The PH Balance Of Taxes

March 13, 2009

Who can figure out the tax system of our country?  I can’t.  In fact, most I.R.S. agents don’t even know it in its entirety.  Let me fill you in on a little secret… the government likes it that way.  They made it impossible to understand on purpose.  Why?  So that they can take more of your money without you even knowing it.  But, what the government fails to recognize is that the current tax system oozes with cracks and inefficiencies.  As a result, the government is missing out on billions of our dollars.  So, in effect, the crazy plan the government put into place in order to capitalize on the amount of tax money they take from us is the same plan that prohibits them from being able to hold onto all of it.  Only in America.

As a businessman, I know that the key to stroking any deal is when both parties are presented with the opportunity to gain something.  So, I propose we help the government maximize on the amount of money they make from us.  WHAT?!? WHY WOULD ANY CONSERVATIVE SAY SUCH A THING????  Before you all freak out, allow me to explain.

As we all know, every time we get our paychecks it comes to us after the government has taken out our various taxes.  For demonstration purposes, let’s suppose $100 comes out of every paycheck for taxes.  That $100 represents 100% of the total amount of taxes that come out of every paycheck.  That 100% is then sent to the federal treasury and they do whatever it is that they do with it and we live and balance our lives based upon never seeing that money.

Well, what if every time our taxes are taken out of our paychecks instead of the entire 100% going directly into the federal treasury only 90% went in and the remaining 10% didn’t go back into your paycheck or your pockets but it was instead automatically deposited into a private investment account that was already set up in your name.  And what if there was a restriction placed upon this investment account that stipulated you could only use the money to 1) buy a home as a residence 2) open a retirement account 3) start a business or 4) invest on Wall St.

Over time, this 10% that get’s redirected with every paycheck is earning interest and compounding on top of itself.  Depending upon your tax bracket, most tax payers would have a fairly substantial amount of money built up in there in just a few years time.   Think about it, if within 20 years 60% of tax payers in America were home owners and/or had a retirement account and/or owned a business and/or were invested, would that or would that not be good for our economy?  It would.  And when the economy is good, is that or is that not good for the value of our currency?  It is.  And when our currency is strong, does that or does that not encourage foreign investment into our country? It does.  And when all of this is going on, would that or would that not create more revenue for the federal treasury? It would.  And by the way, the last time I checked, if you own a home you have to pay property taxes.  If you have a retirement account, you have to pay taxes on the assets at time of distribution.  If you own a business, you pay taxes and if you are invested you pay taxes on the assets as income. 

And so, we have in fact, created more tax revenue streams for our government than what currently exists while, at the exact same time, more American tax dollars are being put to work for American tax payers and our own tax money is financing our own personal investments.  Everybody wins!

I call it the “PH Balance” because it’s strong enough for the government but PH balanced just for you.

Paul M. Harvey


3 Responses to “The PH Balance Of Taxes”

  1. jessica said

    I know you will all think I am nuts… But I like the fair tax thing huckabee was pushing!

  2. American Confucius said

    I’m not sure how a strong domestic currency encourage foreign investment. On the contrary, I think it’s a weak currency that does because our goods/assets become cheaper thus increasing foreign purchase power. Thus, we see higher foreign investment. Like the past couple years with the falling dollar, foreigners have been picking up real estate on the cheap and our manufacturing sector has seen increasing international sales as well. Moreover, another consequence of a falling dollar is the shrinking of the trade deficit – increased exports and decreased imports. And again, we’ve seen this the past couple of years.

    A stable currency is a strong currency. But you may be right to the extent that a strong stable currency will encourage foreigners to buy up more of our dollars. I’m not so sure however whether that’s necessarily a good thing.

    But I agree with your general point that the government is the least efficient spender of our money. But I think you miss the point about allocating a portion of our tax money to some savings plans. Your idea may generate increased tax revenue but the unintended consequence would be exactly what you bemoan, that is, a more complicated tax code and more bureaucracy. Instead, how about lowering taxes or better yet going to simplified form of a flat consumption tax. Arthur Laffer has successfully shown that decreased tax rates lead to increased tax revenue.

  3. Thanks for your thoughts. To your point, allow me to also say that I too agree with the premise that lower taxes leads to an increase in revenue. I am a free market guy and if people have more of their own money then they will spend it, hence jobs are created, goods are bought and sold and new wealth is generated. I also like some of the flat tax & fair tax plans that I have heard from Steve Forbes and Mike Huckabee.

    My biggest point was, though, that the government in general does not like lowering our taxes and does not like a flat tax plan because they can’t see the big picture on how that creates more wealth in the long run. They want their money now. And so terms such as “lower taxes” and “flat tax” have become almost red flags. So I proposed an alternative.

    One thing that I do like about my idea is that the restrictions that are placed on how the tax savings funds can be spent basically forces more people to become free market people. Lowering taxes does create new wealth for free market people but it doesn’t create new wealth for those of us that are less business saavy. This savings fund will introduce people to a whole new world of business, investment, real estate and savings that they may have never been exposed to before.

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