Chapter 16
Tax
The tax system, particularly in France, presents a major problem. Indeed, modifying a tax allows at a lower cost to give the illusion of governing, without taking the trouble, namely without reworking the organization of the functioning of society and more particularly of public services. But a tax taken individually is generally neither good nor bad. Only the system of taxation and redistribution taken as a whole can be evaluated. In this chapter, we propose a system of taxation and redistribution that is as simple as possible, while being sufficiently comprehensive to ensure the objective of making progress benefit the greatest number of people.
The tax system
The tax system we propose consists of only three taxes.
The first tax aims to structure production.
This is a kind of VAT based on a variable rate depending on the social and ecological evaluation of the product or service considered, as well as the distance between the place of production and purchase. Businesses only partially recover VAT in line with what we saw regarding subcontracting in Chapter 12.
The second tax aims to contain inequalities between individuals.
This is a linear tax on wealth above the median wealth, the rate of which ensures the stability of inequalities. The level of inequalities is defined by a stable calculation rule on the wealth curve, and adjusted mechanically to guarantee the stability of the result, that is to say that we decide the level of inequalities instead of simply noting its evolution.
The third tax ensures the stability of the state's assets.
This is an inheritance tax whose rate adjustment automatically ensures over 30 years the reimbursement of the entire public deficit. In other words, when you inherit, you inherit less of the debt accumulated by the previous generation. We thus put an end to this absurdity called public debt which consisted of allowing individuals to live on credit, then having their descendants inherit assets purchased on credit while making the community inherit the corresponding debts in the form of a public debt.
The redistribution system
The redistribution system that we propose also consists of three elements:
On the one hand, the financing of organizations, which we will see in the next chapter covers the partial or total financing of what we currently call public services, such as health, education, etc.
On the other hand, universal income modulated by positive discrimination. Positive discrimination is aimed at the elderly, disabled and sick people and other disadvantaged social groups.
Compensation for losses.
Some additional details regarding the taxation/redistribution system
Only the first tax, VAT, is subject to public policy. It is above all the tool for ecological transition and territorial planning. Indeed, this first tax introduces the notion of generalized customs tax, that is to say a rate depending on the distance traveled by the product or service.
The second and third taxes are mechanical and should be defined in the constitution.
With this system of taxation and redistribution, there is no longer any need for tax loopholes and other complications. All the regulation is contained in the first tax as well as the financing of the organizations, which respectively guide consumption and production.
In this system, we do not take out insurance. Being insured is part of social protection, and the banker, which we deal with in the next chapter, also takes care of compensation for losses.
Financial transactions
In the rest of this chapter, we designate internal as all the countries which have agreed to apply at least partially the precepts of this book, and external as the others.
All citizens and internal legal entities are required to have a single bank account in an internal bank.
Internally, there is no longer any paper currency: all transactions are dematerialized.
A transaction indicates the date, amount, buyer and seller. If the buyer or seller is a legal entity, then in some cases the transaction also specifies the natural person carrying out the transaction on behalf of the legal entity. For example, in the case of paying a hotel bill, or purchasing in a store, if the buyer is a legal entity, then the transaction must be completed on site by proof of identity. a natural person.
All alternative currencies are strictly prohibited.
There is a concept of certification for legal entities.
All internal legal entities can only practice if they are certified.
An external legal entity (commercial company, association, etc.) can be certified provided that it provides a certification body (they are all internal) with an exhaustive list of its beneficiary natural and legal persons (which has started to be put in place in Europe to fight against tax evasion), that the beneficiary legal entities are themselves all certified, and that the certification body has ensured that the reality of the activity corresponds to the reason for being expressed by the legal entity, which must be a real activity, which excludes largely passive holding companies.
Only certified legal entities can operate internally (sell).
For example, a pleasure boat, if it belongs to a legal entity, can only access internal ports if the legal entity that owns it is certified.
Robustness analysis
As this system does not provide for income tax, the corresponding frauds disappear mechanically.
Such a tax system remains vulnerable to two main types of fraud:
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'Black' trade to avoid VAT.
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The concealment of part of one's heritage in the form of assets in foreign countries.
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Let us first point out that the main source of regulation of this system is not the robustness of the tax system, but rather the fact that the organizations are small and have no capital. So there are no people who become disproportionately rich thanks to the internal economy. This perfectly illustrates what we specified at the beginning of this part of the book, namely that the value of the different measures proposed is above all linked to overall coherence.
Then, hiding part of one's assets in the form of informal assets in internal companies is difficult because of the certification obligation for them.
The most obvious source of tax evasion therefore remains converting local assets into foreign assets, exactly as before.
In this case, we hardly worry about what the fraudsters will do with this money externally, but we have put a serious barrier to its disguised use internally, by dematerializing the currency, and by requiring it to be indicated on a most of the purchases made by a legal entity the name of the natural person who represented the legal entity.
Regarding so-called 'black' trade, it is also the total dematerialization of money and the fact of only being able to have one and only one bank account, in a strictly internal bank, which limits the scale of fraud. .
Methodological choices
The first question is: “What is the optimal number of different taxes? »
If we imagine a tax system made up of 12 different taxes, then its modeling is a function of dimension 12. However, at this level politicians are subject to the cognitive bias of overconfidence and in fact understand it as the sum of 12 functions of dimension 1. In other words, each tax potentially has effects on all the others, so that as soon as their number increases significantly, no one really controls the effects of an adjustment on one of them.
This is highlighted by the investigation presented in the program Info secrets which we referred to in Chapter 4 when we discussed the argument used by President Macron to defend the replacement of the ISF by IFI.
So the more sophisticated we make the tax system, the more we reduce its robustness, that is to say the more we multiply the opportunities for tax optimization that are counterproductive for the community. The infernal spiral is to add new taxes, therefore creating new holes into which the richest, and therefore the best advised, will rush to the detriment of the poorest.
This is why it seemed essential to us to define a tax which guarantees the stability of the level of inequalities, instead of piling up taxes which only contribute to it. From our point of view, we can possibly discuss the modalities to adopt to obtain this, for example tax on assets, on income, or mixed, but in all cases we must ultimately arrive at an effective guarantee.
Our wealth tax has the only flaw in tax fraud, and that is why instead of supplementing it with other forms of taxation, we have chosen to constrain the system much more strongly than today. financial transactions to limit it.
The second question is: “What must the tax system address to be socially satisfactory? »
Should it be very simple like the one we are proposing, and therefore deal very roughly with all the particular situations of citizens, or should it aim to tend towards maximum tax justice by integrating as many particular cases as possible.
Our option was clearly the first, for the reasons of robustness that we have just mentioned. Conversely, we rely on associations and organizations to take care of special cases. This is why the system of financing organizations that we have adopted, and which will be described in the next chapter, makes it possible to have both organizations which play a production role, as well as others which play the role of administrations. , others who play an association role, and finally others who play a social service role. It is on this model that it seems desirable to us to rely, because to correctly deal with particular cases, however sophisticated they may be, a system of rules at the national level remains extremely crude, and on the other hand, the mechanics extremely rigorous functioning of the organizations that we described in the second part guarantees the possibility of delegating public service missions to them under the best conditions, and also guarantees the decentralization of this delegation since it only involves a banker from a banking organization , which itself is highly delocalized due to the number of around a hundred set for the workforce of an organization.