America should adopt UET

OPINION:

Our entire structure of taxation is inequitable. A good example is how we take narrow segments of our economy - for instance, earned income - and tax it from 10 percent to 40 percent. The same goes for dividends and everything we earn and want to keep. All of the tax system is subject to a divisive political process, as December’s debacle in Congress has revealed.

Americans have always been independent-minded and have distrusted governments that want to tax them unfairly. What is needed is a simple, fair tax that is unobtrusive, painless and at the same time presents the federal government with enough funds to pay its bills.

Enter the Universal Exchange Tax (UET). This system of taxation would eliminate our national debt in three or four years as it is being fine-tuned. Thereafter, it would totally eliminate the Internal Revenue Service and give the federal budget more money than it ever dreamed of.

The UET is like a sales tax, but it charges every documented purchase one-tenth of 1 percent. Buy a $100 worth of groceries, pay 10 cents in UET. Buy a $1,000 big-screen TV, the UET is $1; a $25,000 car, $25; a $500,000 house, $500, and so on. This is hardly money worth crying over.

How can such minuscule amounts of money generate the federal monies we need annually? Well, the UET is not just for individuals. It include banks, financial clearinghouses, title companies, credit-card companies, brokerage houses and others, all charged with processing and documenting transactions of value. For instance, there are literally billions of shares and commodity contracts traded on U.S. exchanges every day, and each of these exchanges of value would be taxed at one-tenth of 1 percent. We’re literally talking pennies here.

Here’s the good part: there are three to five quadrillion exchanges in the U.S. every year, and each quadrillion is equal to $1 trillion in revenue, or $3 trillion to $5 trillion each year. Our federal budget this year is $3.5 trillion. Even in a bad year like 2009, we’d have $3 trillion after the UET. That amount could have easily eliminated $500 billion in budget fat.

Best of all, politicians are kept out of the equation. There will be no income taxes, no corporate taxes, no dividend taxes, no IRS and no federal taxes deducted from a person’s paycheck.

DON HAYES

Tampa, Fla.