Chapter 5

The Barber Plan

The only way Congress will Abolish Income Taxes is for the replacement taxation system to be
                              Revenue-Neutral. Revenue-Neutral means that the tax system that replaces the income tax must
                              generate the same amount of tax revenues that the income tax generates. The Philoeconopolist
                              Party has a plan that provides a revenue-neutral Fee On Transfers and/or Apportioned PPR tax
                              instead of a Flat Tax or National Retail Sales Tax (NRST). Flat Tax requires you to file a tax
                              return. The NRST requires you to file a tax return if you claim deductions. No tax return or
                              deductions or exemptions are needed with Fee On Transfers or Apportioned PPR. 

                              I propose to replace the present income tax system our federal government uses with two simple
                              tax methods, 1) a small fee on the money which the Federal Reserve Bank handles for the federal
                              government called the "Fee On Transfers" tax, and 2) a small purchase percentage rate of 1% to
                              15% tax on most goods and services, a smaller tax on the least product price, and a higher tax on
                              luxury items, to be collected from all States according to the population in each State, known as
                              "Apportioned PPR". The two simple taxes are discussed in "The Barber Plan": 


                              Part A - Fee on Transfers

                                   A1. One half of one percent is collected on the FRB's daily
                                       total of funds and securities transfers.

                                   A2. One half of one percent is collected on ALL monetary
                                       transfers except on loans from the government (not
                                       including loans from Government Sponsored Enterprises
                                       (GSEs).  GSEs pay the fees.

                                   A3. One half of one percent is collected on ALL State's
                                       daily Gaming and Lottery monies wagered. 

                                   Part A should do it.  Or at least half of the budget.
                                   If not, then we implement Part B.

                              Part B - Apportioned PPR

                                    B1. The federal government determines fiscal budgeted
                                        tax requirements. 

                                    B2. People and businesses give voluntarily to the State
                                        government anonymously to reduce apportioned tax
                                        requirement to the several States. 

                                        Since there will be no federal income taxation, this
                                        step will offer the underground economy, individuals
                                        and businesses to contribute as much as they desire
                                        to the State to reduce the federal tax liability to
                                        the State. 

                                    B3. The federal tax liability balance is apportioned
                                        among the several States. 

                                        What does Apportioned mean? Both the Constitution
                                        for the united States Of America and The Federalist
                                        Papers discuss apportionment concerning taxation.
                                        Apportionment under The Barber Plan means that the
                                        balance of revenues needed after Social Security,
                                        Unemployment Insurance, Payroll Taxes and donations
                                        have been subtracted from the federal tax requirement
                                        until 2004, are allocated to each State according to
                                        population.  After 2004, apportionment under The
                                        Barber Plan means that the balance of revenues needed
                                        after donations have been subtracted from the federal
                                        tax requirement, are allocated to each State according
                                        to population.

                                        Phase I - Abolish Federal Income Taxes
                                                  Individual and Corporate (1999)

                                        Phase II - Abolish Unemployment and Payroll
                                                   Taxes(2001)

                                        Phase III - Abolish Social Security Taxes (2003)

                                    B4. A Purchase Percentage Rate (PPR) is collected at
                                        the State level. 

                                        What is PPR ?  PPR is Purchase Percentage Rate.
                                        The PPR may be variable and change at a moments
                                        notice. The PPR is taxed on price and not on the
                                        total sale as is currently being done with sales
                                        taxes. The PPR tax is collected until a State has
                                        meet the allocated apportioned amount of revenue
                                        needed from that State. The federal government and
                                        States may collect SURPLUS monies using the PPR
                                        tax method.

                                                     Example PPR Chart

                                              Purchase Price                 %

                                              $.01 - $3                      0
                                              $3.01 - $10                    1
                                              $10.01 - $25                   2
                                              $25.01 - $50                   3
                                              $50.01 - $100                  4
                                              $100.01 - $250                 5
                                              $250.01 - $5,000               6
                                              $5,000.01 - $10,000            7
                                              $10,000.01 - $20,000           8
                                              $20,000.01 - $30,000           9
                                              $30,000.01 - $40,000          10
                                              $40,000.01 - $50,000          11
                                              $50,000.01 - $100,000         12
                                              $100,000.01 - 500,000         13
                                              $500,000.01 - 1,000,000       14
                                              $1,000,000.01 and over        15


                              Don't be misled by the press or any think tank into making you think that The Barber Plan won't
                              work. The Barber Plan will work and the government knows it! The Barber Plan is fair and will
                              help our Country get out of the big economic mess it is currently in. 
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