In this blog the focus is the Proposal on
the abolition of Taxes. The re-set proposes to abolish the current tax system
and replace it with ‘TEAL’ – Total Economic Activity Levy:
“TEAL is very much a ‘pay as you go’ tax. Every
time money is withdrawn or paid into a bank account, a tiny percentage of money
from each transaction will speedily find its way into the treasury. Even people
without bank accounts will contribute, because whenever a pack of cigarettes or
a loaf of bread is purchased, the seller (say a shop) will be paid, and when
the shop pays into his bank TEAL will be collected, and if you sell your labour
(i.e. you have a job) TEAL will be paid by your employer and collected by your
bank.”
This principle is the same one we propose
under the Living Income Guaranteed proposal. Within such a system, the focus
changes from ‘redistribution’ to plain ‘contribution’. It’s not about trying to equalize incomes and
moving it from the rich to the poor – but a matter of: if you make more use of
the economic system, you proportionally contribute more to sustain it. One
likes to believe that one’s wealth is derived from merit alone – but it simply
isn’t. There is an entire economic system in place that enables a successful
person to be successful. There are those who have gone before you, who have
shared their know-how with you, there are those who have an income to buy your
goods or services, an income they earned through participation in the economic
system, there is physical infrastructure like roads and railway systems that
enable all economic activity. If the economic system was self-sustaining and
never required any financial input in order to maintain it or correct its
inherent weaknesses, then we could say the economic system is a free one. Obviously,
that is not the case. The ‘pay as you go’ tax is therefore a reasonable method
of collecting the funds to be re-invested within the economic system that each
one depends on.
If a basic income or living income is
provided through non-tax funding – then the ‘pay as you go’ tax or ‘TEAL’
should be sufficient to mobilize the funds needed for other government expenditures,
which we suggest would be quite limited if the economy in itself is largely corrected
and empowered through the integration of the Living Income or Basic Income – then
other taxes can indeed be abolished.
