5. TIMISTIC ANALYSIS
America, as is true of any nation, is a system of production. The common denominator to all goods and services is time. The basic, often overlooked, rationale for working is to produce the goods and services that will extend our time as living beings. Each product of our work time can be quantified and qualified as to how it affects our total time as living beings. Food is easily quantified; its time value is positive. Less clear is the true value of designer jeans and other artificial desires.
Each good or service can be quantified and qualified in time. The measurements are not only the amount of survival time but also the time required to produce it. If the production time of a product outweighs its survival worth then it is a losing proposition. Each good or service has two human time measurements: the time cost to produce and the time benefit for human survival.
A nations can be analyzed according to how much time it spends on production and how much time is produced. At one extreme is the highly efficient country in which each hour of work or production time yields products that are worth many hours of survival time. At the other extreme is the country that has makeshift work for the unemployed or private and public bureaucracies which push paper during uncounted work hours. Unfortunately, America's place in this spectrum is all too clear.
For a simple time comparison between production costs and survival benefits, consider a hermit farmer and his production of corn. For the hermit's level of productivity, the amount of time it takes him to produce a bushel of corn can be compared to how long he can live on the corn. For instance, suppose that during a single season he can grow enough corn to feed himself for two years. The cost effectiveness of his lifehours* (time) is an efficiency of two; the hermit produces two units of time for each unit of time that transpires during his cultivation of corn.
This hermit cost analysis is based in lifehours, not workhours. In considering the time cost of producing a product, a better unit of measurement is the lifehour rather than the workhour. In a day, there are always twenty-four lifehours whereas the number of workhours can range from zero to twenty-four.
In assessing a person's productivity per unit of time, how much one produces per lifehour is more important than per workhour. The latter is easily changed, while the lifehour is constant like the biological needs of survival.
Using "workhours" as the unit of measurement can lead to misleading statistics. For instance, how viable is the country whose efficiency per workhour which is twice the world average but whose people work the equivalent of one lifehour per year?
The best measurement of performance for any economic unit is per lifehour*, per day, or per capita. The best economic measurement is not the one used by the necronomists ("per workhour"). In the case of the hermit, his production of corn should be measured in the number of lifehours which transpired during the year against the lifehours which the crop will sustain. It took the hermit one lifeyear to produce enough corn to sustain him for two lifeyears.
Opposite efficient time production is deficient time production. Suppose our hermit took a liking to hummingbird tongues and spent his second growing season eating his stockpiled corn while hunting hummingbirds. His stockpiles of time would dwindle, since the hermit could never catch enough hummingbirds to make a complete meal. This would be an example of deficient production--more time was consumed in the production activity than was produced. Unstopped, deficient worktime would yield one dead hermit.
Suppose one winter he spends his previously idle time carving a plow which will double his production of corn. By investing his time into this time-saving innovation, the hermit will be able to increase the cost effectiveness of his time. The next farming season will allow him to produce twice as much. In this situation, our time-saving, innovative hermit is a pure capitalist, for he has raised production per capita.
Carrying this simple story further, suppose the hermit joins with another to form a family unit and they decide to split the problems of living into two areas so that each hermit can specialize in one area. They would save time when dealing with the recurring natural problems of life: gathering and preparing food, clothing and shelter. By specializing, the efficiency of each increases and both benefit through their cooperation.
Innovations that allow old and new problems to be solved faster are not restricted to mechanical devices. Probably the greatest time-saving devices have involved new forms of human organization that allowed individuals to specialize for a higher levels of productivity thereby increasing efficiency per lifehour.
The family unit is one such organization. Ideally, each person within a family unit specializes and shares the produced wealth with the others. In a sense, each person borrows and repays the others' time. The "logic" of sharing the gathering is a plausible explanation for the origin and viability of not only the family unit but also of larger social, economic units.
Today, humanity suffers from a breakdown in the organization of people's time. The injustices of illogical taxation allow some people to specialize without sharing their additional wealth. The people who benefit most from the system don't pay their fair share to support that system. The social contract that has bound groups of people together is deteriorating under this strain.
A new organizational process or social contract is needed to right the wrongs of current legislation. Central to this new contract is everyone bearing their fair share. Central to the reform is an understanding that a government borrows people's time in the form of taxes, and that politicians should use this time to produce more time than is collected. The productive, efficient use of this collected time is to solve the common, time-wasting problems which individual people cannot or will not solve. Inflation is an index of a people's time being cheapened, stolen or destroyed. Inflation reflects a reduction in the quantity and quality of time being produced per capita. Inflation is most readily measured by the common, intermediate product which not only measures the production of time but is named after time--currency.
Currency developed as a measure what a person's time is currently worth. The ongoing cheapening of a currency measures more than the loss of buying power for the holder of the currency. It measures a cheapening of people's time, individually and nationally. A nation beset by inflation is a nation that is losing time; it is producing less and less time for its people. It is regressing.
This timistic analysis of inflation and America has relevance in understanding the proposed tax reforms. The product transaction tax is nothing more than recognizing how each person's ability to produce his personal wealth of survival time depends on the health of the nation as a whole. For the national process of producing time to be most efficient, everyone must give his fair share of time to fuel the nation. This is analogous to how people in a family unit must put some time into the family if they are to reap its benefits.
What should the citizens expect if they refuse to give time to their national government? They should expect a collapse of the general time producing process of which they are a part and upon which they are dependent. On the other hand, if the people as a whole spent enough time resolving their common, time-wasting problems, they would have more time overall for their personal wealth creation.
Taxes: Loans of Time
A government is a time producer, or should be. The time production role of government can be understood if government is viewed as a borrower of people's time through taxes. If you are paid $5 per hour and I borrow $10 from you, I have borrowed two hours of what you are currently worth. Similarly, if the government taxes you $10 worth of currency, it borrows two hours of your time.
An efficient, productive government will pool all the collected time (taxes) into organizing problem-solving activities for the benefit of the people. The government is efficient if it produces (saves or creates) more time for the people than it collects in the form of taxes. Timistically understood, a government is supposed to tax or borrow some time from each citizen and solve time-wasting problems which the citizens cannot solve on their own. For instance, a citizen cannot individually build a bridge across the Mississippi, no matter how much time it would save him. However, if the government takes a little bit of time from each citizen, it can pool this time into one concerted effort to build the bridge.
The cost of the bridge can be determined on an individual level, indirectly and directly. Indirectly, the individual's cost for the bridge can be determined in some measurement of the existing symbols of time (e.g., dollars). Or, the bridge's cost can be directly assessed in time: How long did the average citizen have to work to pay his share of building the bridge? For cost efficiency analysis, the cost of any public project should be measured in time, not symbols. The reason for using time (hours) is that the symbols of time (currencies) have been gradually divorced from their namesake through the actions of our politicians.
Citizens should analyze the economics of building a bridge, comparing their cost in time the time-savings they will accrue if the bridge is built. If the cost per capita of the bridge equals a day's pay, and if the bridge reduces river-crossing time from thirty-five minutes to five minutes, the average citizen will get his loan of time to the government back in sixteen crossings (16 times 30 minutes savings = one eight-hour day of work). Once built, the average citizen will get his borrowed time back in just over three weeks, assuming everyone has to cross the river each day.
In this case, the bridge and the government have produced (saved or created) time for the citizens. On the other hand, if the government builds things that waste time--do not save or create time for the people from whom time is borrowed--then the people have a deficient government.
The bridge analogy also provides a rationale for a product transaction tax based on existing parallels. The crossing of bridges is sometimes taxed so that people pay their fair share according to their benefit from a larger economic unit. In this case, the larger economic unit is the time-saving bridge. America has numerous bridges and roads that collect tolls to underwrite the cost of maintaining the system. Large trucks pay more in tolls than motorcycles. The federal gasoline tax, used to fund federal highway projects, is a product transaction tax: Each time someone burns a gallon of fuel on a road, he is taxed for using the road. A person who burns a lot of gasoline is taxed more than someone who burns little. In principle, this is fair and pragmatic; the larger gas consumption indicates greater usage (wear and tear) on the road.
People who pay larger tolls (direct or indirect) should not object to the money cost, but many people do complain. Many truckers think they are overcharged for their use of the roads. They run around with stickers that say "This truck paid ___ dollars in road use taxes." Truckers would be ahead today if they had paid a little more to keep the roads in better shape. Today, many truckers have to slow down and waste time because of deteriorating roads. Or, they destroy expensive tires and rigs by driving too fast on rotten roads. These time-losses, so far, are nothing compared to the future time losses, if the roads deteriorate to the point where only a mule can negotiate them.
The roads and bridges of America would not be in bad shape if their total cost had been fairly and pragmatically divided among the population that uses them. However, more than one politician has bought his reelection by passing a law that reduces or exempts special segments from paying their proportional share of public projects. Truckers, for instance, have been allowed to increase their benefits from the highways (higher payloads) without increased taxation. As a result, many public projects show results of insufficient funding. Ironically, and justifiably, the people who suffer the most from a deteriorating public service are the people that benefit the most from them.
Do the chief beneficiaries recognize their privileged and precarious position? No. Truckers, for instance, sometimes defend their avoidance of a fair share of road upkeep by citing how much they carry much of the nation's needs. This is faulty reasoning: they do not consider their worth if the roads are impassable. At the present time, it is cheaper to truck in produce from California than to produce it locally. However, if the roads are impassable, the opposite will be true. At that time, the truckers will not be valuable as carriers of the nation's needs. Similarly, when the politicians have gut and rut the law process to the point of uselessness, their value is also be degraded.
One should never justify his failure to pay his fair share by stating a privileged position, for it is only a matter of time before the underfunded larger economic unit collapses. At that time, the privileged position will be no more. Another example is the medical profession. Doctors think they ought to set high rates and escape taxes; after all, doctors save people's lives. When people can't afford doctors anymore, doctors are expendable ... another mouth competing for limited food supplies.
In summation, and using the truckers as an example, the people who should not avoid paying their fair share are the people who seem the most valuable: they benefit the most from the system. Truckers should not try to escape their fair share, or they will have no income. They need the roads more than the average citizen; a non-trucker can take his leisure at home as well as grow his own produce.
The trucking industry has conceitedly deluded themselves into thinking that their commerce value should exempt them from paying their fair cost of the transportation system. The underfunded, deteriorating highway system lowers the value of the trucking industry as a means to transport products. America did not need truckers as much as truckers needed America, which goes for all of us.
The future of trucking is dead, for movement by highways will be less and less economical as a result of deteriorating highways. The trucking industry must accept the blame for their own demise, for they tried to get something for nothing by having politicians exempt truckers from their fair share. Studies have shown that 40-ton rigs destroy more highway than their tax revenues repair. For their short-term gain (avoiding funding for the highway system), truckers will lose increasing amounts of wealth, far beyond their initial petty savings. Who allowed the truckers to short-change themselves for a fast buck: the misleading politicians who raised limits on tonnage instead of taxes on usage.
If only the truckers and the politicians suffered from their tax avoidance, it wouldn't matter. But we all suffer when any segment engages in self-defeating, short-term gain by not paying their pragmatic share from benefiting from the system. It would be better to tax truckers, doctors, and others than to allow the condition to deteriorate to the point that we don't need them.
Tax avoidance within the trucking industry is an example of "supraflation." Supraflation occurs when an economic entity cheapens the larger, superior whole of which it is a part. Literally, the word means "superior cheapening." People avoid their pragmatic share of funding government in pursuit of increased short-term income. This additional, short-term wealth does not reflect more efficient production; it reflects an avoidance of paying one's fair share for supporting and benefiting from the superior whole. The inescapable result is the loss of one's long-term wealth, for the whole has been cancerously consumed and neglected by the dependent parts.
If one does not pay his fair share for economic stability, he should not expect economic stability to last. When others are forced to pay more than their fair share, it is only a matter of time before they run out of disposable income and stop funding economic stability altogether. An example of the latter is how the average, overtaxed citizen has stopped traveling. This reduced road use by the lightest beneficiaries has cut the tax revenues for highway projects. The average citizen was overfunding the highways relative to his benefits and need; he stopped using the thing when the price exceeded his relative benefits.
The benefits of a well-maintained highway are most often a point of leisure to the average citizen. The livelihood of truckers, on the other hand, is totally dependent on the highways. Their efforts to increase their annual wealth by increased tonnage without a corresponding and justified exponential increase in taxes is merely destroying the concrete lifelines on which their jobs depend. For a limited period of time, they'll make a few more bucks on each run. Thereafter, they'll lose money on each run because they'll have to travel slower. Finally, they will have no jobs at all. (Maybe they'll become teamsters once again, in fact, as well as in name.)
Anytime someone avoids his fair share cost of funding the larger economic units of which he is a part, he is cutting his own throat. His short-term savings, best measured in the time which the currency symbolizes, will be lost when economic deterioration or instability requires him to take more time to produce the same product (hauling something between two points) or requires him to give up all his worktime (unemployment). As cancer weakens the body, our supraflatic lifestyles are undermining America's economic health.
Fair Share: Indirect and Direct
The people of a nation can give their fair share for economic stability in one of two ways: indirectly or directly. The proposed product transaction tax represents a fair means taxing each person according to the benefits they receive from the larger economic whole. Through a product transaction tax, each person's time is indirectly taxed by the collection of the current symbols of production time (currency). In this manner, the larger economic units, upon which each person is dependent, will be funded.
The tax rate on product transactions can be consistently reduced if a government also levies a direct tax on a people's time to solve or prevent their common problems. The proposed NUSA agencies will tax each American fairly and equally. While the doctor's time may be more valuable in dollars than the unskilled teenager, the doctor has much more to lose than the teenager if he does not give a fair share to economic stability. Thus, if both are directly taxed 104 hours a year, they will both be giving their fair share to economic stability in reflection of how they individually benefit.
An enlightened government will recognize that the best way to tax people is the direct mode of taxation. Recall that taxes are raised to solve or prevent problems that people cannot or will not solve themselves. It will cost fewer hours (dollars) if politicians democratically organize the people to solve their problems directly than if a government relies on indirect taxation through currency.
If a government tries to solve problems relying solely on currency taxation, much time will be wasted using the currency to train professional regulators. Doesn't it seem wasteful to train people in problem knowledge that already exists in the problem-suffering people? This waste is typified in the stereotypical bleeding-heart liberal from a comfortable background who gets a degree in social work, can't stomach the reality of social problems, gets a job selling stocks (e.g., Jerry Rubin). Would it not be more cost-efficient to organize the people who have primary knowledge of the problems? Restated, problems can be solved more effectively and at a lower cost if the people are directly taxed (and organized) rather than trying to organize a professional class of regulators separate from the problem sufferers.
Contrary to certain claims, there is no way that a group of professional regulators can solve problems better those suffering the problems. Proof of this is seen in the confusing, self-contradictory regulations of OSHA. Even worse are the illogical, written legal laws that bear the stamp of not only habitual politicians, but also of the trained law regulators (lawyers). (Two-thirds of all Senators and half of our Congressmen have law backgrounds.) The best way to guarantee that there is sufficient time investment into national government is to expect each person to pay his fair share, ideally through direct taxation.
Taxation Reforms does more than delineate the distinction between indirect and direct taxation. It does more than note the dead-end vicious cycle of solely relying on indirect taxation of people's time: problems are not solved, people lose disposable income because of the inflationary unsolved problems, and tax revenues fall. Taxation Reforms not only points out the need for instituting direct taxation through a National Universal Service Act, but also provides the means by which the reader can join in reducing total taxation. As NUSA grows, the problems will fade, and the need to tax both directly and indirectly will disappear. Unlike the present politicians who offer only greater taxation without re-presentation, Taxation Reform offer a reduction and possible elimination of direct taxation.
Warning: Anyone found stealing lifehours will be forever banned from participation in and rewards of Better Democracy and Capitalism.
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