If no one will work at 100% tax rates, it is essential to run the numbers and understand the ramifications. 

The Laffer Curve: as the tax rate increases, people are less likely to engage in the taxed activity.  A percentage of people will do without, do outside the taxing jurisdiction, do it themselves, or will do it under the table. 

​The higher the rates, the less people will do taxable activity.  

Economics is not a precise science as trillions of factors by billions of people come into play.  While the results need to reach $0 of taxable activity at 100% tax rates, the pathway has a range.  It is essential to realize that wherever you are on the chart, it is the total economy.  Total federal, state, and local government spending to GDP is the best method to determine the tax rate.

These charts use the average loss of GDP line, meaning the loss of 1% of GDP for every percentage of government spending compared to GDP.   I used $20 trillion of GDP at a 40% tax rate.  Real numbers are significantly messy with 2020 and 2021 stimulus bills, Covid lockdowns, massive debt, and inflation.  It is an economic truth that taxable economic activity will decrease an average of $330 billion for every percent of GDP the government spends.  The median earning household would lose $1,000 of gross income for every percent of GDP the government spends

Some conservatives claim that tax credits or income exempted from taxes are just citizens paying fewer taxes.  It is the same as government spending; however, just using the tax code.  If citizens determine that we should pay for government services as a percentage of our incomes, then all tax cuts need to be by rate reductions.  If the government collects $10 and credits $2, it has $8 for government services. This is the same as the government collecting $10 and spending $2 on a UBI and having the same $8 on government services.    

The ‘B” in UBI stands for basic, meaning taking care of the basic necessity of life.  Therefore, earning an income would be motivated by wants and not needs.  The income in the charts in this blog would decrease much more rapidly as tax rates increase.    
GDP does not change overnight.  A 5% growth rate/year for 5 years compared to a 1% is a 20% GDP difference. 
Inflation and other factors keep all the numbers messy!

Suppose that a company employed 100 people at $40 an hour and at 30 hours a week.  The company gained additional business and asked everyone for more hours.  Every employee would evaluate whether working extra hours was worth the hassle of work and fewer leisure hours.  Income after taxes would be a considerable factor.  A 25% tax rate means a $30 take-home per hour.  A 50% tax rate indicates a $20 take-home per hour.  A 75% tax rate means a $10 take-home per hour.  A 99% tax rate means a $0.40 take-home per hour.  No one would work extra hours if they did not receive additional after-tax income.  On average, one employee will decline extra hours per 1% increase in tax rates.             

10% might be the lowest spending to GDP that a society can achieve.  Roughly 5% for national defense and about 5% for the rule of law.  This will require that the citizens take care of helping the poor through charity and achieve private education.  Citizens would be required to save for their own retirement and move to private roads. 
As the chart clearly shows, the $30,000 deduction reduces tax collections by $260 billion, and the tax credit leaves the government only $740 billion or 2.5% of GDP for the military and the rule of law.

Increasing tax rates from 10% to 20% losses $3.33 trillion in GDP.  Household take-home income loses that $3.33 trillion plus $2.3 trillion in additional taxes.  The government achieves $5.33 trillion compared to $3 Trillion at a flat 10% tax rate.  That additional $2.33 trillion came at a high cost.      
The $30,000 deduction costs $500 billion, and the tax credit costs $2 trillion.  That $2.5 trillion loss brings total tax collection down to $2.83 trillion, which is lower than the 10% flat tax.   

Increasing tax rates from 20% to 30% losses $3.33 trillion in GDP or $6.6 trillion from the 10% tax rate chart.  The government does gain $1.66 trillion in additional tax revenue from the 20% chart and $4 trillion from the 10% chart.  That is a heavy price just to achieve additional government control.
The flat tax achieves $7 trillion.  The $30,000 deduction costs $750 billion, and the tax credit costs $2 trillion, leaving $4.25 trillion for government services.

The flat tax achieves $8 trillion.  The $30,000 deduction costs $1 trillion, and the tax credit costs $2 trillion, leaving $5 trillion for government services.
Note: government could have $0.33 T more tax revenue and a 33% higher average income with a 20% flat tax.

​Increasing tax rates from 40% to 50% losses an additional $3.33 trillion in GDP or $13.3 trillion from the 10% tax rate chart.  The government does gain $0.33 trillion in additional tax revenue from the 40% flat tax chart and $5.3 trillion from the 10% chart.  This is an absurd trade-off. 
The flat tax achieves $8.3 trillion.  The $30,000 deduction costs $1.21 trillion, and the tax credit costs $2 trillion, leaving $5.12 trillion for government services.
Note: government could have $0.21 T more tax revenue and a 60% higher average income with a 20% flat tax.

​Increasing tax rates from 50% to 60% losses an additional $3.33 trillion in GDP from $16.67 T to $13.33 T.  The government does NOT gain rather losses $0.33 trillion of tax revenue from the 50% flat tax.  This is sliding down the bad side of the Laffer Curve with Zero upsides. 
The flat tax achieves $8 trillion.  The $30,000 deduction costs $1.4 trillion, and the tax credit costs $2 trillion, leaving $4.6 trillion for government services.
Note: the government could have that same $4.6 Trillion with a flat tax rate of roughly 17%.  Average income would be a little more than doubled, with the median household going from about $53 K to $110 K.  

​How many people will work past the basic necessities of life with a 70% tax rate?  How many would-be great business owners will not work 80 hours a week to create jobs and produce goods and services just to have 70% taken by the government.  Business owners will seek out friendlier business jurisdictions.  Many will do without and enjoy more leisure hours.  Others will risk tax evasion by doing under-the-table work.  Everyone will consider creating their own garden and doing more do-it-yourself projects.  

Before one claims that GDP will not get this low with 80% tax rates, I challenge everyone to draw a taxable GDP line where the line ends with zero taxable economic activity at 100% tax rates.  The government might force or coerce people to work with punishments, reduced benefits, better work conditions, or a host of other non-income-related persuasions.  The 13th Amendment will become relevant at these high tax rates.    
At these rates, the government can not adequately fund the military or rule-of-law, much less take care of the poor or education.

​Many people will learn to get by with the $20,000 UBI style refundable tax credit, which will ruin their lives by taking away a significant portion of their self-esteem.  The richest people will control everyone because they are funding them.  The only way this works is with a flat tax which means someone earning at the 80% bracket would earn $83,330 and pay $75,000 in taxes, thus living on $8,330.  This tax rate is a breeding ground for corruption and crime.
It is a good time to review these numbers with the other charts and ask, is this an economy in which you want to live.            

​What would the economy look like if the government allowed everyone to earn up to $30,000 tax-free and impose a 100% tax rate for all income over $30,000?  It is hard to determine, but the government would not have funds for government services because no one would earn more than $30,000.   A UBI would not be possible unless we just monetize those funds and totally destroy the value of the currency, which is a significant tax.  I speculated with numbers on the chart. 

Relevant Blogs:

Universal Basic Income and the Laffer Curve

The Universal Basic Income: Issues to Consider

Haley2024’s Top Tax Principals

High Progressive Tax Rates Bans the Rich from Serving the Poor

There Are Four Ways to Pay for Government Services

Why People do not Work all 168 hours a Week

All Taxes Harm the Poor the Most

Deductions, Exemptions and Credits create a faster loss of economic activity

Modern Monetary Theory Is Insane

The Poor are Harmed the most by the Effects of the Laffer Curve

​Why Tax Deductions, Exemptions, and Credits Are Bad Economics

The Value of Your Labor versus the Value of Your Leisure

Spending as a Tax

The Inflation Tax's Laffer Curve

Taxing the World’s Supply of Consumer Goods
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​The Flip Side of Income Inequality is the Inequality of Serving Your Fellow Man

Look at all the Haley2024 reforms that reduce government responsibilities.

​First, this benefit is heavily weighted to the rich.  Second, the government spending money through the tax code is a bad idea.  Third, this would require the government to hand out newly printed dollars to pay for these vacations.  Forth, the government paying for rich people to take a vacation is not listed in the US Constitution as a responsibility of the federal government.  Finally, the government has no business paying for its citizens’ entertainment.       

Roughly 43% of the citizens with the lowest income (Taxpolicycenter.org) pay no federal income taxes; thus, they are ineligible for the taxpayer funded vacation.  People with a tax liability greater than zero, but less than the maximum credit will have taxpayers pay for a less expensive vacation.  Roughly, the wealthiest 30% of Americans will be eligible for the maximum taxpayer funded vacation.  This gives evidence to the Left’s normally fact-free claim that the Right only cares about the rich.  This is a left-wing plan.  

​Americans with a tax liability would maximize their tax credit by going by Uber to a restaurant and lodging over 50 miles away from their residence until their tax liability is zero or the tax credit is maximized.  This tax credit has the potential to spend roughly 10% of the federal budget on personal vacations for the wealthiest half of Americans.  It could cost as much as 50% of military spending.  

​Tax credits have the same real effects as government expenditures.  The arguments regarding tax credits allowing people to keep more of their own money or giving money back to the taxpayers are short-sighted.  We pay taxes by tax rates, not a head tax.  Tax rate cuts are the only legitimate tax cuts from tax rates.  Straight dollar tax cuts across the board are only valid for head taxes.       

Tax credits have the precise outcome as straight government expenditures.  If the government collects $2 trillion in taxes from tax rates and then spends $1 trillion on vacations, they are left with $1 trillion to spend on legitimate government functions.  If the government gave $1 trillion in tax credits from the $2 trillion collected from tax rates, Congress has $1 trillion for legitimate government functions.  

​If the government only needed $1 trillion for appropriate government functions, their best option is to cut the tax rate in half and collect the $1 trillion.  The lower tax rates decrease the natural disincentive of doing a taxed transaction, thus growing the tax base, and allowing for even slightly lower tax rates.  

​Given the current situation in 2020, where we have a $3.5-$5 trillion deficit, with a significant percentage of that simply monetized, this tax credit will be paid for with new dollars.  There is not any expectation that these dollars will be pulled back out of the monetary system.  The worth of these dollars ultimately comes from depleting a portion of consumable goods.   

​The federal government in 2020 is collecting less than 50% of its spending in taxes.  Borrowing is minimal.  The Federal Reserve is printing up new dollars underived from worth, to give almost all citizens money, not tied to providing government services.  Often, the 2020 stimulus money is directly paying people not to work, such as the paycheck protection plan and the significant increase in unemployment funding.

This new vacation spending would be 100% additional and 100% from new money.  This much new money will devalue the currency, creating an inflation tax.  The inflation tax harms the poor and those on a fixed income.  Inflation generally reduces savings.  Savings is capital, and capitalism requires capital to thrive.  

​Currency is a service, not a product.  Free enterprise provides services far better than a government monopoly.  Currency is a service from free enterprise’s invisible hand keeping a ledger that facilitates one-sided provision, yet two-party trades at different times, at different values, and the services provided going to and from the universe of all traders in proportion to each person’s provision. 

​New dollars underived from worth, directly reduces the volume of consumable goods in society.  The key here is these new dollars are traded into the market without the vital necessity of trading worth for worth.  One trillion new dollars underived from worth always starts by consuming $1 trillion of the consumable stock.  Devalued currency will surely follow.    

​Spending money through the tax code does not make the spending constitutional.  If the government cannot constitutionally spend the money through regular appropriations, they are not permitted to spend it through the tax code.  The powers of Congress, written in US Constitution Article 1 Section 8, lists what Congress can do.  Paying for rich people’s vacation was left off that list.  

On that list, however, is the power to regulate and fix the standard for our currency.  The constitution also calls for the Congress to provide punishments for counterfeiting the US currency.  Given that every dollar needed for this tax credit needs to be monetized, thus profoundly fluctuating the value of our currency, this bill violates the constitution.  Given that this bill requires roughly $400 billion of effectively counterfeiting by the Federal Reserve, it would be hard to see how Congress can pass a law that effectively counterfeits. 

There are two significant elements of this type of tax.  First, the government, through the Federal Reserve, needs to create new dollars that are not derived from worth.  Second, the government needs to give out those dollars without attaining government services.  While these two elements were around in the past, in 2020, they have jumped from under 1% to over 20% of GDP.
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Typical government taxes and spending programs act like society forcing people to purchase public-good items through government control.  Taxing yields money earned by individuals providing worth.  Those funds benefit all citizens.    

​The level of monetization has fluctuated in the low single digits for over a hundred years.  Taxes and borrowing have paid for the vast percentage of government spending with only a few exceptions.  In 2020, the Federal Reserve is likely to create new dollars for well over half of government spending.  The increase in money used for loans is not included here because the real worth of houses, cars, and capital goods are adding real value to the economy.  

​Trillions of dollars are being thrown around like never before, and proper reporting is slow to hit official numbers.  More serious proposals are swirling in Washington DC.  $3 trillion to $5 trillion is likely to be monetized in 2020.  This is an increase from under 5% of GDP to possibly over 30% of GDP.   The federal government spent about $2 trillion more than it collected in tax revenue from April 1st to June 30th, 2020.  There is not any expectation, plan, or ability to pull these dollars back out of the system or tax the American people with the tax code, to reverse these actions.   

​In the past, the vast percentage of government spending was used to pay for typical government services such as police, military, roads, and taking care of the poor.  In 2020, that has changed.  Social Security and Medicare taxes and benefits act like forced retirement savings and should be excluded from this argument.  Welfare benefits should also be set aside for now because it is focused on helping a small percentage of impoverished citizens.  This case is focused on the significant increase in government spending that does not attain government services.    

In the last few months, about 25% of employees lost their jobs and were paid unemployment benefits.  The stimulus bill gave extra money to make most unemployment checks more than their previous company checks for working.  Many people who kept their jobs worked 40 hours and were paid less than the laid-off employee.  Many companies paid their unworking employees with PPP forgivable loans from the government; thus, the government was paying people not to work.  There were $1,200 per person checks to most people in exchange for zero government services.  More of the same is proposed on an ongoing basis.  

Currency must transfer wealth to properly function.  Creating dollars from thin air violates the integral element of transferring wealth.  Sound money must start with wealth creation.  When these new dollars enter the market without providing worth into the market, they just pull products off the shelves.  There is X trillion dollars’ worth of consumable goods.  $3 trillion of new money will buy $3 trillion of the supply of consumable products, leaving $3 trillion fewer holdings.   

​New money is only certificates of theft the first time they enter the market.  After that, the dollar trades wealth for wealth, meaning someone must add products and services into the system before they can take items off the shelves.  The new US Dollars can buy products off almost any shelf in the world.  The loss in value of the reduced consumer goods stock is spread across the world economy by the inflation tax.  

​ Many people will make the point that this extra money from thin air will create a demand and will yield more employment.  If there was a three-man economy and two of the men made products and sold what they made, and the third man just created new money from thin air, would it be just?  The third man could claim that his new money was creating employment for the other two.  Two men produced six products each, and all three men took home four products.  The two producers of the products are not happy that the third man gave them more work to do without adding products to the economy.  

Demand is always present.  Peoples’ willingness to work more labor hours to attain their demand is the main question.  200 years ago, people had a desire for most of the items enjoyed by the poor of today; however, most of their work hours were needed on the farm just to eat.  

Writing this on August 8th, 2020, roughly $3 trillion has already been printed and freely dropped by helicopters over the vast percentage of households.  Serious additional proposals range from $1 trillion to $3 trillion to finish out the year.  $1 trillion is roughly 20% of quarterly GDP and represents approximately $9,000 per US household.  The so-called stimulus bill, along with strong-handed regulations by politicians, has depressed our economy by 33% in the second quarter of 2020.  

​America has lost one-third of its economy, as demonstrated by the second quarter GDP plunge of 33%.  Certainly, oppressive government regulations are part of the issue; however, creating new dollars and paying people not to work at a pace of over a third of GDP is a tremendous suppression of our economy.  

Often, devaluation is hidden for a time.  The realization of the depreciation can suddenly appear.  Indeed, the losses were slowly accumulating for years, but the recognition of the reduced worth is sudden.  Is the Federal Reserve open about their books?  There has been a significant ‘audit the Fed’ push since the 2008 great recession that has not happened.  This current crisis is about 5 months old, and many official numbers are only revealed months and sometimes years later.  The economy is very cloudy when the Federal Reserve allowed $500 billion in loans to big banks to be turned into about $4 trillion of mortgages, car loans, among other real investments.  

How much worth do people think they own in their investments that are also owned by others?  How much wealth is strictly paper without inherent value?  Recently, Bernie Madoff and 100 years ago, Charles Ponzi, hid the devaluation of their investments to keep the new money coming in.  They paid out large profits to old investors from the new money coming in.  The investments appeared amazing until the devaluation was exposed.  The Federal Reserve uses its monopoly power over money, with laws requiring acceptance of the US Dollar to do business in America.  Ponzi and Madoff never had that monopoly power.       

​Complaining about the rich, making too much money, is complaining that the rich are serving their fellow man too much.  The pie is not a fixed size.  The rich serving more people does not limit others from adding their services to the universe of producers.  The two-sided agreed-upon supply of services and the demand for services always match.  Every person can offer their money to a rich, poor, or middle-class, provider of services.  Most consumers generally look to receive the best service for the least amount of payment, regardless of the provider's wealth status. 

​Making an income of $1 million, means you served others enough for those others to turn over $1 million to you.  If you made $40,000, you served your fellow man sufficient for them to turn over $40,000 to you.  Yes, the person making $1 million served their fellow men and women 25-times more than the person making $40,000.  The service amount, quality, and usefulness are defined by the people providing the service and the people receiving the service in a double-sided agreement of service for income.

In the free enterprise system, every person is allowed to offer their services to the universe of consumers.  Every consumer is entitled to choose who will serve them from the universe of provided services.  The 'free' in the free enterprise system means that every trade of services for the income must be freely entered into by the provider and consumers of services.  I will use services for products, services, and other items of worth because all things of worth are derived from labor services.   

​The person with a high income serves their fellow man more than a poor person does, as defined by the consumers of those services.  In fact, they provide services in direct proportion to their income.  A person making $500,000 serves their fellow man ten times more than a person making $50,000.  A person making $5 million serves their fellow man 200 times more than a person making $25,000. 

I would be willing to sell my singing talents for 1% of the money Taylor Swift charges, and still, nobody would turn over their money.  This shows that everyone determines what services they pay for.  The board of directors of a billion-dollar corporation could save a lot of money by asking anyone of their thousands of front-line employees to be CEO at 5% of the typical CEO compensation; however, the corporation could lose ten times the CEO salary per inexperienced decision.         

Let us examine how the rich become rich.  Why do people give rich people more money than people give poor people?  The simple answer is because the rich offered better services at a lower cost compared to the poor.  The rich work more hours, reduce waste, increase effectiveness and productivity.  The rich explore the well-paid opportunities to serve.  The rich spend years of uncompensated work learning, and in fact, spending money to be taught.  Most rich people have an attitude of taking responsibility, a mentality of solving problems, and a wholesome mindset of their role in serving the end consumer. 

Often, a wealthy person finds a way to do high-quality work once and inexpensively copy that product or services by the millions.  Singers spend millions to create one album and release it for millions to download.  Sports stars entertain 100,000 people in a stadium.  Rush Limbaugh produces a high-quality show broadcast on many hundreds of radio stations.  These performers could make very little on their own.  Countless thousands of people, using a division of labor, are necessary to provide entertainment services to millions of consumers. 

​A CEO of a billion-dollar company is paid millions because he or she is highly skilled at controlling labor hours and making quality investment decisions.  If any part of the supply chain or sales operation is broken, a portion of the incoming revenue is eliminated.  For the most part, the rich run a company or part of a company that is producing ten to a thousand times more wealth for others compared to their personal earnings.

​A person running a $1 billion a year business is responsible for several million-dollar jobs, dozens of jobs over $300,000, hundreds of jobs over $100,000, several thousand jobs over $70,000, and tens of thousands of part-time and entry-level positions.  These jobs are directly through the business they operate, and an appropriate proportion of vendors or other companies directly associated.

If the CEO receives $10,000,000 per year, others receive ninety-nine times that or $990,000,000.  Anyone can apply for that $10,000,000 CEO position; however, the board of directors knows that mistakes can cost thousands of jobs and billions in lost wages over time.  The experience of the past success of top executives is vital to increase the odds the current business will thrive.  ​

Bill Gates leads a team of talented computer programmers to produce excellent products and uses inexpensive CD's or downloads to distribute that product or service.  Jeff Bezos developed a better way, as defined by consumers, to connect producers of products to the end consumer; thus, a less expensive middleman.  Resulting in Bezos and his large team serving hundreds of millions of people.  Hedge fund managers put capital at risk and coach businesses to success. 

​The rich person not working is also a rich person, not providing services and products to the poor.  The poor have shone through hundreds of years of buying decisions that they want to offer the rich person money to serve them.  If the government takes most of the money the poor gives the rich for that service, the rich will stop providing the service.  The high progressive tax rate is effectively banning the poor from asking the rich for services.  A 90% income tax on the rich means that the poor must pay the government $90 in order for them to legally trade $10 for the services of the rich.     

​Other people might provide that service; however, the rich not offering their services means one less person offering services and many people's first choice no longer available.  Some people might claim that this gives others the opportunity to work; that is short-sighted.  Those others can offer other services or compete for the same service. People's desire to be served is not even close to being satiated.   ​

A dollar represents service (anything of worth) you did for another.  You can use that dollar to request services from others.  Whoever owns that dollar is due, the other half of the trade, of service for service.  You have that dollar because you already did your service.  When someone does service for you, you give up that dollar, and the trade is complete for you.  Your wealth is a representation of you providing more services than the services you consumed.  

Most statistical analyses of income inequality are abysmal.  Most reports take the rich's income before taxes and the poor's income before benefits, thus disingenuous.  There are hundreds of significant factors that need to be considered, that is routinely left out and entirely too complicated.  The cherry-picking of data to support pre-determined conclusions is widespread.  Uncompensated services you provide and receive are huge factors; scarcely counted.  Groups use their ideological values versus the full collection of individual values, resulting in actions that are given the worst motivations. 

​Many of the same people complain about wealth inequality.  The straightforward definition of wealth is that you served your fellow man more than your fellow man served you.  Complaining that someone has too much money is literally complaining that the rich man is not being served as much as he should be.  What happens when the rich man requests services?  He has to give up some of his money, thus less wealthy. 

​A rich man putting his savings in investments means he is spending his money on people providing services of building machines that make other people more productive in serving others.  While he is maintaining ownership of the machinery and other productivity-enhancing items, he is not getting the direct services to make his life better at the moment.  As long as a person holds on to his wealth, he is continuously enhancing others' lives by providing the necessary capital to escape subsistent living. 

​Thomas Sowell has made the point that people many thousands of years ago had all the same physical resources necessary to make everything we have today.  George Gilder is famous for making the point that wealth is knowledge, and learning is growth.  George Gilder's understanding of time is profound.  I try to emphasize that the more we learn, the more we understand the growing extent of our ignorance. People several centuries ago did not even conceive of so many ideas to realize that they did not know.

Donald Rumsfeld stated: “Reports that say that something hasn't happened are always interesting to me, because as we know, there are known knowns; there are things we know we know. We also know there are known unknowns; that is to say we know there are some things we do not know. But there are also unknown unknowns—the ones we don't know we don't know. And if one looks throughout the history of our country and other free countries, it is the latter category that tend to be the difficult ones.”

Would people 1,500 years ago have banded together earlier to form representative republics if they had the knowledge of the results of America’s experiment?  Would slavery have ended if MLK was sent back 300 years and preached in Africa with the knowledge he had before he was killed?  If a group of medical professors from several disciplines could go back to the year 1,019 with all their current knowledge; would life expectancy have increased?  If the knowledge of how to make a hydrogen bomb had been in the hands of FDR in 1940 and FDR showed the world with a couple well-placed explosions off the coast of Japan and Germany, would tens of millions of people still be alive by the war being dissuaded?

​Any one person does not even come close to approaching 1% of all knowledge.  Relationships change.  People constantly move to different stages of their lives.  Work is a constant competition to serve others, and others are trying to offer their services to who you are currently serving.  Businesses continually assess every aspect of their production for quality improvements, cost-effectiveness, and productivity. 

​People are constantly evaluating whether they should forgo, do it themselves, or trade for a product and service.  People determine whether their time is better spent on recreation and rest or work.  The demand and supply of resources are in constant flux. 

​The best-funded economic studies are extremely limited in that they collect a small fraction of the data necessary.  It might be the best data we can collect; however, we need to be humble and state the margin of error on most studies are high double digits.  The number of significant factors involved is in the hundreds, and there are thousands of less significant factors.  Data collection is hard, costly, and often highly insufficient.  One of the most frequently used; however, one of the worst ways to collect data is to ask people.  Many studies are laughable in their premise, their data collection, their analysis, their biases, and their high level of certainty.  Humbleness needs a stronger showing.

Share loans: given that Competitive Regulatory Agencies (CRAs) will have judicial authority, CRA’s could come out with Share Loans.  A Share Loan is when a bank invests in someone’s human capital (education) and instead of a fixed dollar amount with an interest rate, the contract calls for a share of future earnings of that individual’s income.  This might also be just a share of the increased revenue from that education.  Share Loans could be used as a tax in Statism Organizations.  The contract could be in dollars, charitable hours, hours of work, inheritance, or many other things of value that could be within a contract.

This could be a lifetime of earnings or for a specific set of years.  The variations are numerous, and many could be tried to success or failure.  These Share Loans would be of great interest to, Education CRA's, Charity CRA's, Financial CRA's, Human Resources CRA's, among others.  This asset could even be the base for new money.  The holders of these loans would be invested in that one person and will help him, or her get a job, advance in a career, and if laid off, find another job.  There is an excellent benefit to a person if an institution has a vested interest in that person making the most money possible.  Most people would be ok with paying ten percent of a $100,000 a year job versus zero percent of a $50,000 a year job.    

Usually, a person cannot enter into any contracts before the age of 18.  For the occasion of education, all share loans for a child under the age of 13 must be on the parent's future income.  A student between 13 and 18 can start contracting within limits, their own future income, labor, or other things of value.  After attaining the age of 18, they will have their full right to contract.  All government education taxes would not apply to those outside the Public-School System.  The current government education taxes act like education loan payments of roughly $800 per month per household for life.

A drawback of these Share Loans would be the Laffer Curve effect.  When deciding on a job or working that over-time, one examines take-home pay.  If the Share Loan is 15%, on top of taxes, that might push someone not to take the extra work hours in-lieu of extra leisure hours.  Another primary concern is that of stay at home mothers.  If a bank invested $100,000 for the education of a woman and expecting back 10% for 20 years, they have the risk of her choosing not to work.   A woman gets married and has a child right after graduation and makes the wonderful decision to raise her child full time.  The woman is supported by her husband and has a traditional family, thus not making any money.  The investors are out $100,000 because there is not any income to tax.  
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We should never put a woman in a situation where she cannot become a stay at home mother; because motherhood is the most important and valuable job in society.  We should not saddle anyone with debt they can not handle.  Life coaches and school counselors should lay-out the broadest set of opportunities with the most transparent and realistic possibilities.  Parents need to be heavily involved in teaching the realities of life.  Colleges and others should force students to look at the job opportunities and the salary range for the college degrees they are striving to attain.  There is a high percentage of students that start a degree and do not finish; thus, they have debt and no degree.          

There are many clauses to put into the contract to deal with many of these issues of people gaming the system or underperforming.  The first clause that should be in any type of loan contract is mandatory Charity Hours if payments are not made.  Under the Haley2024 Charity System, every Charity CRA would set up a Charity Economy.  There would be many work opportunities.  The roughly dozen Charity Economies will compete to be the most effective and productive, as well as moving the most people out of the need for assistance.  

A person with a college degree should be highly valuable in the Charity System.  If a graduate is without a job temporarily or long term, the loan repayment during this time would consist of charity hours.  A stay at home mother might be required to fulfill her contract by taking in other children while their mothers work, online work opportunities, among others.  Imagine if everyone that was delinquent on their student loans were out there helping the poor.

This article about education finance should touch on how many ways the government is increasing the cost, decreasing the quality, reducing the supply, and a dozen other issues of government involvement in K-12 and higher education that is doing great harm.  We should not just assume that government involvement is a must and try to sand the rough spots.  The government induced problems cannot be fixed with the government still involved.  Every problem a politician tries to fix is a problem they or other politicians created.  Their ‘fixes’ mostly deepen government involvement and worsen the situation.  A full-scale removal of government from education and regulations would bring significant improvement to education.  This reform would certainly include removing government accreditation and government mandates to work specific jobs.  The CRA Structure would replace the government with a far superior private sector accreditation system.    

This article should also touch on different education work models that could eliminate the need for higher education financing.  There is no reason why young adults should not be willing to put sixty-plus hours a week in for work/education.  Many businesses could have four to eight-year work/education models.  The education and work would be in the same field, and as skills are learned, they are doing real-paying work.  As more skills are attained, the more real paying work, the employee/student does.  The breakdown might be 30 hours as a student and 30 hours as doing real work, but those lines would likely have significant grey zones where practical work is supervised learning to ensure quality work is provided to consumers and clients.
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The real work pays for the education and the low living wage.  This has aspects of apprenticeship programs; however, would likely end up with highly rated certifications, degrees, and accreditations.  Doctors, lawyers, CPAs, MBAs, and other highly skilled professions might take a few more years based on many issues.  Law firms, hospitals, big-business, accounting firms, and others would team up with a college.  After four or six years, student/employees have a full degree, work experience, and no debt.  In fact, they made a livable wage.  Every person’s academic ability, drive, work ethic, accomplishments, hours worked, among other factors would determine pay and the length of time in the education part of the job.  The options of business/education models are numerous when government regulations do not force people into narrow monopolistic education models. 

Most places where sweatshops are located are hostile to private property and the free enterprise system.  Many people running sweatshops desire to invest in better factories with better work conditions.  Most companies want to invest in education and productive machines.  However, the corrupt leadership of the state or country often has a history of confiscating the improved multi-million-dollar factories.  Respectable investors do not want to invest where the assets can be stolen by the government.  Corrupt politicians and hostile government bureaucrats also create massive problems for a legitimate business that wants a good reputation.  A businessman’s best option in a poorly run country is often a low investment business that can be removed quickly, thus sweatshop-like conditions.  The people to blame, on the most part, are the lousy government leaders.

​Definition: “Remittances” occur when: immigrants send financial payments back to family in their country of origin.  Most remittances flow toward developing nations.
There are people who think remittances out of America are detrimental to America and Americans.  These people do not look at all the relevant issues.  They complain that $500 billion is sent out of the country.  They do not see the money coming back into America.  In fact, if the money never flowed back into America, these immigrants would be coming over here to serve us and not asking for service in exchange.  They would be giving us a significant gift.  Please send as many to my house to work, I will pay them with monopoly money; why give them real money if they are not going to try to buy something with it.  Well, of course, they have every intention to buy products with that real money; they just allow their loved ones back home to buy products with that money.  The funds must always flow back to America.

Free trade across American borders is dramatically different than free movement of non-Americans into America.  When a non-American comes into America, they are not just giving labor in a field or a factory, they live in our community.  They become part of our culture and our politics.  This article is not about the good or the bad related to community, culture, and politics, just that it is a huge factor and is a mixed bag.  If American businesses could star trek type beam someone into their field, hotel, facility or another place of labor, we could look at just the results of their labor and not the effect on schools, hospitals, and social services.  This would create a net positive to both the beamed in immigrant and Americans.  While we do not have a Star Trek transporter, busing just the laborers in for the day would limit the outside of work effects.

The competition from low skilled immigrants willing to work for $3 an hour would undoubtedly change many circumstances.  That big of a change would have large ripples throughout the economy.  It is tough to recognize and study all the variations in behavior and the thousands of changed prices throughout the economy.  A company with a backhoe can certainly underbid a project compared to a company with just shovels.  The company with just shovels could lower its bid and wages to get the job; however, the workers with shovels would likely find work in another industry with higher wages.  The Backhoe is similar to the low wage immigrant (beamed in).

Yes, studies clearly show wages of low skilled Americans are reduced when low wage immigrants undercut their wages.  Some people stop there and blame the immigrant.  There are dozens of highly relevant labor laws meant to protect American workers that do great harm.  Hundreds of business regulations stop many business models that could help with the adjustment.  The structure of welfare captures many low wage Americans in a life of dependence versus assisting them towards a thriving life.  The lower prices of goods created by low wage immigrants improve the lives of consumers by allowing their dollars to purchase more products. ​

 The immigrants only work to attain the money to buy products; thus, the immigrants’ demand for services matches the dollars he earned.  In the free enterprise system, everyone can produce products and bring them into the marketplace of 7.5 billion people.  It is up to everyone to become more productive, creating higher quality, and learning what consumers want.  Being able to freely price your products or labor allows everyone to win in that competition to serve others.  The American government’s protective laws often inhibit low skilled Americans from adjusting to market conditions and thriving.

Most people will not complain nearly as loudly if their neighbor outcompetes them on business because they are part of the same community.  The consumers that chose your neighbors’ business are your friends and community members.  However, the farther away the competitor is geographically or culturally, the less sympathetic they are.  It is easy to say ban the china company from bringing in product; because, it is unlikely we will meet those people in China.  We see the company going out of business in our town with 48 people without a job and reason that we should all be willing to sacrifice by paying a little more, in exchange for those 48 people remaining employed.  The issue is that one sacrifice times thousands of similar situations results in a much lower standard of living for everyone. 

46% of the people are still working on the farm, and nobody is allowed to buy oranges outside of their state.  Political signs are stating, ‘We must support our local Maine orange greenhouses.’  All cars need to be made in your state with all car supplies as well.  Stop complaining about the $128,099 mid-range car prices; look at how many jobs we are saving.  The banning of washers and dryers will allow women to start a business of pushing baskets to houses to pick up laundry to take to the lake for the wash.  While this might take things to the extreme, it is precisely these types of out competing that has allowed the average standard of living to significantly improve.  Trade protection is also called banning people from picking a better option.

 It is hard to live down two different timelines to determine if America made the right choice; however, it is inevitably a mixed bag.  East Germany cut itself off from trade and lived in much worse conditions compared to West Germany that allowed much more open trade.  If America puts pressure of tariffs and even trade blockades on other countries for misbehaving as a nation, the overwhelming blame of low living standards should rest solidly on the depraved leaders of the country.  There simply is no evidence that America harms countries that are not either hurting its own people or other countries.  There is also a real concern that if America trades with or allows other countries to trade with a terror-sponsoring dictator; then the dictator would have more money for terrorism.  Trading military weapons or military technology must always be of great concern.  The benefits of free trade are overwhelmed by our enemies attaining military might.

Mexico is certainly not the enemy of America; however, at the time of writing this article, President Trump stated he was going to impose a tariff on all Mexican products until the Mexican government stops the flow of immigration into America on the southern border.  Without a doubt, these tariffs will harm economic activity.  However, there are more essential issues at play.  This tariff is not about protectionist policies to help American businesses.  This tariff is not about collecting taxes.  This tariff is about putting pressure on Mexico to not assist the immigrants flowing through Mexico into America.  However, you come down on this issue, the issue here is that the President is using the tariffs to change the behavior and policies of other countries.  These immigrants are not (beamed in), so we do not only have the effects of labor.  These immigrants live here in America and create economic changes in circumstances with hundreds of both positive and negative effects.  The most significant benefit is hopefully greater respect for the rule of law and respecting borders.     

It could be totally justified for America to state that they are going to match any tariff by other countries so that America receives the same tax revenue as the other countries.  Adjustments could be made to factor in service provided differences.  This tariff match could give incentives to other countries to lower their tariff because it would reduce America’s tariffs as well.  Free trade is better for both countries.  If America adopted the match tariff program, it should be tied by law directly to an adjustment in income and corporate taxes so as to remain tax revenue neutral.  The tariff match law would have an automatic increase or decrease to other countries and to remain tax revenue neutral.  The tariff would create a higher disincentive to do trade; however, would be matched with a reduced tax deterrent to engage in other transactions.  This matching tax feature is designed to reduce the tariffs and if they do not, raise revenue in exchange for lower taxes elsewhere.   The bad behavior of another country could create a need for higher military spending as a show of force or possible kinetic military actions.  If this is the case; the tariff revenue would go straight to the military; thus, the tariff is paying for necessary services of protecting America.

There are anti-government people that do not want the government, even America, to tax because that gives the government more money to mess things up.  That is arguably true for 80% of the government.  The government even misuses the 20% in many ways.  Collecting taxes is a net good if the government uses the revenue wisely to protect themselves from foreign foes or creates a good rule of law.  There can be a justifiable use of a tariff to pay for the services surrounding trade coming across the border such as border control, ship inspections, and military and Coast Guard services to protect the ships.  Although most infrastructure should be in the private sector, if the government takes over the role of shipping terminals and roads, a tariff could justifiably be used for those services as well.  If the private sector did provide those services, the ships, tankers, truckers, among others would pay for the services they use.  The private Sector providing the necessary services means that the role of prices is fully at work and proper investments would be made.  The role of prices results in better prices, expenses tied to services, and less political decisions.

In conclusion, tariffs can be a useful tool regarding foreign policy.  Other than raising money for necessary services related to the trade; trade restrictions are harmful to America economically.  However, the values of better foreign policy and a better rule of law can be more powerful than the loss to the economy.  Without a doubt, the tariffs harm the people of the tariffed country and often suffer a low standard of living.  Sometimes the corrupt leadership of American’s enemies, changes policy for the better and sometimes for the worse.  The reform of Haley2024’s Pockets of Freedom would come with a 5% military tax and then full free trade.  The Pockets of Freedom economy and regulatory structure would be the full CRA structure.  Allowing open immigration into Pockets of Freedom from hostile countries with a robust incoming filter and banishment laws would give oppressed people of the world a place of refuge.  Thus, creating a strong incentive for bad leadership to reform.

Money in the bank is the representation of savings.  When two people trade product for product, the trade is complete; however, if someone trades product for currency, they are giving up something now for the promise of receiving something later.  Currency is saved buying power.  The person that has money already served others and has not received their service to finish the trade.  Certainly, many people were given money by family members; however, the principle remains; the currency represents service that was already provided and now waiting for service in exchange. 

Many businesses need the start-up capital to produce products efficiently.  A person with money invests funds to the new business.  That new business uses that money to demand labor hours to build a building and fashion cool machines that assist in creating products.  That transaction is now done because the labor hours used to make the original products are exchanged for the labor hours to build the building and the labor hours to make the machines.  A new asset or something of worth is created.  The business that can productively create products is worth real value.  The contract of supplying the money, the capital, the work hours, to start the company came with real ownership rights in the business.

The contract can be written in hundreds of different business models; however, the savings of the currency switched to ownership in the business or the ownership of loan payable with interest.  That startup money, that capital is the base of capitalism and only comes from savings.  Under the Haley2024 Monetary System, money and capital can also be created by creating something of value.  People saving money is valuable to society because that means someone can eat and pay bills if they are temporarily unable to work and serve others.  Of course, saving for retirement is always a wise idea and only occurs when you serve others more than you asked for service in return.  If you serve others for 50 hours a week and only ask for the equivalent of 40 hours of service in exchange, you are saving that demand for ten labor hours per week to be used after retirement. 

 Cash is usually not a great saving tool for large amounts of savings over a long period of time.  Some people specialize in making the best use of savings.  These hedge fund managers, investment bankers, and other ‘big-money people’ are incredibly valuable.  If they make a mistake, someone’s retirement money is gone.  These money people, after decades in the business, working with successful investors, have the experience to know the good investments from the bad investment.  These people know the value of large risk pools.  These people know proper due diligence.  These money people know to look at the track record of the business owner.  These people know to look at the sales history and potential upsides and downsides. 

Money people with good results have helped to create many jobs that productively produce products that consumers voluntarily turn over their cash to receive.  In exchange for doing a good job, the money people, according to a contract and agreements, take a percentage of the profits.  The money people that invested in poorly run businesses that could not produce a product that consumers would voluntarily turn over their cash to attain, lose saved money.  Hopefully, the saver diversified their savings, so one bad investment does not leave them without money for retirement.  Large risk pools and large and diversified annuities have proven to spread the upside and downsides over many millions of people.  In a competitive market for saving and investment vehicles, businesses in the business of investments reward those that have the best success track records and fire those that lose money.

The vulture capitalist that buys up a company to fire all the people and sell off all the assets receives the worse scorn.  In fact, they are some of the most needed money people in the free enterprise system.  A good size business with hundreds of employees must have attained success in the past.  However, often the sales go down for hundreds of different reasons.  Nobody gives up on a business quickly.  Often a business tries many different business models to regain a respectable profit margin.   If a business takes a loss for so many years, and all the attempts at change do not seem to turn the business around, the business must shut down.  Most businesses have a lot of assets in real estate, buildings, and equipment.  Even branding holds a lot of value.  The greatest value in a company is often personnel. 

The business owner making a specific widget was good at that task; however, the task of selling off all the parts is a special skill that only a few people can do well.  The vulture capitalist is not the one that put a business out of business; the customers not buying the product anymore at the needed price, collectively made that decision.  The vulture capitalist just gets the blame.  When a big business is not making money for years, all the vendors, unions, and employees also must consider business model changes or lose a part of their business or their employment.  In the free enterprise system, everyone has their point where they will jump ship and seek other opportunities.

Only a very few people have the skill, experience, and willingness to put the 90 hours a week into researching the best opportunities for the next investment.  Once chosen, there are long hours to ensure the best choices are made.  Ignorance is costly.  Quality information and the time to acquire that information is critical to out-compete producers.  There is a lot of work to divide the labor appropriately.  Messing-up on one aspect of the business often means low sales and millions lost.