Abstract

The Staatsbuergersteuer is a system to tax personal income completely different to the usual methods of income taxation. It is made up of a combination of four principles. None of these may be omitted, without destroying it's effects.
  1. The object of this tax is not the yearly income of a person, but the income of this person during its complete life.
  2. With respect to time it consists of two components:
    • During the lifetime only on the consumption of this person is taxed
    • At the end of life all assets owned by this person will be taxed by the Final Tax.
    • Both, consumption and owning assets are valued (messured) by market-prices and taxed by the same Tarif
  3. Tax, T, is calculated by: T = m * X - B , with
    • m is a constant (proposed is m= 0.4 = 40%)
    • X is the basis of taxation (either market value of consumption or - at the end of life market - the market value of all assets)
    • B is a value, named Buergergeld, independent of X (proposed is 750 €/monthin the year 2010 developing later proportional to the average income/person).
    Should X be less than 1875 €/month (=750/0.4) the person has not to pay taxes but gets money back. (negative income taxation). Although B is a parameter of the tax rate and no income, it has effects similar to Basic Income.
  4. Participation Tax: Company profit (or dividend or a linear combination of both) is taxed by m' (proposed is m'=45%). Owners of the company may reduce their personal tax by this tax payed broken down to their share of participation of the company, if they declair their dividend or Ownership Participation in their tax declaration.

To calculate the consumption, C, the equation: C = I - S is used, where I = Income and S = Savings. The Income contains not only all incoming payments, but also non monetary benefits (e.g. insurance premiums payed by employers on insurances of their employees) or usage of own assets (e.g. usage of own property by the assumed rent or the marked value of consumed vegetables out of the own garden).

Income also contains the value of assets got, wether they are given away, inherited, or imported. If those are not consumed but saved, these Savings (- S) reduce te taxation base, and are not taxed. While today assets are purchased by money available after income is taxed, with the Staatsbuergersteuer a purchase of a priviledged asset reduces the taxation base by the price of this asset. In effect, taxation of this asset is delayed untill it is consumed. When it is sold one has to pay the tax on the selling price, not only on it's initial value but also it's growth in value. During the time this asset is hold, the treasury is a silent 40 % owner of the priviledged asset, because treasury waived 40% of the purchase-prise by not taxing it at the time of purchase.

Economically it does not realy matter wether an asset is priviledged (taxed, when it is sold) or not (taxed at the time, when it is bougtht), neither to the treasury nor to the owner. The economic equivalence, allowes the treasury, to declare priviledged and non-priviledged assets according to practicability. Thus e.g. captal assets or real estate can be declared to be priviledged and e.g. cars, boats, furniture or art objects to be not priviledged.

The german Version can be found at (HYPERLINK:) Staatsbuergersteuer.de. There the System is being developed, investigated and the consequences are being compared to Germany's system of direct taxation and social subsidiaries. It is available only in German language. If you are interested in a cooperation to expand the Staatsbuergersteuer into another Language and/or compare it to another system: send an Email to b.starkloff@gmx.de.