THE POWERS OF NINE TAX ALGORITHM
What motivated me to come up with this:
In the wake of losing the rented space underneath my 13-year-old custom wood window and door company in 1992, owing to calamitous financial circumstances that had befallen my landlord, I experienced considerable difficulties in the period that ensued. These troubles acted as the catalyst to developing an unusually keen interest in what might be happening to other people in the middle class across the nation who, like me, had had a bad turn of luck. Take my word for it, losing all you've worked long and hard to establish to the priorities of someone else in a financially superior position is a traumatic and demoralizing experience. Suddenly, you're saddled with a pile of operating debt that you now have no means of paying off. All you can do is watch years of hard work go down the drain. Friendships evaporate. You feel forsaken, powerless and irrelevant, and you grow bitter. Having to recover from that dark state has a way of sharpening not just one's business savvy, but one's sociological and political awareness, as well. You're reminded, in a searing way, that really bad things can happen to the most diligent and well-intentioned of people and that, when they do, other people around tend to respond negatively, if they respond at all. It's as if you'd caught some kind of communicable, bad ju ju disease that everyone is deathly afraid of. I learned, rather painfully, that many people see the afflicted of the world as being somehow to blame for their own troubles, and thus, worthy of scorn.
I've since stabilized my financial affairs, and spent the past two decades with a wonderful life partner who, thank God, saw through my plight to the intrinsic qualities she approved of underneath. But the memories and feelings remain, as stark as ever. I vowed never to run a business again until I first owned the ground it stood on and, thus far, being able to own such ground in Seattle has been well beyond my means. Also, at 63, it's a little late in the game to reboot that old entrepreneurial itch again and go back to heading up a custom wood window business. The fire in the belly - based on the youthful tendency to dwell inordinately on prospect and not enough on risk - just isn't there anymore. So what to do? Well, if nothing else, I still had a 'voice', and if I used it, just maybe, I could help to make things better for others in some systemic way.
So how, more exactly, did the above inform my thinking on the economic issues we face today? Perhaps most importantly, the experience of being a long-term entrepreneur, made down-and-out in the wake of much bigger money activity, opened my eyes to the fallacy that determination and a good education are all you need to be financially secure in America. Many additional factors, some random, and others over which one has no control, play into the equation of life. It gave me an inside look at what it's like to be overtaken by events and end up psychologically broken and poor. I became the subject that I subsequently ended up studying and though there are no degrees handed out for that kind of education, if there were, I'd surely have a master's degree in penury. After all, what form of real expertise is there other than an obsession acquired through immersion? Only then can one really understand how subtle and overt forces conspire to create observable phenomena. In my case, the observed poor and the destitute were all around me, as they are today. Thanks to my own period of troubles, I understand much better how so many of them come to be that way, first outwardly and then within, and because of it, I empathize deeply with the 50% of Americans now living below the level of what is generally understood to be middle class in an era when the economic prospects for the majority of the workforce are slowly being squeezed from all sides.
When I say "middle class," I don't mean anything fancy; just something along these lines: being in a position to be able to raise a family in a home of your own in a manner that doesn't stunt anyone's potential or skimp on anyone's health or nutritional needs, while giving loved ones the affection, time and attention that society expects you to give AND, say once a year, being able to take a vacation with them for some quality family time together - or some other-lifestyle recreational alternative to that scenario. In addition, you do all this without working yourself half to death at your job and without needing direct financial help from government to be able to make it happen. Is that such an unreasonable hope for a conscientious young adult to have in what is still the world's largest 21st century economy?
Sadly, for all too many young adults, one of the harsher realities of American life today is that the very idea of even having children - along with raising them properly - has become equated not with the almost obligatory rite of passage of their parents' day, but with something financially unrealizable. Imagine that; children are now a luxury of sorts! That's a dicey premise on which to base the social continuance of America, to say the least.
Bad as that reality may be, it is simply one small line-item embodied in the umbrella issue of the decade - the generally fragile demand side of the economy, the even worse state of the public organs charged with backstopping that economy, and the consequent implications for Americans in the near to medium future. On that general issue there is little I can add that hasn't already been hashed over extensively in the mainstream media. It seems like some kind of fundamental change of state is in order but, despite the fact that there are ideas floating around, precious little seems to be happening to actually produce change of that nature.
Still, we can't simply give up, can we? We aren't living in the age of the pharaohs, where little changed for thousands of years; today, other nations are doing all they can to better compete with us. Change is ubiquitous and unrelenting; its external expressions surround us, nipping at our heels and driving us onward into the unknown ground ahead. The ability to manifest a comparable rate of change within ourselves is thus an essential component to surviving in the world. With respect to national governance, when real change starts to roll, it will have been prompted by ideas that have long been knocked about, survived scrutiny and gained traction. In anticipation of that time, I have a number of ideas that I've been refining over the past decade that I believe could prove useful in the making of positive change. The idea I'd like to float in this segment involves an issue of critical fiscal import - improving the state of public revenue collection.
The link between income taxes and what kind of governance we get:
First, because it's generally the first question that a reader might want answered, I need to clarify where I'm coming from, politically. Though I'm no subscriber to the notion that it's the state's business to engineer an absolute equality of outcomes between citizens, I do believe that it is the state's responsibility to ensure that the undesirable edges of the playing field of life do not end in a precipice of grievous personal misfortune but, rather, turn upward to create a bowl of limits that protect those who fall on hard times from unconscionably harsh conditions (and the rest of us from what life's losers may do as a direct, or indirect, consequence of such difficulties). As it now stands, we, in the USA, are regularly stigmatized around the world for an apparent inability to empathize with those who fall by the wayside in the journey of Life.
One might imagine society to be like a big bowl floating on shark-infested waters, with the private sector being the bottom surface and the public sector being the edges. Everyone is competing to get to the most coveted spots in the middle. Weaker contenders are displaced toward the edges. In a highly privatized society, the bowl is very flat and very stable, but you can be pushed over the edge into the jaws of personal disaster pretty easily. In a highly communitarian society, the sides of the bowl are higher and the bowl is not so stable, but the chances of your going over the side are almost nil. The trick to a society maximizing its chances of collective felicity lies in finding ways to be the right-shaped bowl; that is, in creating a system that manages the balance between private and public sectors optimally.
Under that metaphor, when social sustainability is undermined, it's not the rich who are at odds with the middle class and the poor any more than it is the center of a bowl that is at odds with the edge, but rather, a fault in the design (or system) under which they all attempt to operate, as one.
This metaphor intrigued me so much that I even worked out what the ratio between the diameter and the height of the sides needed to be for a bowl of any given total surface area to be most stable, using the typical baking pan with its vertical sides as my model shape. As it turned out, for any given surface area, the most stable form is that which displaces (or holds) the greatest volume. That occurs when the ratio of diameter to side height is 4:1. Interestingly, that is also the point when the surface area of the bottom equals the surface area of the sides. It's tempting to explore what society might look like if half of its financial distribution circulated through structures set up to bring in capitalist sector income and the other half circulated through the many forms of expense people engage in to promote general well-being and the quality of life, severally and collectively - namely, the public sector. That model may well represent something close to what an American might call socialist. On the other hand, a Cuban might see it as capitalist. It would probably approximate the workings of, say, Denmark, Iceland Finland, Sweden, the Netherlands or Norway - all of which, by the way, rank higher than the USA in Wikipedia's Satisfaction with Life index. That's something to think about, isn't it?
But, I digress. Returning to where I stand politically....
Having been self-employed for most of my working life, I’m a strong believer in conventional principles behind capital-driven business development, especially with respect to the need for adequate cash in allowing new businesses to gather financial momentum and fiscal stability. Accordingly, I've opted to have what little I've managed to set aside for my 70's and beyond spread around the capital markets, in the hope that my holdings will outpace inflation. I understand full well the value of such markets, not just to the growth and sustaining of free enterprise, but also, to the passive investment strategies of millions across the nation who, like me, are trying to make small savings suffice for later years when securing gainful employment might not be possible. In that sense, I’m a practicing capitalist.
At the same time, I’m acutely aware of the many assets and amenities that my fellow citizens and I take advantage of every day whose existence depends upon public funding and public management. These assets and amenities allow all of us to interact in an orderly fashion, while pursuing opportunity under a dependable system of law, to the greater benefit of society as a whole. In that sense, I’m a firm supporter for the responsible management of functions of society that are best socialized, as well.
Some say you can't be both a capitalist and a socialist at the same time. What I say is, what other rational choice is there?
Contrary to what many Americans believe, the two schools of thought - capitalism and socialism - are not necessarily competing ideas at all but, rather, interlinked parts of the same social bowl floating on dangerous waters. Each idea has its appropriate territory and each needs the other for the whole to be able to function optimally. Without the one, the other would simply sink. The only area in which they conflict is where neither has a clear claim on logical eminence, in that narrow no-man's-land where one may be becoming the other, and the question of whose priorities should prevail is not exactly clear cut; where the bowl curves upward, in other words.
It always irks me, then, when well-respected politicians and their followers who, we suppose, must be good thinkers, trot out the old "socialism" pariah card whenever they’re challenged as to how to keep our public sector in optimal shape and solvent. Whether we're going through good economic times or bad doesn't seem to matter to them. They're ideologically locked into the same old catch-all prescription: cuts in public services with no supplementary reinforcement of the revenue stream. The rationale is that, in good times, the private sector can be relied on to provide jobs and services aplenty, whereas, in bad times, an insufficiency of tax revenues mandates we cut government expenditure, period. Maddeningly, during bad times, even after all the cuts in service that can reasonably be made have been made, and a budget shortfall still remains, they persist in calling for yet more cuts while assiduously opposing the institution of any form of supplementary or emergency taxation. Though public treasuries may be sliding cripplingly into the red, the very idea of raising revenues by changing tax structure they regard as political heresy.
It's a kind of 'Heads, you lose/Tails, I win' political rationale. Regardless of the circumstances, it is simply NEVER the right time to discuss opening a new tax revenue stream.
On a realistic level however, at some point, what other recourse is there than to raise taxes, for Heaven's sake? Public default? The dismantling of the public sector, along with all the resulting costs and discomforts associated with social decay? What then would become of private sector employees whose jobs depend on public sector contracts and how, pray tell, does the government improve its bottom line by having to sustain those laid off in jobless benefits while they scramble to find new sources of comparable income in a system currently replacing American jobs with cheaper alternatives, either mechanized or offshore?
I have to ask these reflexively anti-socialist die-hards, what would you rather have, the devotion of some part of your income, not essential to the meeting of basic needs, applied toward the security and benefit of the whole collective, or the ambient perils and uncertainties of a society being incrementally dismantled all around you, where the simple act of going back and forth between home and any other place requires you to be acutely and unrelentingly vigilant for the sake of your safety, and the burdens of old age or ill health become yours alone to make full provision for? Is the latter option really what you'd prefer? If so, my friends, there are still countries in the world where the kind of costly public amenities and services that we enjoy in America are not funded, because paying taxes is not part of the prevailing social contract. As a consequence, there's no money for such public assets to exist. A short vacation in one of those places might help to refine any notion that Americans need not be overly concerned about decay in their various public sector agencies.
Note, when I speak of public services and public assets, I'm not talking about anything lavish here; just the basics that a comfortable majority of the public would regard as civilized and worth the money, in terms of benefit delivered.
Simple logic tells us: while it may be better for many smaller challenges to be left as options for the private or non-profit sectors to involve themselves with, others are better addressed in a collective way by government. There is a list of reasons for that to be the case: they may be too big for the private sector to handle, too critical to risk their not being done or not directly profitable enough to warrant the investment it would take for any entity in the private sector to become involved. Further, private sector entities can fail and, if the services they provide are vital, the government may well be obliged to keep such entities financially afloat in the event they go under. And there's one more big problem with trying to replace what government does with private sector equivalents: doing so generally means having to charge the public for access, and charging for access means burdening the poor disproportionately, or even excluding them altogether - a thing totally regressive in nature. In any one of those cases, the better option is to get the public sector to do the job, and to be able to fund that, we have no choice but to collect the necessary monies from as many people as we can in the least socially damaging way possible.
The best point in general circulation to collect taxes:
There are two schools of thought about what point in the circulation of money happens to be the right point for taxes to be gathered from individuals. The earlier point is at the point of pay, in the form of payroll and income taxes. The later point is when individuals spend money on what they buy for themselves, in the form of excise and use taxes. Over time, I came to recognize that individual consumer habits could not be determined by income: plenty of lesser earners spend obsessively (often on palliative dissipations that provide only transitory amusement), while many of the richest have spartan lifestyles, preferring to apply their money to the making of yet more money. The pertinence and dependability of excise taxes to the cause of government revenues and social equity was, therefore, quite limited, especially during economic downturns. Point-of-pay taxes, on the other hand, provided an opportunity to gather the bulk of revenues in a fairer and more stable way, minimizing the impact of what people decided what to do with after-tax income on the public sector.
The practical challenge in the idea of point-of-pay taxes, of course, lies in the fact that the contributor base extends all the way from the bottom of a rapidly growing wealth dichotomy to the earners of hugely disparate incomes. In the making of a viable tax system, that vast sweep introduces factors that are logistical, mathematical and political in nature.
Another potentially significant complication attached to the issue of implementing a truly fair overall tax system, at the state level, arises out of the fact that, after the IRS has taken its bite out of people's income, states are obliged to place their own demands upon the citizenry to collect the balance of what they need to operate. Different states have evolved different methods to gather whatever extra quotient might be needed beyond what they get from the appropriations process in the nation's house and senate, and people have adapted accordingly. Flawed or not, individual state tax systems have their supporters - normally those who feel they're on the winning side of the deal. Depending on the number of those profiting from any given system, compared to the number losing, a supplementary state tax on income may be easier or harder to implement. One truth that can't be denied, however, is that states that have accustomed themselves to collecting only excise taxes on consumption, with no supplemental tax on income - especially upper tier income - tend to have wider wealth dichotomies and thus, more intellectual and political firepower arrayed against change. Hardly surprising.
Do I think that states that depend solely on excise taxes should abandon them altogether, in favor of supplementary income taxes? Absolutely not. Excise taxes help a state keep up with public expectations when state economies are strong. Neither approach should be abandoned for the other. Rather, they should be calibrated to reinforce one another in whatever way is appropriate to the prevailing state of the economy, in the interests of preserving a general condition of amity, security and stability.
Why forgiving taxes creates so few jobs:
Before I move on, I must mention one more another hurdle, this one ideological - the old bromide that taxing upper end income will undermine job growth.
The argument that the rich will make it up to us by creating jobs for us if we just don't tax them may be a heart-warming notion to some, particularly if you happen to be one of the rich. The only trouble is, we've given them 30 years to do it, since social indicators on wealth distribution began to show that the wealth gap was no longer shrinking, but widening, and it hasn't borne the fruit we wanted: if it were, right now, we'd be swimming in jobs of every kind. Well, the rich have never been richer, and, as far as I can see, we're not swimming in good, middle class jobs. I don't know who, or what, first originated the fantasy that the rich would sooner use their growing financial clout to make more jobs than use it to squeeze those below them for whatever extra measure of profit they could get out of them, but whoever they were, they sure led the body politic down the garden path. Human nature isn't that noble. Once successful, most sensible people like to cut their risks and relax into a dependable pattern of well deployed financial advantage while enjoying that precious thing called life opportunity to the max. What sane person, with an inexhaustible supply of play money on the best piece of real estate in the Milky Way is going to dive back into a risk-ridden, time-starved life of entrepreneurial angst with all of its attendant hassles and uncertainties? Remember, I said sane. By definition, entrepreneurs are trying to become the rich, not the other way 'round. OK, so a few, a very few, go in that direction (why on Earth, I can't imagine), but nothing like the number needed to validate that misguided notion that the rich are lining up to create jobs. They have less worrisome ways to make money, believe me.
Landsakes, I should know; I did fifteen plus years in the entrepreneurial trenches, and the reason I did was because I trying to GET the money, not because I HAD it. Take it from one who knows what it's like to be at the helm of a very closely held business. It was my all-consuming life, spread over the bleakest decade of my life, part drudge, part waking nightmare, and it never let up. It cost me my marriage and all the money I had saved. Every other good thing about life took a back seat - family, friends, fun, romance, art, music, avocations, recreation, spiritual nourishment, or appreciation for anything outside of trying to make the business I started work the way I first dreamed it would. Ultimately, when you're fighting for your financial life, all that keeps you going is this deep yearning for the day the pain pays off and you can finally get out of it free of debt. That's reality for the majority of start-ups - even the ones that begin with lots of seed money to play with. The rich, to their credit, know this better than government seems to. Thankfully, though it's taken some thirty years, or so, the media now seems to have come up to speed on that ruse to avoid paying taxes, but hey, better late than never. How long it will take government to realize that it's been suckered into allowing the public's rightful due to be siphoned away with this form of tax forgiveness, I don't know.
As acutely as my own entrepreneurial experience may lead me to feel about that time, dwelling on it too much isn't helpful. That's the past. The future collective interest is what I'd like to give my attention to now.
At the very heart of fair taxation is the question of comparable impact, individual to individual, regardless of income, and at the heart of that, the question of what math we might use at the state level to gather revenues, while compromising, as little as possible, other financial concerns that the state residents have to cover in their daily lives. Being precise in this is important, not just for the sake of fairness itself, but also for the sake of ensuring that the drag on the wheels of general commerce, occasioned by taxes, is as light as possible. Some in the public eye occasionally advocate for various kinds of flat tax, though the disproportionate impact of a flat tax on the lower end of the income spectrum is plain to see. I disagree with that approach, not just because it's overly simplistic and patronizing of the public's ability to understand the need for precision, but also because it's such an obvious giveaway to the rich at the expense of the poor and, thus, so obviously regressive. We're smart enough and well equipped enough with creativity and computers to do better than that. It isn't all that difficult to see the underlying bias toward interests of the rich, trying hard to remain unnoticed behind such flat tax proposals and, a step behind that, the insidious social linkage between so-called important people and legislators that continues to subvert the legislative process whenever the words "tax" and "reform" are put together.
Now, as public revenues tank and legislators and public executives make ever deeper cuts in a desperate effort to squeeze programs into shrunken government budgets, ideas about the inescapable necessity for progressive taxation on income are finally beginning to gain traction, with more than a few really rich folks themselves among the staunchest advocates. The worm, it seems, has turned and, now that it has, let's not allow it to reverse course.
And why indeed, would those few rich be so willing to get us to tax them more? Well, if you ask them, the one goal they seem to have in common is what kind of country they'd like their grandchildren to live in; namely, a better one than present trends appear to be setting up for them and, with luck, maybe even one as good as the one they themselves grew up in.
But as long as legislators keep exempting the rich from paying the taxes under new laws that only they can come up with, to keep government from dipping into the red, that better society is never going to happen. And, as long as that doesn't happen, the giant consumer base of the middle class won't get the public stimulus and services it needs to rebuild itself and the downward spiral of doom that keeps feeding on itself, will continue, forcing the national government to continue engaging in risky levels of injection of "new" liquidity into the system.
How the proposed Powers of Nine algorithm works:
That brings me to the nut of my letter - a proposal to use a novel mathematical approach to calculate what overall individual income tax rates - federal plus state - should be. It's an approach that I believe has the potential to slow that downward spiral. Note, I said "slow", not "reverse". To actually reverse that spiral, a panoply of contemporaneous reforms will be needed, I know. Nevertheless, this is one idea that should be in the mix. For the sake of mental branding, let's call it the Ideal Split Point, or ISP, approach.
What is the Ideal Split Point? It's the point where any given income can be conscionably divided into two piles, if you will. One pile, the earner - that's you - gets to decide how best to use; the other pile, you contribute to a public fund to be managed, under trust, so that needed works that are beyond your power to plan, fund, organize and complete alone, can actually get done, to the collective benefit and satisfaction of a democratic majority of your fellow state citizens. In the making of said split, the factor you share in common with all your fellow contributors is a sacrifice of personal indulgence potential calibrated to have a roughly equal personal (distinct from simply financial) impact on every payer. You do this under the general understanding that the money you contribute to the common kitty will go toward purposes of greater import to the general good than any personal purposes you could have put it to. Described metaphorically, if the totality of your income were a body, what you paid in taxes would be a certain fraction of the surplus fat on that body. The fatter the body, the greater would be the ratio of surplus fat to total weight and the greater forfeited amount to total weight. God knows, unless you're expecting a famine, the last thing most would want is surplus fat. This analogy closely approximates the basic principles behind progressive taxation.
The flip counterpoint to the above analogy, no doubt, is that there is no such thing as having too much money. Not so, I'm afraid. Academic research has shown that beyond an annual income of about 140% of the national median income - a little over $70,000/annum - personal happiness stalls and begins to decline as the unwelcome downsides that come with excess (and often noticeable) wealth place greater demands on the holder's personal time, privacy, and the ability to retain friendships and family connections free of ulterior financial overtones. If it were generally known that most of such higher-end income were going toward purposes of a collective nature, it is conceivable that levels of enmity between different earning classes would be far lower, thereby affording richer people the potential for greater contentment, security and freedom of movement, not less.
In cases where the federal rate fell short of the ISP, states could decide what fraction of the shortfall they felt it appropriate to collect to bring their coffers up to healthy levels. Since the algorithmic process used to calculate such rates would apply in a progressive way across the full spectrum of incomes, no one could argue that they were in an income group selectively targeted to help close the budget gap.
The engine of the approach I propose involves a short algorithm applied to the taxable portion of each person's income. It draws a smooth graph of overall rates that are moderately progressive.
This is the formula: R = (T÷(T+10,000)) x (log T÷log 9)1.93 , where R is the tax rate sought and T is the taxable portion of income, after deduction of a subsistence quotient that is the sum of $18,600/annum, plus 1% of total income.
An important feature of the graph generated by this formula is that its curvature can be regulated to fit the needs of the time by tweaking the control values within the algorithm. The graph very deftly tracks the percentage point at which any given income can be split into what goes to collective purposes and what is retained for private purposes, where the pain inflicted by losing the contributed amount infringes about equally upon the personal convenience of each payer's and his/her ability to enjoy the fruits of civic life, whether that person happens to be one of the super rich or just getting by (the unique subjectivity of personal circumstances aside).
Money for the very basics of life would not be taxed. While there is a good deal of flexibility in understanding what exactly covers the basics of life, in terms of income, it would not include money one might like to have for speculation, business investment, financial gamesmanship or personal indulgences that one could take a pass on without demonstrable inconvenience.
It stands to reason that such a graph would exhibit some kind of smoothly changing gradient, as opposed to the wobbly graph generated by the official formula. As you can see from the accompanying graph, this proposal does. In this depiction, I called it the WISER graph. I called it that because I was a resident of Washington state and what it derives is the supplementary income tax that I think Washington could legitimately collect to help close its disastrous budget gap - a gap with such poor remediation prospects that the credit rating of its bonds are in current danger of being downgraded by the major ratings agencies (2012). The acronym, WISER, stands for Washington Income and Security Enhancement Residual. It may be a bit precious but it does not affect the utility of the math. As Shakespeare said, "A rose, by any other name, would smell as sweet."
The reader might note that the smooth regularity of the WISER graph is not reflected in the existing federal income tax graph that appears beside it (see accompanying attachment for a visual comparison). In fact, the WISER graph shows how regressive the federal tax schedule is for amounts below where the two graphs cross, at $37,350.
It is important to note that while this formula would apply equally to every earner, it is in no way comparable to any kind of flat tax formula (a flat tax rate being represented by a flat horizontal graph). The math is way different, as are the results.
The challenge I faced in coming up with the math needed to produce such a graph lay in finding just the right control values to derive results that compared favorably with schedules currently in effect, not just in the middle portion of the income spectrum in the United States, but in other tax districts around the world considered both progressive and fiscally sound by academics.
It took me a few years of playing with various options and another couple of years' worth of testing the approach I ultimately settled on, but I'm satisfied now that the formula above offers a simple, but effective, mathematical tool for how overall contribution through taxation by the individual (federal and state, combined) should look, at any given income level.
What sets this approach apart:
I'm not one who likes to boast. So even though it makes me uncomfortable, I'll go as far as to say that I believe the core of this idea - the Ideal Split Point - to be a superior approach to taxation than anything currently in use in the United States. It may even be groundbreaking from a theoretic point of view, though I wouldn't know, since I'm not an academic. Some may fault me for making such a lofty claim but ours is not an age where modesty or understatement gets anyone's attention. When Muhammed Ali declared himself "The Greatest" and subsequently backed it up with outcomes he had predicted, he set a standard of boldness that people have come to expect before they'll consider anything worth turning their attention to. It's a loud, loud world we live in, the equivalent of a Neopolitan market where one either touts one's wares or goes home poor.
A short list of advantages:
The Powers of Nine approach is:
*Up to date ----- It's a modern approach, made to work with modern cloud computing that most people in America have basic access to; not necessarily a replacement of the current table format used by the IRS (unless Congress chooses to deem it so), but a modern adjunct to it and a technological and sociological step ahead of the existing system.
*Fair ----- The message behind a smooth graph is one of scientifically controlled rigor in a genuine attempt to both ensure fairness and discourage the kind of questionable deduction claiming that bracketing invites. It describes a credible split between how much of any particular income is better managed personally and how much should go toward the maintenance of assets held in common with the rest of society.
*Appealing ----- It has the potential to be formatted in a visually appealing way on any kind of screen-based IT device - a way that is effortlessly interactive, compatible with the modalities that modern businesses use to communicate with existing and potential customers. People like the IT visual appeal factor; it invites participation and participation is what a tax system needs most to be able to work optimally.
*Inclusive ----- Based, as it is, on a single math principle that applies to everybody, the formula is a potent symbol of social inclusiveness and technical impartiality.
*Adjustable ----- Since the basic design of the formula includes numeric ‘buttons’ to control the entry position, the pitch and the rates of change of the graph, the graph can be adjusted to be responsive to background revenue needs, either automatically, or by elective control, as the nature of the times imposes upon the treasury of the collective, greatly mitigating potentially damaging lag times between unforeseen expenses and ensuing collection actions.
*Proactive ----- At the very high end of the graph, as rates approach 99%, and net return on gross income (after payment of tax) quickly drops off, a disincentive against excessive diversion of liquidity out of company funds into the hands of a single person, in the form of extreme executive pay, is created. Very few would ever reach that level, but there is an instructive principle behind the possibility.
*Uplifting ----- Because the press of the world follows everything pioneered in America, the adoption of this taxing approach would have the potential to help redeem America’s tarnished reputation with respect to having the will to preserve social equity among its citizens.
No easy sell:
Given the positives listed above, one might be led into believing that this proposed approach has generated interest among people looking for ways to put our many fiscal houses back in order after the Great Equity Collapse of 2008. In truth, I must confess to having had very limited success in getting anyone to take a serious look at the idea.
Now this may seem odd, but I don't find that totally discouraging, although it certainly is frustrating. Outmoded, facile ideas that have clearly outlived their usefulness always seem to be the preferred choice among the majority who prefer the well-trod path to anything new. That's human nature. People tend to mess with broken things a lot, trying to make them work, before they bite the bullet and opt for a whole new start.
Now I'm not going to pretend that I think that this algorithm is going to solve all our fiscal problems. It only deals with a limited area in a much bigger picture. But of one thing I am certain: what has failed us in the past will continue to fail us in the future, and the longer we hide from this fact, the worse our collective plight will be. When it sees itself heading for disaster, the sensible collective makes a sensible course change, the howls of holdouts notwithstanding. Less astute groups go down with choices they're too much attached to. Like any other living organism, each of these 50 states, along with the national collective they comprise, will have to adapt or risk being overwhelmed by an unmanageable panoply of adverse consequences, quite possibly even more damaging to the long-term good than the Great Depression of the 1930's.
Our main challenge to evolving is getting over the comfortable self-deception we tend to cling to to avoid being inconvenienced, that, somehow, things always work themselves out for the better - the product, perhaps, of relative ease, wealth and intellectual complacency in the wake of the Allied victory in World War II - years in which our competitive edge started out pre-eminent, but then, gradually waned and became dull.
The potential costs of not acting:
The "Occupy Wall Street" protests, beginning 2011, may only have dented that comfortable assumption, but the cat is out of the bag now. The notion that Americans don't care about social inequity - the just-business-as-usual peonization of the lower classes, in pursuit of higher corporate profits - has been called into question, if not definitively demonized. Where once there was indifference, now there is doubt, dismay and even fear. Public disgust at the situation is growing. Whether the establishment succeeds in using local constabularies to chase protesters off the streets and squares of America won't matter in the end. The news is out: people at the top end of the income pyramid (not just the top 1%) have been using the structures of an unchallenged establishment to duck the tax-related pain that the rest of the nation has been bearing a disproportionate share of. Whether they've done so actively or passively hardly matters. The pain at the bottom is real and it's been growing. Scales have fallen from the eyes of the multitude. In the same way an abused wife might begin to recognize her husband of many years for the monster he is, the working classes now see a significant subset of the corporate class for the institutionally-protected, cream-skimmers they have long been, and even as scales have fallen, so heads will follow, too. Impending social change of some kind is in the air. If we do not act quickly and very substantively to reverse the tide of inequity, the very appearance of it, it may well prove to manifest as social decay. Under that condition, it will be impossible to avoid the rise of serious class (as well as racial) enmity in America.
Innovating public revenue collection in a way that demonstrates a clear resolve to correct shortcomings, in what professes to want to be an equitable social conclave, by using an approach that everyone can see is more scientific, precise and inclusive than any we've used up to now, would make huge strides toward improving public satisfaction with the underlying structure of the state that the public sponsors to manage its affairs.
Conclusion:
In closing this section of my blog, I will say that, if losing my business in 1992 and becoming homeless for a while was what was needed to give me the empathy and motivation to look for a way to help bring greater social accountability to how Americans pay their income taxes, it's a price I'm content to have paid.
When it comes to what each of us can do for society to be better, it's not what's in our bank accounts or our driveways that counts; it's what's in our hearts and minds.
