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Foundation for a Better Economy Advocates Replacing the Income Tax

The Foundation is promoting the payments tax plan, which would have a much lower tax rate of less than 1 percent.

BOULDER, CO — The Foundation for a Better Economy is a nonprofit organization whose mission is to guide solutions for the modern economy, with a focus on replacing the income tax with a payments tax.

A payments tax would tax the whole system, including the untaxed financial sector, which represents $5 trillion in payments each year.

The foundation seeks to educate, inform and engage Americans about the economy and alternatives to the income tax, which unduly burdens ordinary Americans.  The foundation promotes citizen forums, policy initiatives and national conversations on the economy to educate people about the need to modernize our taxation system.

Modern technology has allowed the U.S. to improve production, but the financial system is outdated and holds back the economy. The foundation is proposing fundamental shifts to taxation to ease debt and keep pace with the nation’s accelerated production capacity due to technology.

“The problem with our current tax system is that we primarily tax one source: income. Our system of taxation runs by taxing a metaphorical lake. Instead we should tax the whole water cycle  – the money should be pulled from the entire economy,” said Scott Smith, the founder of the foundation.

The Foundation for a Better Economy is proposing a payments tax, which would have a much lower tax rate of less than 1%.  Compare that ultra-low rate to an average of 25% American now pay with income taxes.

The payments tax would tax the flow of money through the financial sector of mortgage-backed securities, derivatives, bonds and notes. The financial sector is largely untaxed and invisible to most Americans.

The foundation is currently promoting the payments tax plan as part of a larger upgrade to the U.S. financial system. Under a modernized financial plan, the U.S. would have enough additional revenue to retire the national debt and pay for new services, such as free health care, free college tuition and a uniform basic income.

In 2015, there was a total of $5,000 trillion in payments in the economy. By contrast, the income of all Americans amounted to only a third of 1% of the total payments that occur in the nation each year (around $16 trillion).

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For an interview with Scott Smith, founder of the Foundation for a Better Economy, email info@abettereconomy.org.

To learn more about the vision for updating America’s financial system, read Scott Smith’s  book, The New Operating System for the American Economy. Visit the Foundation for a Better Economy website.