America needs to change into a new society to ensure our future lifestyle. This evolution must center on: Disclosure Taxation Justice
NO DISCLOSURE – NO DEMOCRACY
Despite the greatest communication network in history, there has been a concerted effort to reduce disclosure of what should be public information. This is an ongoing trend against truth and accuracy. Those in power have little in the way of mandates to disclose and virtually no incentive to do so. In fact, either frustration or retaliation awaits those who try to be honest and disclose information.
In particular, we are missing the very important process of risk disclosure. This is fundamental to the successful operation of our society. Virtually all financial transactions require some form of risk disclosure. Yet, the most powerful and influential are exempt. Every piece of legislation is missing risk disclosure. This leads to a false sense that there is little cost and no possible loss. Politicians and government employees should be under a fiduciary duty to the citizens, at least for transparency and disclosure.
All banks must adhere to risk disclosure in many ways. However, the most powerful bank, the Federal Reserve, managed by unelected bureaucrats, can implement their own dangerous policies and procedures without any duty to disclose the risks of such operations. In similar fashion, the U.S. Treasury does little to warn the public of the possible economic consequences of their practices.
James Clapper, former Director of National Intelligence, reflects on his Congressional testimony, “I responded in the least untruthful manner”. This attitude permeates the government and business. What is missing? How easy it is for government officials to hide information. This process has destroyed the flow of valuable information through our society. The consequences are poor leadership, undeveloped or misallocated resources and an unproductive economy. Worse, it creates injustice, restricts our freedom and divides our society.
Truth matters! We must have laws and regulations mandating transparency and disclosure and impactful punishment for those withholding important information from the public or spreading fraud and misinformation. No Disclosure – No Democracy.
In a world of mass communication and global economic interdependence, if we do not move towards a more informed and responsible citizenry, we will descend into an ignorant and immature society. That will be the destruction of America.
TAXATION
We are back to the beginning. Taxation without representation. The convoluted mess of our tax code is the direct result of the manipulation for the benefit of the wealthy and powerful. It is destroying our country and has created the largest wealth gap ever.
However, for the first time in history, we now have the logistics and technologies to put taxation and spending in the hands of the people where it belongs. We need to eliminate the politicians and lobbyists who now control it. The time has come to change the process.
In any national or local election, we can now put the budgets on the ballot. Using the general standard account categories, voters can begin by simply choosing whether to increase, decrease or keep the same level of spending for each account category. Let the citizens control spending. This can start as a trial for a few years, eventually directing all spending. Politicians can become true leaders by communicating and educating citizens and recommending tax spending allocations. Citizens will directly receive the benefits and be responsible for the costs. There will be no one else to blame.
On the revenue side, the primary source of taxation should be business income, not personal income. Capitalist free markets provide the opportunity to acquire significant wealth from business. A tax on business income is a small price to pay for that privilege. It should be a simple small tax on gross income, not net, no deductions. Let the market and management work out overhead and margins. People cannot deduct their rent, utilities and food that they need to survive. Why should business be able to deduct anything from tax when they have the opportunity to make money? Then they will not have to be tax collectors on worker wages or pay benefits unless they want to include it in their overhead. There will be insurance companies to offer health coverage to anyone. Let people determine their own retirement needs. Through voting, citizens will decide what social benefits the country should offer.
The only legitimate adjustment should be for employee ownership. Whatever percentage of equal voting capital stock is owned by employees can be deducted from the business income tax. For example, if 40% of voting stock of the company is owned by employees, 40% of the business income tax on gross income can be deducted. This will reward social minded management. This will benefit family and small businesses and start ups, all of which are most valuable to the country. It will expand entrepreneurship. It will keep small businesses competitive with large corporations. They will also have more flexibility in bad economic times. Foreign companies in the U.S. without our citizens sharing ownership could be taxed at a higher rate.
Depending on how citizens vote on spending, if additional tax is needed, it could come in the form of a national or local sales tax. A small tax could be applied on end user transactions for products and services. Food and medical could be exempt. This would also function as a green tax as consumers of resources would ultimately pay more than conservers of resources. Spenders will pay more than savers. This will better allocate capital in the economy. The dollar is like a mini ballot. Its movement in transactions is like voting for or against many kinds of things.
As a regular supplement to raise revenue, there should be an estate tax. Inequality should be at the end of the race, not at the beginning with different starting lines. A huge transfer of family wealth to the next generation is the last vestige of royalty and robber baron. A large accumulation of wealth is only possible by the civic behavior of the majority of a society. Therefore, an estate tax is simply a return on the investment to that society for providing the civil society and structure that made that wealth possible. All children are the responsibility of everyone. Consider America as a member of the family, like another child in the family. Perhaps the IRS could track the sizes of estates on a rolling monthly basis. The estate tax could be applied to the top 20% of estates of decedents in that month. The top 10% of the estates could pay a tax equal to the share of the largest beneficiary, person or entity. The next 10% could pay a tax equal to 1/2 of the share of the largest beneficiary, person or entity. Large families and estates with many sized beneficiaries would pay less total tax. The existence of a spouse or legal partner of the decedent would exempt that estate from tax. No dynasty trusts. No continuing trusts for anyone older than 21, exceptions for court adjudicated disability or incompetence issues.
If citizens keep voting for more spending, then there could be a tax on personal income, preferably a simple flat tax. That percentage could increase depending on the level of continued spending.
JUSTICE
First, politicians have avoided doing their job to openly debate and develop solutions to our many problems. They have dumped their work onto the courts. This has impaired the democratic process.
Second, our society has allowed white collar crime to flourish. It is insidious as it destroys trust in people and institutions. Despite it being easy to prevent and prosecute, effective legal remedies are missing. This needs to change quickly or it eventually causes street crime.
Third, to unclog the system, and promote social knowledge, there should be no out of court settlements without public disclosure. If parties begin the process of using our public courts, the public has the right to know the terms of resolution and the problems in corporate America. A judge could make exceptions for certain personal matters, but not for corporate matters. With that in place, many disputes would be settled before placing the burden on our courts.
Fourth, the prison system obviously needs reform.
We need to establish a better system of justice. The current system has become very expensive for both criminal and civil law. It has become a business methodology used by the rich and powerful for political and economic advantage, not for justice. Law has become big business, it has to change. Without money or power, it is unlikely you will find justice. Criminality is determined by money. Also, there needs to be some type of extended people’s civil court system in our communities. The present structure does not seem adequate. We may need another level. It could be a low cost process to initially document an issue and begin to establish facts and dialogue without the necessity of lawyers. Perhaps problems can be resolved there or if needed, go to a higher level with much of the work already done. It could have judicial determinations at that level and a practical appeal process.
Justice is the only way a society can progress.