The idea presented here is the first and only tax system designed to both support the economy and reduce unemployment. And it does so by also vastly reducing the complexity of the taxation system and shifting the burden of taxation from individuals to productive economic enterprises.
It achieves these goals by directly tapping into the source of all income — profit, the objective of all capitalist economic activity. Rather than asking every person to pay a tax out of their income, the tax should come from the original profit of the endeavor in which they are employed. This system, called Distributed Profit Taxation (DPT), greatly simplifies the determination and collection of tax by focusing only on businesses — the generators of profit — without reducing either the amount of tax or the amount of profit, or the incentive for profit. In its construction DPT provides incentives to reduce unemployment by giving employers a high deductible for every employee, topped off with a high deductible for investment in the equipment needed to create more jobs. A separate part of the DPT system helps to stabilize the economy by boosting consumption in a recession with subsidies, and reducing consumption during times of inflation with a temporary tax.
Everyone would profit from implementation of the DPT system: the jobless would get employed, so welfare would be reduced, and everyone would benefit from stabilization of the economy at a high level of employment; businesses would be able to sell more goods and services, would face less paperwork, and would have a lower tax burden; individuals would not have to file or pay income tax; the government would still get ample revenue; and because of the universal popularity of the system, supporting political parties would get more voters.
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