Equal Tax Law Model

See which sectors are getting the most rich in the world and you can deduce which businesses are favored by legislation globally.

At the forefront has been for decades the oil and other related process industries, such as plastics. That is, the worst polluters in the world. It means that global pollution has the support of global legislation. The oil industry doesn’t pay a lot of tax, but you pay it in the form of high fuel taxes to save the world.

In addition, there is the work of computers, which has legal protection for paying almost nothing for the benefit of societies. When you work, in addition, many different costs have to be paid for that work, such as various taxes, pension insurance premiums, etc. But when a computer sells a program, products or services 24/7, nothing is charged. Therefore, this sector is getting rich.

In practice, this means that you can buy computer games quite cheaply. Also plastic buckets and plastic shopping bags and other goods made with robots, for example. But the house you live in is almost twice as expensive as it would have been if there had been as less para-fiscal charges in its construction as in those others.

Finland’s gross domestic product is about 200 billion euros a year. If it were produced exclusively by Finnish computer game companies, it would employ about 35,000 people. If the same EUR 200 billion were generated by the clothing industry, it would employ 3.5 million people.

From this, everyone can understand, except the Finnish politicians, that mechanization and automation are significantly supported by legislation and the effect of state support measures. That is, those industries that can make a business without or almost without workers will be enriched by the work of others. 
This harmonized legislation in the EU is also causing problems in countries where a significant proportion of GDP comes from work. For example, countries that live from tourism. Greece, Italy and Spain, among others.

In my opinion, the state should take care of the well-being of its citizens on an equal footing. This means that among other things the state takes care of health care, the elderly, sick leave, social security and pensions. But only at the basic level, such which is sufficient for livelihood. If someone wants better insurance coverage or a higher pension than the state offers, he or she pays for it to the private sector. Because the state takes care of everything, money collection can be simplified.

For all these reasons I ended up to a tax model that collects all the necessary payments from companies (employers) in a single payment. It’s a very simple way for any business, but especially for start-ups. They don’t have to learn dozens of laws just because they want to do something on their own.

Equal Tax Law Model,
from which the Professor of Economics at the University of Helsinki said already in the late eighties, that it is the very best for the poor countries where should get fast new jobs.

Perhaps the current economic situation is forcing to think about the priorities of things again.   

The collection of fees, through the businesses, change to be paid by a single tax.

– The tax is tied to the company’s sales income. It is paid on domestic sales larger than exports.
– The amount of tax is staggered on regional political grounds.
– The tax deduction does not include any reduction rights, but is calculated at all times of the sale.
– The company is no longer afterwards taxed because of the calculated result.
– Would be paid general social security tax, the basic pension, sick pay, unemployment benefits, for both, worker’s and entrepreneur’s.
– Additional pension could the person themselves buy a private pension insurance.

In addition, for Equal tax is also needed the incentive system, which attracts to do work and to entrepreneurship. It is the only way to meet society’s stable and assured functionality. The employees get on top of the salary, in addition, the production subsidies, which are also tied to the sales income. From it the company pay an amount of current capital taxes to the state. Entrepreneurs and owners are connected to the same system so that all of their company or companies brought by income or capital dividends are taxed as capital taxes, which the company pay to the state.

The benefits of Equal tax model
– To simplify, clarify and equalize business rules of the game.
– To provide effective protection against cyclical fluctuations.
– To prevent the wave of bankruptcy and birth of banking crises.
– Companies do not need any more grants and discretionary subsidies or regional aid.
– The system is easy to absorb, understand of the law does not need special training or expertise.
– The system is easily controllable.
– To stop the underground economy.
– Labor-intensive business environment improves and makes them profitable.
– The number of permanent jobs is growing rapidly.
– Purchasing power will increase significantly.
– To increase government tax revenues quickly.
– To provide an opportunity for businesses to generate their own capital for investment and seasonal fluctuations.
– To facilitate product development and manufacture, for example, seasonal storage, so to reduce it through seasonal forced vacations and job cuts.
– The value of company will rise.
– Effectively preventing the product recycling to through billing from vendor to another, to keep prices in check and facilitate control.
– Creates reliability, security and emotional well-being.

EASY CONTROL
With random checks can see, that the purchased product or service is also recognized in the accounts. Three-tier scale of penalties, from fines till the imprisonment and life-long ban on business operations.

Example tables of the influences of the current laws (First year)

The accompanying table examples, show how the investment level of society produce for itself. In those have been compared to three company’s different way to produce the same product and a revenue of it to society. And the difference between the current practice and the Equal tax. The tables have been drawn up 1988, on the basis of realized turnover, in comparison of clothing and paper industry. Marks are changed to euro. For comparison, I have put between these companies the fictitious company, which roughly corresponds to partially mechanized companies, such as a saw- or engineering industry.

All the companies have a turnover of EUR 1.5 million. (Domestic sales revenue inclusive of VAT (22%) 1,83 million) Raw material purchases to be deducted is marked on every as uniform. The differences between companies focus only to how many employees are needed to achieve the mentioned sales results. And what are the influences of investments. It shows also to how does the statutory of taxes and social security costs consist, when the amount of employees and the investments varies.

Table ’The society share of domestic sales ”
Red column, the company is absolutely a labor-intensive. It does not use much machinery or services for product making. It has not invested in, nor received investment support grants. Has a staff of ten employees. 1.83 million in sales revenue, the calculated benefits of society with all taxes and statutory payments are together more than 700,000 euros.

The green column, the company has invested in machinery and equipment 500 000 euros. It has streamlined its production and improved profitability. It is able to pay their employees a higher salary, but the count of the workers is only half of what the previous company needed to achieve the same turnover. The company receives some support from their investments, but due to the higher earnings will also pay taxes of the profit. The result point of view of society’s, is still considerably poorer than the previous. 1.83 million in statutory payments and taxes gives 570,000 euros yes, but on the other hand, the various refunds and subsidies are reducing society’s total receivables to 430,000 euros.

The blue column, the company has invested in machinery and automation million euros. It is capable by one employee to the same 1.83 million in sales income. From this operation the total benefit to society is only 115,000 euros.

The following years the situation of labor-intensive enterprises is getting worse. In the last column is marked the Equal tax and its impact to all of the above times the amount of enterprise.

Table ”The share of exports to society” is in the same way compared the assets of society, but now without the impact of VAT. The tables shows, that the laws and the strong level of investment will not bring the desired results for the society, not even in the long term. What is particularly in a very visible when the trend can be view basis of the example calculations, from 1988 to the present day.

Manual labor industries, such as shipbuilding, clothing, woodworking and other related trades workers and entrepreneurs have paid and are paying by their dorsal skin, the well-being for the mechanized sectors of industry and for the exports.

Emptying of rural, when people have moved to growth centers, is also one of the side-effects of the current law. In the country traditionally practiced crafts are unprofitable and ended almost entirely. Still in the early 80’s was small joinery businesses and other small businesses galore. Now, not much at all.

Of course, such a change cannot be implemented suddenly, because it would collapse, for example, the reserves of pension companies. The transition time would take even up to ten years.

Reijo Lahdenperä

I recommend next http://reijolahdenpera.com/consolation-organization/

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