Directed Tax per use

Cold medicine seems to be triggering my creative juices, so I decided to write. Anyway, we hear or read often about how unfair our tax system it is, many of us think, if only there was a better system. Conservatives say people at top 20%, those who earn through hard work and innovation, pay 80% of the tax. Liberals say people become become rich by taking advantage of the system and services (government funded universities, infrastructure, low cost labor covered by medicare etc) need to pay their fair share and help out the unfortunate ones.

"I am paying too much" or "you are not paying for what you use" can be resolved by pay for what each entity uses. The problem here is multi-fold. For example a company mines for coal/oil they are "supposed" to pay royalty. Now that revenue is too fungible i.e. it goes to what ever programs the government deems necessary. This allows the government to create wasteful programs, under funded programs for political gains, budget deficits sitting on top of an unfair tax system. So the collection system is unfair and the distribution is unfair and corrupt. Here is a way to fix the collection part. We have pay-per-view boxing matches, pay-as-you-go cell phone, why can't we create a "tax per use" system. And to fix the distribution side we tie each source to a target service that created the tax revenue, followed by investments for the programs and so on. And voila we have "Directed tax per use". And to fund basic government services like defense, law enforcement, judiciary, immigration, emergency management etc the existing tax has to reduced to a graduated but lower base tax regime that nets every one.

We already have many examples Directed tax per use:

• Cigarette taxes fund expenses caused by smoking related illnesses.
• Skilled worker H1B visa fees funding education programs for US citizens.
• Restaurants and bar taxes funding sports stadiums.
• Tolls and gas tax funding roads, bridges etc

We need to identify areas that need funding with proper source that benefits from such investment.

• Coal mines could found global warming related and mitigation projects.
• Road maintenance funded miles driven per annum.
• Each educated worker employed, discoveries and inventions from government funded research programs to education and research programs.
• Number of medicare supported employees and families to medicare tax.
• Part of customs duties could fund programs help create jobs for those displaced workers.

The tax has to be tiered for example all coal is not the same, different vehicles cause different levels of wear and tear in different regions, different levels/types of educations cost different amounts of money etc.

The system will help in many ways.

• It ensures each entity pays for and pays only for, the services/resources that it uses or depletes.
• It will help sustain services that help existing and useful services.
• It will also help create replacement or modernize acquisition depleting resources.
• It will help find ways to find remedies to industrial activities that damage the environment.
• It does not tax the grandma who only drives her car 2000 miles a year at the same level as the commuter who drives 1000 miles a month.

An intangible benefit, it helps the nation define the priorities and focus on it. And we can always definitely can use a national dialogue on that topic.

It will also help us eventually get rid of some meaningless connections that exist now, like house tax funding schools in many school districts. Income tax from hard working people going to social security programs for people who have and will never contribute into the program. The tax system will hopefully lag behind new and emerging industries and hence allowing for an automatic low/no tax regime for innovative new industries.

The main point here is to create a direct channels of income between programs and the beneficiaries. It can be complemented by a well thought out VAT and a tax percentage ceiling for a well balanced and a fair tax system. Most of the tax collected will be backward looking i.e. so are most of the expenses. We need to employ some creative thinking to create funds for forward looking programs.