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"Reason-Based Taxation:
The Solution To The Economic Crises"

The original concept of 'Reason-Based Taxation' was first presented via the WMail Philosophy Newsletter
Volume II Issue #9 in April 2001, then repeated on the Dateline Chamesa blog as Essay #86 [March 2009]
“Reason-Based Taxation (Redux)” and as Essay #92 [August 2010] “Reason-Based Taxation 2010”.

"The rich should contribute to the public expense, not only in proportion to their revenue,
but something more than that proportion."
Adam Smith [1723-90], in "The Wealth of Nations", 1776

You can support the principle of Reason-Based Taxation by doing the following:
1) Open the doc file version of this page (all .DOC files are extremely safe).
2) Save it to your harddrive.
3) Print ten copies (times four pages).
4) Hand several to people that might be interested, such as college professors and schoolteachers and accountants.
5) Snail-mail to congresspeople, senators, and other government officials, and to magazines & newspapers.
6) Email as an attachment to whoever you can think of.
Beyond that, tell people about Reason-Based Taxation.

        What was brilliant about the creation of the United States of America, beginning from the Declaration of Independence in 1776, was the boldly inventive statement that the individual always has the right to act in his/her best interest.
        This is also the root of Objectivism.
        But Man's inherent right to the good services of his/her government, along with other basic and unalienable rights, is prevented by the intentions of the extant Political System, in each and every country across the globe, in each and every hamlet, across each and every national border.
        Present government institutions seldom get the job done, whatever their stated purpose: the most grievous misfeasance here in America has been in the schools and in the legal industry. An entire generation are now adults who on average cannot read or write effectively and cannot think their way out of a paper bag. The American legal industry's top leaders in December 2000 and again in December 2004 handed over the U.S. Presidency to a usurper who sold his term of office to the oil & timber monopolies, and to who knows what other special interests.
        And the U.S. Supreme Court officially made the United States a fascist country with its execrable Citizens United decison of January 2010.
        “The Revolution is never over, the Class War is perpetual." The principles of Reason-Based Taxation provide a solution for the Class War problem.

*          *          *          *
        One percent of the population now owns 65 percent of everything in America. Twenty years ago, they owned only 35 percent of everything in the country: in the years since Dr. Ravi Batra established that base-line, the One Percent – the Oligarchy that rules this country – used the anti-democratic principles of Reaganomics to accrue 30 percent more of the totality of the assets in this country.
        But they do not have enough: they want it all.
        This One Percent, the Oligarchy, has spent millions of dollars to prevent any levy that might approach having them pay their fair share, the result being the Bush Tax Giveaway that was fast-tracked thru the U.S. Congress, the Republican National Debt that today stands at twenty-five trillion dollars, the 'G.O.P. Economic Meltdown' of 2008, and the still-worsening worldwide Great Recession.
        What is the Oligarchy's fair share? The calculation is quite simple and direct:
        The U.S. Defense Department spends certain monies for doing their job. which includes protecting the 65% of all the land and property and assets owned by the Oligarchy, so therefore the Oligarchy should pay 65% of the Defense Department budget every year.
        The Oligarchy would insist that they are good patriots, so they should be willing to pay a 65% share of the Homeland Security and Interior Department budgets every year.
        The Oligarchy owns 65% of all business concerns, big and small, so they should pay 65% of the Commerce and Transportation and Energy and Agriculture Department budgets every year.
        The Department of State probably goes overboard in fulfilling the wishes of the Oligarchy, but I say that the Oligarchy need only pay a 65% share of the State Department budget every year as well.
        The Oligarchy, the One Percent, should be paying 65% of the entire Federal Budget every year. The same calculation applies to every U.S. federal department and bureau and section.
        This principle applies also to each and every country around the world, to each and every state or province or canton or arrondissement, to each and every local government entity, down to each and every school district and water district.
        And besides, philosopher-economist Adam Smith [1723-90] said so: "The rich should contribute to the public expense, not only in proportion to their revenue, but something more than that proportion." (from "The Wealth of Nations", 1776)

*          *          *          *
        The Oligarchy that rules this and other countries owns sixty-five percent of everything, so they should pay 65% of the taxes required to supply the benefits that they derive from government in all its overlapping jurisdictions. Any other plan or assessment will concede to them the means to achieve their ultimate intention, which is to own one-hundred percent of everything – a return to feudalism. After the Oligarchy has achieved that intention, they have only your 'soul' – your Self – to take away from you and yours.
        The Oligarchy has already taken away your vote, 'without firing a shot', in the ChadGate fiasco of 2000: the U.S. Supreme Court anointed George W. Bush as President of the U.S. of A. in complete disregard for due process or for the will of the people, based on the wrong-headed certainty that it was right to do so and in the clear knowledge that no one could stop them.
        They ignored the U.S. Constitution in a 'dog and pony show' that was broadcast on national television and radio. Most Americans made no effort to watch or listen to this show, settling instead for the 'sound bite' camouflage served up by – you guessed it – the media conglomerates owned by the Oligarchy.
        And the U.S. Supreme Court officially made the United States a fascist country with its execrable Citizens United decison of January 2010 – effectively legislating the principle of "one million dollars, one vote".

*          *          *          *
        Previous iterations of class are disappearing, and are being replaced by a structure of Economic Class. The Oligarchy has replaced the Aristocracy, while assuming the same attitude of Divine Right that triggered the French Revolution of 1789.
        The lower economic classes, the 'proletariat', are defined as those who have no capital, nor means of production, and thus are required to sell their labor in order to survive. The Upper Middle economic class deals with the lower classes only while the latter are employed as servants.
        The entire economy works – or does not work – on the backs of the middle and lower classes, whose primary role in the latter XXth Century evolved into that of the Consumer Class: Notice that virtually every middle class American house-hold is in constant debt (even disregarding mortgage payments), which means that they are encouraged – maybe 'required' is a better term – to spend more than they earn, so that the Oligarchy can reap their Divine Right profits on goods that the Consumer Class does not need and cannot in truth afford. The Consumer Class has an envious lifestyle, but in actuality owns less and less: because the Oligarchy owns more and more.
        This is not exactly news. The system of Economic Class ensures the giving away of power to the Oligarchy, in the form of debt, under the constant and compelling threat of job loss. If the middle class worker does not purchase 'the latest', then the economy will collapse and the Consumer will be out of work and thrown into survival among the lower economic classes. The Consumer Class has been taught to spend in order to earn.
        This is in effect worse than the 'indentured servitude' that was common around the time of the U.S. Revolutionary War. A British or other freeman could get passage to America or an apprenticeship in a trade in exchange for an agreed-upon term, often three to five years. The difference between indenture and today's economy is that the Consumer Class owes the Oligarchy and there is no expiration date on the deal: The Consumer Class is required to stay in debt by the pressures of the consumer economy, of which the primary beneficiary is the Oligarchy. (Think not? Did your real net worth – exclusive of housing – increase by anywhere near 50% since 1985?)
        The Oligarchy has done such a good job of fulfilling their devious intention that labor union membership in the U.S. has been down to 15% of the work-force for a long time. President George Dubya honored his idol, Ronnie Reagan, by ordering the Northwest Airlines mechanics union not to strike, just as Ronnie busted the air traffic controller walkout in August of 1981. And the media soon began reporting that George Dubya would prevent a strike at Delta Airlines.
        The later years of Bush's reign saw the entire economy collapse, in the U.S.A. and around the world – the historic 'G.O.P. Economic Meltdown' of 2008. (American consumers no longer have jobs or spare money to spend or save, and U.S. consumer spending accounts for 25% of the world economy.) Dubya's agenda included looting the U.S. Treasury, and he did such a thorough job of screwing up America's future that (in typical Dubya incompetence) he screwed up the screw-up. The subprime lending debacle caused the banking crisis that caused the disappearance of half the net value of the stock market indexes, in a matter of months after the 2008 election. And the almost-funny part is that Dubya was supposed to leave the mess for his successor, but he screwed up so badly that the collapse happened before the November 2008 election, and Barack Obama swept into the White House charged with cleaning up Dubya's mess.

*          *          *          *
        Until the structure of the Economic Classes is redesigned so that the Middle Class, the now 'Consumer Class', is able to acquire wealth as a result of their labors, then matters can only get worse. The only remedy is to increase the taxation levied on the Oligarchy so that they pay their share for the government services that they receive, all down the line.
        The One-Percent, the Oligarchy has already acquired two thirds of this country's total assets; the Wealthy Class (the top 20% of taxpayers) owns 85% of this country's total assets. The Wealthy Class have more than enough money to bribe Congress and local officials to do their bidding, but We The People showed the world in November 2008 that true Power lies with us. The Wealthy Class will fight 'tooth and nail' against Change, so Americans must remain steadfast and vigilant and never back down.
        Like it or not, America and the world are now engaged in Economic Class War.

*          *          *          *
        There are three parts to the policy of Reason-Based Taxation, which in combination will solve the over-long debate on the legitimacy of the income tax as well as solving both the annual budget deficit and the perpetual Republican National Debt.

        FIRST: Restructure the personal income tax so that whatever the Federal Budget from Congress might be, that the Oligarchy is billed for 65% of that budget, that the Wealthy Class (top 20% of earners, including the Oligarchy) is billed for 85% of that budget, and the Middle Class is responsible for the remaining 15% of the budget. (The lowest 40% of earners, the Poor and the Working Poor, pay enough in sales taxes, etc.)
        Might be a good idea to set a tax bracket for the top 10% of earners, too.
        Such a plan enacted into law will include a review each of the first five years (for fine tuning), and then every five years or so. That way, as the Republican National Debt is paid off, and the Wealthy Class's holdings are drawn down, then they will be paying less in taxes: When the Oligarchy owns only, say, 50% of everything, and the Wealthy Class owns only 70%, then they need to pay for only 50% and 70% of the Federal Government's budget.
        And certainly, once the Middle Class / Consumer Class is again thriving, they won't have a problem with paying for their 30% share.
        The present annual Federal Budget includes an automatic deficit (since the Oligarchy is so anal-retentive); this Reason-Based Taxation plan would have the first budget be something like two trillion dollars for operational costs & economic stimulus and another trillion dollars to pay down the Republican National Debt.

        SECOND: The corporate income tax will also need to be restructured. The Working Minds 'Benchmark' for executive pay is that the President of the U.S. is paid $400,000 per year, plus perks like travel and dinners at foreign embassies, so a good baseline measure is half a million dollars in compensation to the Leader of the Free World.
        No executive of any corporation is worth a nickel more than that.
        So compensation of executives above the 'benchmark' half million will be taxed at 50% to the corporation.
        A corporation is allowed (NOT entitled) to a profit of, say, 10% on total revenues. All loopholes are cancelled; any pre-tax profits above the legitimate 10% are taxed at 50% also. (See Part 3)

        THIRD: Corporations will be forced to practice actual Capitalism -- see Working Minds Essay #40 "Paleo-Capitalism" [February 2004].
        Reason-Based Taxation gives the corporation four choices for not paying the 50% tax.

  • Just don't pay executives over half a million dollars per year, all-inclusive, no loopholes.
  • Reduce the profit to 10% by expanding the business, which will take the form of reinvestment: building new plants, offering new products, and such – which actions qualify only if located within U.S. borders.
  • Reduce the profit to 10% by lowering prices or raising wages. Wage increases can include salary changes, bonuses, shorter hours or increased vacation time (for same pay), and employee retirement and E.S.O.P. plans. Qualifying wage increases or bonuses must be a single percentage rate for all employees, pro rata against their annual earnings for the year or the quarter. Naturally, this option may not affect the situation until the following year or quarter, but the job of the executives will be to plan ahead.
  • Reduce the profit to 10% by purchase of treasury shares, i.e. retirement of stock shares available on the market by trading excess cash for stock owned by outsiders. The goal in Paleo-Capitalism is to eliminate debt in the form of outstanding shares being day-traded by speculators within the Stock Market Casino [WM Essay #18 December 2001].

    *          *          *          *
            We The People can take back control of our country and our economy and our lives by instituting Reason-Based Taxation. This may have to begin with local or state legislation, but until the Federal Government is brought to heel and wrested away from the Federalist Society and P.N.A.C. people and the right-wing media and the Oligarchy – the anti-American Forces of Dis-empowerment – there will be no rest for the Progressive forces that are the only hope for a return to rule under the Constitution.
            Discover that you still have power as a Voter and as a Citizen, wherever you live: Simply by USING that power you recreate its existence. By retaining your Natural Power, you keep the Oligarchy – the Culture Structure in its various forms – from stealing from you the Natural Power that was established by the Declaration of Independence and is the basis of the U.S Constitution, and the most precious gift of America to the world.

    [copyright 2001, 2009 & 2010 by Gary Edward Nordell, all rights reserved]

    The preceding is excerpted from Chapter 20 of my forthcoming book, "Working Minds: A Philosophy of Empowerment".

    see also

    Working Minds Essay #18 "The Stock Market Casino" [Dec 2001]

    Working Minds Essay #40 "Paleo-Capitalism" [Feb 2004]

    Working Minds Essay #42 "The Oligarchy" [April 2004]

    Working Minds ‘Business & Economic Monopolies’ Page
    Working Minds ‘Barbarians & Fascists’ Page

    Meaning & Purpose / Working Minds Philosophy of Empowerment

    Spirit of America Bookstore’s ‘G.O.P. Economic Meltdown of 2008’ Page

    Spirit of America Bookstore’s Adam Smith [1723-90] Page


  • You can support the principle of Reason-Based Taxation by doing the following:
    1) Open the doc file version of this page (all .DOC files are extremely safe).
    2) Save it to your harddrive.
    3) Print ten copies (times four pages).
    4) Hand several to people that might be interested, such as college professors and schoolteachers and accountants.
    5) Snail-mail to congresspeople, senators, and other government officials, and to magazines & newspapers.
    6) Email as an attachment to whoever you can think of.
    Beyond that, tell people about Reason-Based Taxation.


    NEWS UPDATE MARCH 2012: At the Democratic Party of New Mexico's Pre-Primary Convention in Albuquerque, New Mexico, then-Congressman, now-Senator Martin Heinrich accepted the 4-page 'Reason-Based Taxation' document and promised to read it.

    NEWS UPDATE OCTOBER 2012: At a political breakfast in Albuquerque, New Mexico for early voters, then-Congressman, now-Senator Martin Heinrich told me that elements of this 'Reason-Based Taxation' proposal were enacted into law by Congress.

    NEWS UPDATE SEPTEMBER 2014: After a quick conversation about this proposal (and handing-over of the 4-page 'Reason-Based Taxation' document) at a political rally in Los Lunas, New Mexico, Senator Tom Udall immediately commented that 'that's very smart'. (The assumption is that he is 'on board'.)



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