The reform named after Object Oriented Programming. The Tax Aware Account is a computer object that wraps around a bank account. The account includes the information needed to calculate a progressive tax.
Workers who choose this option would receive their entire paycheck into the Tax Aware Account. The account will calculate the tax rate and pay taxes when the user withdraws money.
The accounts include all of the information needed to calculate taxes in real time; so the reform eliminates the need for an annual tax return.
The Object Tax calculates the same tax as the income tax.
The big difference is that the money flows from the worker and not from the employer.
The reason that I developed this reform was because I believe people would have a better understanding of governance if they saw the money for governance flowing from their account.
My reasoning is based on the observation that self-employed workers who have to send money to the government have different opinions than workers who have taxes withheld from their paycheck.
The reform also changes the focus of the tax debate from jobs and employers to the financial well being of individuals.
Personally, I do not think the United States has a tax crisis. We have a spending crisis. Tax reform will not change the spending habits of Congress. Changing the view people have about taxes might help encourage long term change in Congress.
I consider myself to be a classical liberal (a close kin to Libertarianism). I think changing the flow of tax dollars so that the money goes through individual accounts is a positive move.
More importantly, I think the reform could gain bipartisan support. I think this for several reasons:
- The reform would streamline the tax collection process by eliminating payroll withholdings and the need for an annual return.
- The Reform is not disruptive. The reform is presented as an alternative that calculates the same progressive tax rate as the existing tax.
- The reform adds transparency to the tax code by creating an open source project to write the software for the Tax Aware Accounts.
- The reform also has a cool factor. The reform uses the design methodology used to create smartphones to create a tax collecting computer program.
- From an economic perspective, the reform transitions the current income tax from a production tax to a consumption tax.
While I do not think we can solve the problems of excessive government spending with tax reform, I encourage people to engage in debate about tax reform because such debates highlight the fact that our state and federal governments have exceeded their spending capacity. No matter how we configure tax reform, America simply cannot afford to continue the wasteful spending that we see in Washington DC.
I am running a Kickstarter Project so that I can self-publish a book. I am disappointed that the campaign hasn't received any feedback yet as I feel that this approach to reform is the best that we can do in 2016.
The campaign is young and I may receive some feedback before the campaign is through.