Scott Smith's Tax Plan
                – The best tax plan ever.
By Joe Tassinari

Presently, in the United States there is approximately $15 Trillion in taxable income – the pool of money the Feds tax to operate. The Federal Government spends approximately $4 Trillion per year from taxable receipts. Smith’s plan is to acquire the $4 Trillion via a Payment Tax. His plan eliminates income tax, payroll taxes including social security and Medicaid taxes, inheritance tax and excise taxes on phone bills, utilities, fuel and airline tickets.

"Because the pool of money being taxed will increase from $15 Trillion to $3,615 Trillion, Americans would pay only one-eighth of one percent with Smith's payment tax."

The Federal Government's annual budget (money spent) has been $4,000,000,000,000 (4 Trillion) which pays for the government, federal programs, social services, military, etc. A key factor of Smith's plan is that the Federal government can continue to spend every bit of the $4 Trillion it presently spends and federal taxes can be reduced by 99.96%.

Under a Payments Tax (PT) U.S. citizens will be taxed on 1/8th of 1%, anytime they receive a payment. For every $100,000 in family income a mere $125 would go to Federal taxes. The national anxiety surrounding the due date of April 15th would disappear for ever. No longer needed would be income tax forms and the 70,000-page tax code. 

As a U.S. citizen you would pay a payment tax only once – when you receive money and not when you spend money. For instance – if you buy something at a store, the store would pay the payments tax. For every $100 spent, the store would pay 12.5¢ and do so willingly. Why? Because by paying the 12.5¢ the store would no longer have to pay corporate income taxes or match social security payments for their employees.

The reason the Payment Tax need be only 1/8th of 1 percent (.00125) is because it would include a source not currently being taxed – Financial Settlements. Because the pool of Financial Settlements, 3.6 Quadrillion, dwarfs the current pool being taxed, 15 Trillion, the Federal Tax rate would drop from the neighborhood of  27% (0.27) to a mere 1/8 of 1 percent (.00125).

Here's a quick look at the math:
$     15 Trillion (U.S. annual income)
$3,600 Trillion (U.S. born Financial Settlements)
$3,615 Trillion (Total pool to draw Federal tax from)

$3,615 Trillion (All payments made in the USA taxed by the Payment Tax)
  x .00125 (1/8th of 1%)
$4.52 Trillion (the annual amount the U.S. Government spends on everything plus an extra $520 Billion)

What are Financial Settlements?

Financial Settlements are giant maneuverings like international bank transfers, payment instruments by non-banks, and payments made through international securities clearing corporations, trust companies and the Federal Reserve. Financial Settlements involve money transactions known by banking aficionados but are unfamiliar to the general population.

The Bank for International Settlements in Basel, Switzerland, known as the BIS, publishes an annual report known as the Red Book, which reports on the volume of payments of the major nations in the world. The Committee on Payments and Market Infrastructures at the BIS oversees the publication of the Red Book and U.S. born International Settlements totaled $3.6 Quadrillion for 2015. U.S. companies who make Financial Settlements could have 1/8 of 1% deducted and wired directly into the U.S. Treasury.

Why would corporate entities who currently pay zero tax on Financial Settlements agree to pay any tax, even if it's a mere 1/8th of 1%?

Because the spending capacity of the entire U.S. economy would increase and raise the asset value of the corporate entities. As of this writing, if you add up federal income tax, all federal payroll taxes, federal gasoline tax, etc., for every $100,000 earned $27,000 (on average) goes to pay Federal taxes. For every $100k earned under Smiths's PT a mere $125 would go to the Feds and the family would have an extra $26,875 to utilize. This would be a huge boon to the U.S. economy and benefit the entities (Citicorp, CalPERS, Berkshire Hathaway, et al) who make International Settlements. In other words, by paying 1/8th of 1% on International Settlements, Smith estimates that corporate holdings would increase 4% – 7%. 

The increased consumer spending would up the asset value of the companies paying the Financial Settlement taxes. That asset value would dwarf the 1/8 of 1% in Payment Taxes made by these corporations. In other words, those "one-percenters" that some people want to harvest for their wealth would welcome Smith’s Payment Tax because their gross value would increase by at least 4%. 

The BIS monitored corporate entities would pay $1,250,000 per $1 Billion in settlements (where they are paying $0 now), but would gain $40,000,000 (per $1 Billion) in holdings because of the boon to the economy. Win, win … win. Finally, a plan to tax "the rich" (one-percenters) where "the rich" would gladly pay. Bernie Sanders and Donald Trump will cheerfully unite around Smith's Payment Tax!

Additionally, and this is beautiful, Smith points out Tax Inversions. We know them as offshore tax havens whereby corporations keep their money in places like Ireland and Cypress avoiding USA corporate taxes. Inversions are legal and good business practice for multinational corporations. Because a .00125 tax is cheaper than the transaction fees of tax havens, trillions in offshore Inversion dollars would pour into the U.S. economy! The United States would become the new Cayman Islands, giving the Feds an even greater pool of money to tax.

Smiths Payment Tax plan is brilliant because it’s a win for poor and wealthy people alike; everyone will keep the vast majority of the money they make. It is proportionate (paid equally by all) as mandated by the U.S. Constitution (Article I, section 2).  No one would ever have to file another income tax form. As Smith points out on his website, “New ideas are never obvious except when seen in hindsight.”

Scott Smith, a Wall Street entrepreneur, lives in Boulder, Colorado with his wife Sheri and has six children. His Payment Tax idea is the best tax method ever introduced in the history of our country.

Information for this report was obtained from Scott Smith’s website: http://www.scottsmith2016.com and Ellen Brown’s podcast: http://ellenbrown.com/

Joe Tassinari is an organizational development specialist who's staff trainings develop extraordinary workplace cooperation.