, we could easily overcome the current economic crisis and threat to our national security simultaneously. These recommendations will be in accordance with the XVI Amendment of the Constitution of the United States of America.

Forward: Most Americans and even most politicians will admit that our current tax code is a monstrosity and is too complicated to understand, interpret and follow.  Recently, noted economist Arthur Laffer’s group announced in the Wall Street Journal that the cost of compliance and compiling the tax and collecting the tax exceeds $431 billion![1] Originally the country collected its revenue through fees, tariffs, and fines as a system that worked well for over a hundred years.

In 1913 that changed with the ratification of the XVI Amendment which instituted the progressive income tax and the founding of the Federal Reserve Bank.

Let us be realistic, any real reform of the code is a political process so no matter how brilliant, simple, or effective a new proposed method of laying and collecting taxes faces the gauntlet of special interests and 535 men and women in congress with their own agenda.  Also, you have more than 330,000 CPAs, Public accountants, Enrolled Agents, and Attorney’s whose income would be dramatically impacted by the simplification of the IRC (Internal Revenue Code). [2] Note: The numbers are mere recommendations or starting points of discussion, period.

The current IRC or system, the Progressive tax, was established by Title 26 of the United States Code.  It is comprised of more than 9,000 sections, thousands of regulations, hundreds of bulletins, and revenue rulings, plus settled Federal Tax Court precedents.  Was this by design or has it become burdensome over the years as various sections were added and edited to accommodate a new idea from some member of Congress.  There hundreds of sections that provide tax credits or tax payer subsidies if a tax payer behaves in certain ways or purchases certain goods.  There is little doubt that understanding the code and being able to comply with it can be a daunting task requiring top professionals to prepare an individual’s tax return. Most experts agree that this current system must be reformed; the debate centers on an adequate alternative that is politically acceptable to our leaders and the people.

Background Notes: Taxable Income as It Stands Today; The IRS (Internal Revenue Service) Explains; “What is Taxable and Nontaxable Income”?  In the USA, what qualifies as “taxable income” is defined in the Internal Revenue Code Section 63.  “Gross income” is defined in Section 61 of the Internal Revenue Code. Taxable income can encompass more than just your annual salary.  Taxable income can include profits from stocks or real estate sales, winnings from the lottery, betting the dogs or horses, and winnings from any casino (domestic or abroad). Even the cash value of bartered items is considered taxable income.

Non-Taxable Income; Income that may be part of your gross income but is not identified as taxable income would include child support, proceeds from life insurance policies, inheritances, Workers Compensation payments, Welfare benefits, compensation awarded as a result of physical injury, education scholarships or grants, and income paid to your retirement account (either a 401k or IRA (Individual Retirement Account), up to a certain amount).

You can receive income in the form of money, property, or services. This section discusses many kinds of income that are taxable or nontaxable. It includes discussions on employee wages and fringe benefits, and income from bartering, partnerships, S corporations, and royalties. The information on this page should not be construed as all-inclusive. Other steps may be appropriate for your specific type of business. Generally, an amount included in your income is taxable unless it is specifically exempted by law.

Constructively-received income; you are generally taxed on income that is available to you, regardless of whether it is actually in your possession. A valid check that you received or that was made available to you before the end of the tax year is considered income constructively received in that year, even if you do not cash the check or deposit it to your account until the next year.

Assignment of income; Income received by an agent for you is income you constructively received in the year the agent received it.  If you agree by contract that a third party is to receive income for you, you must include the amount in your income when the party receives it.

Prepaid income; Prepaid income, such as compensation for future services, is generally included in your income in the year you receive it.  However, if you use an accrual method of accounting, you can defer prepaid income you receive for services to be performed before the end of the next tax year.  In this case, you include the payment in your income as you earn it by performing the services.

Employee Compensation; generally, you must include in gross income everything you receive in payment for personal services. In addition to wages, salaries, commissions, fees, and tips, this includes other forms of compensation such as fringe benefits and stock options.

There are also provisions for; Childcare providers and Babysitting, Fringe Benefits (whereby abstaining from the performance of services, under a covenant not to compete, is treated as the performance of services for purposes of these rules. Business and Investment Income, Partnership Income (generally is not a taxable entity), S Corporation Income (In general, an S corporation does not pay tax on its income. Instead, the income, losses, deductions, and credits of the corporation are passed through to the shareholders based on each shareholder’s pro rata share). Royalties are taxable as ordinary income and Bartering is an exchange of property or services.”

“Most systems and jurisdictions allow business taxpayers to reduce taxable income by cost of goods or other property sold, as well as deductions for business expenses. Many systems limit some sorts of business deductions. For example; deductions for automobile expenses are limited in the United Kingdom and United States. Some systems allow tax deductions for certain nonbusiness expenses. Such deductions may include personal expense items, such as a home mortgage interest deduction, and vary widely by jurisdiction. In addition, many systems allow deductions for personal allowances or a minimum deemed amount of personal deductions. The United States Federal system allows a deduction for personal exemptions, as well as a minimum standard deduction in lieu of other personal deductions. Some states in the United States allow few personal deductions.”

There are also Special Rules for Certain Employees, Clergy, Members of Religious Orders, Foreign Employer, Military, Volunteers, Business and Investment Income, Rents From Personal Property, Royalties, Partnership Income, S Corporation Income, Sickness and Injury Benefits, Disability Pensions, Long-Term Care Insurance Contracts, Workers’ Compensation, Other Sickness and Injury Benefits, Miscellaneous Income, Bartering, Canceled Debts, Host or Hostess, Life Insurance Proceeds, Recoveries, Survivor Benefits, Unemployment Benefits, Welfare and Other Public Assistance Benefits, Other Income Repayments, Method 1/Method 2. Taxable income, generally speaking, is the gross income of an individual or corporation, less any allowable tax deductions. Your taxable income is, in other words, the amount of your income.”

Source; IRS

Qualifications of the Individual and/or Organization Submitting; Thomas J. Zaleski is versed in the Milton Friedman’s Chicago School of Economics. Currently Thomas is the Treasurer and Economics Officer of ARRC (American Republic Research Center). Young, thoughtful and vivacious, Thomas has a vision so rarely seen in the world of politics and has also had a long acquaintance as a student and friend of the renowned conservative intellectual Mr. William F. Buckley Jr. for over thirty (30) years [“God and Man at Yale” in 1951, his hit television show; “Firing Line” and helped found the “National Review” magazine].

Recently in 2010 Mr. Zaleski gave a respectable showing as a strong conservative candidate for the Arizona House of Representatives. His high degree of integrity coupled with a Bachelor of Arts and Bachelor of Science Degrees in Finance and Economics gives Thomas a commanding lead far surpassing the knowledge of many other candidates in his expertise in economics. Such knowledge has also afforded him to gain experience in working for such companies such as; Hughes Aircraft, Smith Barney, Wells Fargo Securities and Morgan Stanly in Tucson, Arizona. Mr. Zaleski, versed in Capital Management, now runs his own office in Northern Arizona with his wife and children.

Overview:    Conclusions from a Comparison/Contrast Study between Fair Tax and Flat Tax.

Argument against the Fair Tax:

The Fair-Tax is flawed for a number of reasons. Mainly that it is “Not Fair”. Background for the Original Progressive, Flat, Fair, VAT Tax Code. The Fair Tax was first conceived in the 1990’s.  The basic idea is to eliminate the 16th Amendment and the IRS (Internal Revenue Service). This is a huge obstacle and very costly process that could take years. Taxing everything with a consumption tax on day-to-day purchase of food, sundries, and large items like homes and cars is the wrong way to go.  The proponents believe that the taxes accrued in manufacturing products will magically disappear and thereby reduce the overall cost of goods sold.  That is simply a major flaw in their idea.  The reasons are as follows:

1.        In manufacturing a company or entity large or small does not manufacture the entire product at one site, in one process, or without outside parts and supplies.  Take the manufacturing a computer:  There are manufactured parts on site that are fabricated from other parts, then parts are assembled, plus there are purchase parts outside of the corporation such as microchips, memory chips, wire harnesses, etc.  These purchased items from outside suppliers will have the Fair tax applied. At Raytheon the average product line is comprised of 70% purchase parts. So the theory, which is the entire foundation of the Fair tax, is violated. (Not to mention dealing with other nations including Indian Reservations).

2.        It is anti-Consumption.  Modern economies are very complex but rest on capital formation, allocation of various resources and consumption of goods and services from domestic and from imported items.  A tax on consumption will discourage consumption at some level which will retard the growth of GDP (Gross Domestic Product) and perhaps stagnate growth altogether.  The best way to reduce a deficit is to grow GDP.

3.        It is NOT fair to the lower income earner as they consume a substantial portion of their income (some estimates are 95% to 100%) on just basic items as food, clothing, etc.  Not only is this unfair in that regard it is political suicide to propose that some citizen that is merely on subsistence income level pay 23% of their gross income in taxation. (Rebate to the poor)?

4.        Larger purchase items like cars and trucks:  In Arizona our combined city, county, and state income tax is 9% to 10.5%.  Add that number plus the 23% fair tax to a purchase of a $30,000 car and it now costs the taxpayer more than $40,000.  Sales taxes of that magnitude necessarily will reduce the number of cars sold.

5.        Currently it is estimated that 47% of workers pay no federal income tax. (The number is hard to verify especially since millions pay no tax, not even payroll taxes.  If you receive a W-2 you pay at least 15.3% in taxes – FICA).  If a majority of that 47% pays FICA they pay taxes.  However, if you now add a fair tax plus 10% state sales tax most families in this category will have their taxes doubled or tripled.  That is another part that is political suicide.  By requiring the lower income to pay an obvious tax of 15% will help to make this sector of society more aware and involved in government.

6.        Another major factor that must be kept in mind.  We are discussing/analyzing a political process that is inherently subject to being politicized and corrupted.  Many outside factions/special interests/lobbyists will do their best to gain special recognition and special legislation to be applied to their situation, sector of the economy, or industry.  There have been thousands of executive orders signed by President Obama exempting individuals, groups such as unions, and corporation with DIRECT access to the President, exempting them from the new health care bill.

7.        The Black Market: Using as an example citizens that live near Mexico, Canada, or a Native American reservation purchases tobacco products at substantially reduced prices due to the absence of federal taxes.  This behavior would increase whereby citizens would be purchasing other high ticket items such as cars, appliances, manufactured homes.  Perhaps the Navajo’s could build factories to make cars or accept DIRECT imports from foreign nations where there is NO taxation of the Native Reservations. Also the black market of organized crime, private sales would be considered black market.

8.      Housing: A 33% tax on purchase of a $400,000 home? NO way.

The fair tax has been touted by many coming into the 2012 campaign, we don’t think that the candidates have considered it in depth; it looks good on the surface but will not apply equally to all and it will disproportionately harm the poor which is political suicide.

VAT or the Value Added Tax was first introduced in France in 1954.  The idea is to tax the manufacturing or other production as the product flows through the system and value is added at each stage through the efforts of labor added value or other purchase parts, etc are added to the eventual end product.  France not only has the VAT tax but also and income tax.  The results have been disastrous to France’s ability to compete globally.  Without the massive influx of very cheap labor from its former colonies in North Africa their competitiveness would be further weakened.  The unfortunate aspect of massive increase of cheap labor from North Africa, Muslim nations all, is a dramatically growing Muslim minority that has learned to demand more from the central government.  Muslim population is now about 5% of France but under the age of 30 they represent more than 30% of that segment.  Their birth rate in this class is 5.6 per eligible female in contrast to barely 1.1 for native French. [3]

Recommendations and Argument for the Flat Tax:  

Implementing a Flat-Tax that all working citizens pay into will reduce the amount of their respective payment and thereby help generate a stronger economy. Eliminating 100% of all deductions and special provisions of subsidies and tax credits will greatly enhance personal income and prosperity, but will negatively impact the following industries and professions temporarily.   

A.         Housing, banking, mortgage firms that have utilized the deduction of mortgage rates to help a larger segment of society to buy homes and those that can buy homes to buy larger homes with larger mortgages yielding these institutions with growing revenue.

B.         Charities: that depend largely upon contributions from all segments of society will have their benefactors lose the deductibility of these charitable contributions.

C.         Insurance companies that provide clever mechanisms such as Charitable Remainder Trusts that were created to mitigate or even eliminate the estate or death tax.

D.         CPA’s, Enrolled Agents, and Attorney’s stand to lose millions of clients through the massive simplification of the tax code.

E.         Internal Revenue Service may lose thousands of federal jobs that were created based upon the need of compliance, enforcement, and collection of thousands of types of taxes from a diverse universe of tax payers.  They will be left with audit compliance of those tax payers that are not paid via a W-2 or regular payroll but will be responsible for the audit of corporate taxes.

The adoption of a flat tax will automatically reduce the corrupting influence in the legislative process.  The corrupting special interest will have no ability to demand special provisions of the IRC and the representative or senator will have nothing to offer in return.

The Flat Tax must be applied uniformly to all entities including corporations large and small.  To exempt any entity is to invite continued corruption of the IRC via special interests, etc.  It is ultimately up to the people via their Senator and Representative how corporate income and expenses are defined.  What should hold constant is what is ordinary and necessary according to GAAP. [5]

Tax-Code and Budgeting Process:

In short we conclude and endorse the Flat Tax as the only fair tax because it affects all citizens, regardless of income, equally and without discrimination which is in line with the original intent of equal protection and representation. Keeping it in the proper prospective you should note that a flat tax of ten percent is an effective equal rate for all, but the actual tax paid is not the same; make a million dollars, pay one hundred thousand in taxes; make ten thousand pay one thousand (not counting the standard, and only, deduction that will be built in). Also, the flat tax does not require an amendment to the Constitution as it fits the parameters of the XVI Amendment. To those who believe that a flat tax benefits the rich with a low tax rate we submit that with no deductions or loopholes the rich will pay more than with any other system. The poorer will also pay the same rate but without the confusion of the present system they will know exactly how much income they can count on every week Most would be payroll deduction and not missed.

Because the flat tax is based on income, and has no deductions, there is less opportunity for corruption. Less tax cheating and no black market based on tax cheating means more money collected. The cost of collecting is greatly reduced. And the tax payer will know exactly how much money they will have for their own personal use; which will reduce one’s financial uncertainty.

Flat Tax: The Flat Tax idea is not a new one.  Dr. Arthur B. Laffer (supply side originator and Laffer curve developer) has been analyzing and discussing this concept for many years.  It has been adopted in the Russian Federation with strong success and other more moderate successes in former Soviet-Bloc Commonwealth of Independent States (CIS).  The basis is simple:  A Flat tax on all income at a much lower level than the current top tax bracket in our progressive system in place now.  It is proposed to have no deductions or exemptions.  Arthur Laffer has performed a recent study on the Flat Tax and he believes that 11.5% plus sin tax on alcohol and tobacco will auto balance the budget in ten years and substantially increase revenues to the treasury as it will capture taxation on incomes that have been protected by special provisions in the code.

Our concern with that is the alcohol/tobacco provisions which are holdovers from the current system. We propose a slight modification to Professor Laffer’s.  Married Filing Joint (MFJ) with two children earning (keep in mind changing the current system will take ENORMOUS political courage) $50,000 spends nearly all of that income just on the basics of food, clothing, housing, health care.

Additional Recommendations:

We propose to exempt the first $10,000 per taxpayer [4].  We also propose the 11% + 3% rule: Our proposal also differs in that we want a surcharge of 3% on top of the 11% estimate to pay down the national deficit and debt.  In these three (3) examples:

MFJ; 3 Dependents; $ 50,000.00, 2 Tax Payer Exclusions; $ 20,000.00                                                          Taxable Income; $ 30,000.00, Tax Rate of (11% plus 3%) $ 4,200.00                                                 Families Net Income: $ 45,800.00

MFJ; 0 Dependents; $ 17,000.00, 2 Tax Payer Exclusions; $ 20,000.00                                                          Taxable Income; (-$3,000.00), Tax Rate of (11% plus 3%) $ 0.00                                                 Families Net Income: $ 17,000.00

Single; 0 Dependents; $ 102,000.00, 1Tax Payer Exclusions; $ 10,000.00                                                          Taxable Income; $ 92,000.00, Tax Rate of (11% plus 3%) $ 12,880.00                                                 Singles Net Income: $ 79,120.00

 

Implementation and Operational Policy Guidelines, Activities Timeline and Outcome:

This law will affect all of the citizens of the United States, Alaska, Hawaii, its Territories and all Native American Indian Reservations and will supersede all other regulations and tax laws. This law will also be implemented within 30 days of passing congress and go into effect on the first day of the oncoming fiscal year, (October 1 to September 31), on October 1st. If passed after October 1 and ninety (90) day hence up to December 31, it will go into effect immediately. This tax reform policy will become the main doctrine for the IRS (Internal Revenue Service) of the United States of America and will continue as an ongoing policy for the next twenty-five (25) years herein were upon it can be extended for another twenty-five (25) year increment or made permanent. No modifications or nullifications are recommended until all sovereign debt reaches a zero balance and all Federal Government spending remains at or below and not to exceed $2 trillion [$2,000,000,000,000,000] US Dollars in their annual budgetary process at the Federal level as accounted for by the OMB (Office of Management and Budget) and the IRS (Internal Revenue Service).

Note: As an expected effect, State Budgets might or might not expand their tax level to 10% to cover the cost of programmes and/or infrastructure in their respective states due to any decentralization process and may raise their tax level congruent upon the will of the citizens of that state as per the Tenth Amendment.

Outcomes: The immediate desired outcome will be evident within the first fiscal year by allowing the tax payer to keep more of what s/he has earns thereby strengthening the overall economy of the nation by allowing the individual to keep more of their income and thus generating cash flow.  Also, allowing on and off shore American corporations to pay 20% directly with no write-offs or bail-outs thus reducing “crony-capitalism” and reinstituting real capitalism, will increase the treasury revenue by approximately 66%.

The intermediate results will be that the entire legal working age population, or work force, will become contributing members of society giving them a stake-in-the-game and thus more control in their and their country’s financial future. That has not been the case since 1913.

This flat-tax change in the Tax-Code will allow a more constitutionally traditional practice of having its entire wage earning citizenry pay taxes equally and its implementation is long overdue and should be given serious consideration.

 As far as the long-range results, our sovereign debts will be reduced to a zero balance thereby enhancing the country’s financial wellbeing and national security interests. The lives of our children will also become more inherently stabile and economically sound by the action we take here today.

Evaluation; Evaluations will be performed by the Office of Management and Budget (OMB), the Council of Economic Advisers (CEA) and the Office of Information and Regulatory Affairs (OIRA) in Washington DC. USA at the end of every fiscal year and will be submitted to congress and made available to the American people.

 

Funding and Calculation: There is no funding or allocations needed for the implementation of the policy. There has been considerable progress in the last thirty years in Benefit-Cost Analysis set forth for government agencies from Executive Orders #12291, #12866 and #13563 from Reagan, Clinton and Obama administration’s respectively. In the spirit of quantitative and monetary analysis we will use these ideas as a guideline for these analyses and we will attempt to show at what level a Flat-tax should be implemented to cover the proposed 2012 budget set forth in the Continuing Resolution (CR) of April 2011 concerning the $3.7 trillion proposed budget.

Knowing that there are mean incomes variations set forth in nine (9) different regions and from rural to urban areas as researched by the Bureau of Labor Statistics (BLS). For the purpose of calculation, a general view of income as a conservative estimate of mean income will be calculated by combining mean family income of $45,000, mean government income of $70,000 and mean corporate income of $160,000. This will give us an overall combined mean income of $91,600 dollars. This figure will be used for this calculation.

Personal Income Tax: Since ‘taxable income’ will start at $10,000, 151 million people constituting full and part time working citizens will be used to calculate the needed flat-tax to cover the current 2012 Budget of $3.7 trillion. The population count should adjust for the accounting for and from an 8.1% to 11.4% unemployment rate and those making under $10,000 and/or are on health and retirement plans. Neither inflation nor base-line budgeting will be used for the purpose of these calculations.

A Flat-tax of 14% will be used for the purpose of these calculations [down from the current 27%-56% now used] thus cutting personal national income tax already by nearly half.

The Calculation: Using a flat-tax of 14% [11+3 as above] we will carry out the calculation. Thus; $91,600 minus $10,000 non taxable income=$81,600 taxable x .14= $11,424 x 151 million people = $1,725,024,000,000 [$1.7 trillion].

The goal is still short by $2 trillion dollars.

Corporate Income Tax: However…By taxing all forms of Corporations only 20% [down from the 35% that they currently rarely pay] will help balance the deficit and give them a ‘stake-in-the-game’. The Mean Corporate income of 275 Fortune 500 companies is $102 billion dollars each thus totaling 28,050,000,000,000 trillion gross income combined. With ALL the Fortune 500 companies plus all other American corporations inside and outside our borders weather or not their main office is in Ireland, the Caymans, the Netherlands, Dubai or any other country utilizing the ‘Double Irish’ or ‘Dutch Sandwich’ as tax loop holes or non-compliance, will be expected to pay their income tax…No exceptions will be allowed.

For a working figure for all American corporations, $29 trillion gross income will be used.

Thus; 20% of $29 trillion = $5.8 trillion dollars. Yes…$5.8 trillion.

Using $2 trillion to cover the budget short-fall above, this will leave a 3.8 trillion dollar surplus within the first year of which we can pay off the Chinese debt of $2 trillion. The reserve surplus of $1.8 trillion will be used to start paying down the principle of our $15.1 trillion dollar sovereign debt while spending cuts; the down-sizing and/or decentralization of governmental departments, agencies and institutions ensue.

Multi-National Corporation Income Tax: Most International Tax Treaties with other countries will have to be renegotiated or the tax burden for MNC’s (Multi-National Corporation) will exceed their current level. Since protections for American corporations are given by law, reciprocal revenues should be collected. The 20% tax on a MNC will be paid to the US Treasury is both non-negotiable and nor will be allowed any exemptions.

Example: Let us use China for example which ranges anywhere from 15% to 25% tax for MNCs doing business over-seas. If the MNC is a ‘cutting-edge’ company that China wants, then their tax rate is lowered to 15%…If not it is 25%. High tech companies are given a larger tax break if the host country desires their “patents and knowledge” (pending copyright enforcement and national security interests). If high tech MNC-A is paying 15% in China, paying the 5% balance to equal 20% to the US would seem fair but skew the US tax revenue by a negative -15%. Therefore that is not acceptable. If MNC-A was low tech and paid 25% to China, they would under the new provisions NOT get a 5% rebate from the US. That would also be unacceptable.

What would be more likely to happen…Is that if high tech MNC-A paid 15% to China…They still owe 20% to the US, thus making their total tax burden overseas 35% as a cost of doing business…Unless they renegotiate their Tax Treaty.

Renegotiation example: If MNC-A pays 15% to China and 20% to the US where they are based then their tax burden is 35% unless the Chinese are willing to renegotiate their Tax Treaty (Tax Treaty is required before granting or extending a Most Favored Nation Trade status).  

If China renegotiates and are willing pay to the US say 10% (or whatever settled amount) of that 15% to the US, while the MNC pays the other 10% or remainder from their gross income, then that will make the MNC’s total tax burden then only 25% and the 20% tax requirement paid to the US Treasury fulfilled. Still 10% lower than what they are required to pay today at 35% but don’t due to current tax loop-holes. Which ever way, a 20% corporate tax is what is required and is what will be paid to the US Treasury.

“In many places around the globe already, taxes are paid “before” the final global “passport-transaction” (who gets what, when & how) takes place to the banks. This makes it real simple. This can and should be paid either in cash or accrual method to reduce loopholes and accounting errors.” (Robert Halcombe, CEO the Sovereign Group)

Note: Aside from executive remuneration and managerial payment allocation doing a complete 180 degree shift in the last twenty years from; i.e. employee, company stockholder to stockholder, company, employee while passing on high-risk portfolio’s to the American tax-payer, know this…The payment of taxes from the corporate world is probably the single most important factor that would restore financial responsibility, integrity and obligation of governmental operations under this current economic crisis and its recovery while reducing the tax burden at the same time. From the latest survey by the Pew Research Center, about two-thirds of Americans now believe there are “strong conflicts” between rich and poor in the United States. One may want to consider; who is in whose pocket.

Thank you and Congratulations…You have just saved America and the Western World.

End of Report

Bibliography Index

[1] The Laffer curve: Past, Present, and Future. http://www.heritage.org/Research/Reports/2004/06/The-Laffer-Curve-Past-Present-and-Future  http://online.wsj.com/article/SB10001424052748704116404576262761032853554.html?mod=WSJ_Opinion_LEADTop

[2] Internal Revenue Code

[3] Mark Steyn, America Alone

[4] Or the poverty level of income?

[5] Generally Acceptable Accounting Principles per the AICPA

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