Step 4: Tax Reform

Eliminating Personal Taxation

People should keep what they earn. Commercial enterprises should contribute fairly wherever they create value, use a country’s resources or profit from its domestic market.

FuturePlan proposes a framework through which each participating country could replace its complicated taxation system with a simpler National Prosperity Revenue System. Its objective is to progressively eliminate personal income tax, broad consumption taxes and recurring charges for essential public utilities.

This cannot be achieved responsibly overnight. Replacement revenue must first be independently modelled, publicly examined and proven capable of funding healthcare, education, infrastructure, essential utilities and every other necessary public service.

What Would Change for Ordinary People?

As dependable replacement revenue becomes available, FuturePlan proposes progressively abolishing:

• personal income tax on wages, salaries and pensions;
• personal healthcare levies, where they exist, with essential healthcare funded from General Revenue;
• GST, VAT or similar broad consumption taxes on ordinary goods and services;
• personal tax returns for people who are not operating a business;
• residential stamp duties and similar taxes imposed when people buy or move home; and
• residential council rates, with essential local services funded through regional revenue allocations.

Ordinary personal banking, household transfers, gifts and personal use of AB Coin would not be taxed. Commercial activity could not avoid its responsibilities merely by operating through a personal account.

Essential Utilities Funded from General Revenue

Essential utilities should be treated as fundamental public services rather than products sold to the population for profit.

FuturePlan proposes that public authorities be responsible for generating, providing and maintaining essential services funded from General Revenue, including:

• electricity;
• household water;
• sewage and wastewater treatment;
• essential drainage services;
• basic household waste collection; and
• other essential services approved through the public budget process.

Ordinary households would not receive recurring bills for these essential services. Public utility authorities would publish their budgets, operating costs, infrastructure plans and performance results. This would ensure that publicly funded services remain efficient and accountable.

Connecting New Properties

Where utility infrastructure already reaches a property, an ordinary connection should normally form part of the public service.

Where a new development or remote property requires infrastructure to be extended or specially installed, a modest once-only connection contribution could be requested. It would:

• reflect only the reasonable cost of extending and connecting the infrastructure;
• be published and independently reviewable;
• never become a source of continuing government profit;
• allow payment over time where necessary;
• include hardship protection; and
• avoid unfairly penalising people in rural and remote communities because of their location.

Property developers could be required to meet reasonable infrastructure costs created specifically by a new commercial development. Once paid, those costs must not be imposed repeatedly on future property owners.

Responsible Use of Public Utilities

Publicly funded services do not mean that scarce resources can be wasted. Normal household requirements would be supplied without charge, but reasonable conservation standards could apply during droughts, emergencies or periods of serious supply shortage.

Large industrial users consuming exceptional amounts of electricity, water or other scarce resources could be required to contribute to the additional infrastructure and environmental costs they create. This would be a commercial infrastructure contribution, not a household utility bill.

Why We Should Not Tax Every Bank Transfer

FuturePlan originally considered imposing a small tax whenever a business moved money through the banking system. Further examination reveals that taxing every transfer could impose a contribution repeatedly on the same product as it moves through the supply chain.

A manufacturer might sell an item to a wholesaler, who sells it to a retailer, who then sells it to the public. Taxing every complete payment would repeatedly tax value already contained in the item.

It would also favour large, vertically integrated corporations. A corporation manufacturing, distributing and selling within the same corporate group could make fewer taxable transfers than several independent domestic businesses performing the same work.

FuturePlan therefore rejects a general tax on every movement of business money.

The National Business Contribution

The proposed replacement would be called the National Business Contribution. It would apply to properly calculated commercial profit supported by verified business transaction records.

A payment received by a company is not necessarily profit. It may need to cover raw materials, wages, machinery, premises, transport, insurance, research, maintenance and other legitimate expenses.

A bank can recognise that a commercial payment occurred, but it cannot determine the final profit from that payment at the moment it arrives. The new system would therefore combine automatic transaction classification with a simple periodic reconciliation.

Automatic Commercial Records

Registered commercial bank accounts and commercial AB Coin wallets would classify transactions into a small number of categories:

• business income;
• verified business purchases;
• wages and employment costs;
• productive investment;
• loans and finance;
• internal transfers;
• customer refunds;
• capital contributed by owners; and
• distributions leaving the business.

The software would maintain most records automatically. Businesses would remain responsible for checking their classifications, but the present burden of complicated reporting could be greatly reduced.

Calculating the Contribution

At an agreed interval, the system would calculate:

Commercial receipts minus recognised business costs equals the business contribution base.

The approved contribution rate would apply only to that properly calculated base. Rates, thresholds, deductions and protections for small or low-margin businesses would be determined only after independent modelling and public examination.

A small provisional amount could be reserved when qualifying commercial revenue is received. Following automatic reconciliation, any excess would be returned or credited to the business. Small businesses could instead contribute after periodic reconciliation so their operating cash flow was not unnecessarily restricted.

Preventing Double-Dipping with Contribution Passports

Every recognised commercial sale would carry a secure electronic record called a Contribution Passport.

The passport would travel with the commercial invoice, banking reference or AB Coin transaction. It would record only the information needed to confirm:

• the unique commercial transaction;
• the amount paid;
• whether the payment represented business income or a recognised business input;
• whether associated value had already been recognised by the contribution system; and
• whether an exemption or special treatment applied.

The money collected would be transmitted directly to General Revenue. The Contribution Passport would not pass tax money from one company to another. It would provide evidence that an amount had already been recognised so that it could not be treated repeatedly as newly created value.

A Simple Supply-Chain Example

Suppose a manufacturer sells an item to a wholesaler. The wholesaler then sells it to a retailer, and the retailer sells it to the public.

1. The manufacturer’s verified material and operating costs are recognised before its contribution is calculated.
2. The wholesaler receives a Contribution Passport confirming the amount already paid to the manufacturer as a business input.
3. The wholesaler contributes only on its own properly calculated commercial result.
4. The retailer receives corresponding recognition for its payment to the wholesaler.
5. The same underlying value cannot be taxed repeatedly at its full amount as the item moves down the supply chain.

This protects independent manufacturers, transport companies, wholesalers and retailers from being penalised merely because several domestic businesses participate in producing and delivering a product.

Transactions That Are Not Business Income

The following would not become liable merely because money moved through a bank or AB Coin wallet:

• transfers between accounts belonging to the same business;
• genuine loan principal;
• capital invested by owners;
• customer refunds;
• government remittances;
• client trust money;
• charitable funds held for another party;
• movement between a business bank account and the same business’s AB Coin wallet; and
• other transfers that do not represent earned business revenue.

Commercial income received through cash, barter, foreign currency, cryptocurrency or an overseas payment provider would still enter the business contribution record. Otherwise, honest businesses using the recognised domestic payment system would be unfairly disadvantaged.

Protecting Small and Productive Businesses

The National Business Contribution must not suppress the productive businesses a country needs to build its future. The final system should include:

• a meaningful entry threshold for microbusinesses;
• start-up protections during the early development period;
• fair treatment for genuinely low-margin businesses;
• recognition of legitimate productive expenditure;
• simple correction procedures for genuine mistakes; and
• strong penalties for deliberate commercial concealment and fraud.

Temporary contribution credits could encourage verified investment in:

• domestic apprenticeships and skilled employment;
• new domestic manufacturing capacity;
• regional industries;
• research commercialised within the participating country;
• productive machinery and technology;
• nationally important food, medicine and energy capacity; and
• locally owned intellectual property.

All incentives would be published, independently audited and limited in duration. They must not become secret agreements or permanent subsidies for politically connected corporations.

Foreign Companies Must Contribute Fairly

A foreign company earning substantial revenue from a country’s customers should contribute fairly in that country even if it has no conventional shopfront or taxable headquarters there.

A National Market Access Contribution could apply above a reasonable threshold to domestic revenue earned by:

• international online retailers;
• digital advertising and social-media platforms;
• streaming and subscription services;
• online marketplaces;
• foreign software and cloud-service providers; and
• multinational companies selling remotely into the participating country.

Foreign investment that builds domestic industries, creates employment and transfers useful knowledge would remain welcome. However, access to a country’s customers, infrastructure and resources should not provide overseas corporations with untaxed financial benefits unavailable to domestic businesses.

Preventing Artificial Offshore Profit Transfers

Appropriate withholding contributions and anti-avoidance rules could apply where domestically earned income is transferred overseas through artificially inflated:

• related-company interest payments;
• intellectual-property royalties;
• management fees;
• consultancy charges;
• service charges; or
• manipulated transfer prices.

Legitimate international payments and genuine returns on productive foreign investment would remain permitted. The objective is to prevent artificial extraction, not to isolate participating countries from useful international trade and investment.

A Fair Public Return from National Resources

Every country’s minerals, energy resources, water, fisheries and other natural assets form part of its shared national inheritance.

Companies receiving permission to exploit scarce national resources could be required to provide:

• transparent resource royalties;
• licence and extraction fees;
• environmental restoration contributions;
• rehabilitation bonds paid before extraction begins; and
• an additional national prosperity contribution when publicly owned resources produce exceptionally high profits.

Businesses must be able to recover legitimate costs and earn a reasonable return. However, the public should receive a fair share when its national resources produce profits beyond that normal return.

Resource agreements, royalty concessions and special exemptions should be publicly available except where narrowly defined commercial confidentiality genuinely applies.

National Access, Licence and Environmental Contributions

Commercial organisations receiving valuable or exclusive public rights should pay fair value for them. This could include access to:

• radio-frequency spectrum;
• mining and exploration rights;
• commercial water entitlements;
• ports and airports;
• major public infrastructure;
• exclusive development rights; and
• publicly created commercial monopolies.

Idle licences and undeveloped concessions could attract escalating charges. This would discourage corporations from acquiring national assets merely to prevent others from using them.

A business creating pollution, depletion or substantial public clean-up costs would be required to meet those costs. Environmental contributions and rehabilitation bonds would be reserved for prevention, restoration and affected communities rather than treated as ordinary government income.

Strategic Tariffs and Border Protection

FuturePlan does not propose indiscriminate tariffs on every imported product. Blanket tariffs could increase the cost of household necessities and components needed by domestic manufacturers.

Instead, targeted and independently reviewed border measures could include:

• anti-dumping duties where foreign goods are sold below a fair commercial value;
• countervailing measures against heavily subsidised foreign production;
• environmental border adjustments where imported products avoid standards imposed on domestic producers;
• temporary protection for industries essential to defence, food, medicine, energy or national resilience; and
• emergency measures where vital domestic production is at risk.

Essential medicines, machinery and necessary inputs unavailable domestically would normally be exempt. Every protective measure would have defined objectives, a public review date and an expiry date.

Protection should help domestic industries become productive and competitive. It must not become a permanent reward for inefficiency or political influence.

National Investment and Public Enterprise Income

Government should not rely entirely on compulsory business contributions. Additional national income could come from:

• dividends from responsibly managed public enterprises;
• infrastructure access income;
• the public share of resource-development partnerships;
• returns from national intellectual property;
• commercial payment and settlement services associated with AB Coin; and
• carefully governed investment in strategically important domestic industries.

A share of resource and public-enterprise revenue could be placed in a National Prosperity Fund. Its capital would be protected and independently audited. Its earnings could help fund essential public services and, when economically sustainable, citizen prosperity distributions.

Funding Regional and Local Government

General Revenue would be distributed to regional governments according to a transparent formula that considers:

• population;
• remoteness and the cost of delivering services;
• age, health and disability requirements;
• social and economic disadvantage;
• the condition of essential infrastructure;
• emergency and environmental risks; and
• regional capacity to generate revenue.

Regional governments would publish their proposed budgets, contracts, actual expenditure and performance results.

FuturePlan rejects “spend it or lose it” budgeting. Forcing a region to surrender every unspent dollar at the end of the year encourages wasteful spending.

Regions could retain authorised reserves for emergencies, maintenance, future infrastructure and multi-year projects. Unexpected surpluses beyond approved reserve limits could return to the national fund.

Independent Administration and Public Oversight

An independent National Revenue and Prosperity Authority would administer the system. Banks and AB Coin payment providers would act only as regulated processing agents. They would not determine contribution policy or control General Revenue.

The system would require:

• published collection rules;
• transparent government budgets and contracts;
• continuous independent auditing;
• public registers of corporate concessions and subsidies;
• strong whistleblower protection;
• penalties for deliberate commercial concealment;
• a fair review process for errors and disputed decisions; and
• citizen oversight through the democratic processes described in Step 1.

Automation could reduce some opportunities for evasion, but automation alone cannot eliminate corruption. Administrators, exemptions, computer systems and audit records must all remain subject to independent scrutiny.

Protecting Financial and Democratic Privacy

The National Revenue and Prosperity Authority would receive only the information reasonably needed to establish commercial liability and prevent duplicate collection.

It would not need to know what an ordinary person purchased or how that person voted. Personal banking records, commercial contribution records, AB Coin accounts and democratic voting records must be legally and technically separated.

Payment administrators must never have access to a person’s ballot, political opinions or participation history.

A Safe and Open Transition

Stage 1 — Public Modelling

An independent commission would calculate the revenue that must be replaced and examine the effects of the proposed system on prices, wages, investment, industries, governments and international trade. Its data, assumptions and alternative findings would be published.

Stage 2 — Shadow Accounting

Participating businesses would calculate what they would have contributed under the proposed system without immediately replacing their existing obligations. This would reveal weaknesses, unfair effects and possible avoidance strategies before they caused national harm.

Stage 3 — Limited Replacement

Personal taxes would be reduced progressively only as independently audited replacement revenue became stable and dependable. Every new contribution should be introduced together with the existing tax it replaces.

Government must not be permitted to retain the old taxes permanently while adding new ones.

Stage 4 — Public Approval

The completed system, its safeguards and transition timetable would be presented for public debate and approval. Any required constitutional changes would follow the constitutional congress and binding referendum process described in Step 3.

Honest Limitations That Must Be Considered

1. Corporate costs can influence prices: A company may try to recover some of its contribution through its prices. Competition, the removal of GST and personal taxes, efficient public utilities and careful contribution rates would help reduce this pressure, but it cannot honestly be claimed that corporate costs never affect consumers.
2. Profit is not visible in a single transfer: A commercial payment records revenue, not necessarily profit. Automated records can reduce paperwork, but reconciliation is still needed before the final contribution is known.
3. Double-dipping must be prevented: Contribution Passports would recognise verified business inputs so the same economic value could not be taxed repeatedly through the supply chain.
4. Public utilities still have real costs: Removing household bills does not make electricity, water or sewage systems costless. Their authorities must be efficiently managed, openly budgeted and independently audited.
5. Scarce resources must be protected: No household should be denied essential services because it cannot pay. However, drought, supply shortages and exceptional industrial consumption require responsible conservation and planning.
6. Resource income can fluctuate: Resource revenue alone cannot safely fund permanent public commitments. Each participating country would require a properly managed National Stability Reserve.
7. No contribution rate can yet be promised: The rate depends on national expenditure, the final contribution base and independently verified economic modelling.

The FuturePlan Promise

FuturePlan proposes that people keep their wages, salaries and pensions without personal taxation and receive essential electricity, water and sewage services without recurring household bills.

Commercial enterprises would make a fair National Business Contribution based on the profits they generate through economic activity in each participating country. Contribution Passports would recognise legitimate business inputs and prevent the same value from being taxed repeatedly as products and services move through the supply chain.

The system would be independently modelled, publicly debated and introduced in stages. Personal taxes would be removed as replacement revenue became proven, stable and sufficient.

This is how any country can begin building a system in which people keep what they earn, productive enterprise is encouraged, foreign corporations contribute fairly and national wealth is used for the benefit of everyone.

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