These people have been labeled as extremists and even out of touch by many, are now basking in a new sun of economic awareness displaying a collective smirk telling even the most skeptical of critics “See, we told you so”.
Unfortunately, we still aren’t listening. If we were we would be seeing the coming months or years not as economic turmoil, but a precious window of opportunity to correct our economic system and make it better.
One of the worlds foremost thinkers in the field of monetary reform is a long time resident of the Okanagan Valley, and he’s quietly watching in the wings as nearly every one of his predictions quickly turns into reality.
Darcy Craig Milligan’s work has become both renowned and vilified in the world of international banking as he has both exposed and proposed alternatives that would see our economic framework returned to more local control. His theories have for the most part flown under the radar of mainstream media and have been unnoticed by Canada’s governments, but that may shift.
Much of what Milligan has focused on over the past three decades is what’s described as Constitutional Money, which is the foundation to monetary reform, but there’s a component of that reform movement that could prove to be just what we need right now.
A few years ago he presented an innovative proposal that is designed to help restore democratic control over our national economy and incrementally replace most if not all forms of present taxation with a different model. Economists coined the proposal the Milligan Financial Transactions Tax (FTT).
It’s a simple tax of .1% on all financial transactions which would equal $1 on every $1,000, whether domestic or international. It would be collected at source by financial institutions and remitted by them automatically and directly to the treasury of the nation.
A defining characteristic of the Milligan tax is that it would be a tax on gross transactions. It would particularly benefit nations who host stock exchanges, bond markets and foreign exchange trading and who will then be able to help other less fortunate nations from a position of strength. The uniqueness of the proposed tax lies in the relative simplicity of its collection and distribution. Its power lies in the fact that its benefits flow to the over-taxed majority – the ‘regular folk’ - and to the communities, in which they live, work and raise their families.
The FTT revenue received by the National Treasury would be re-distributed to municipalities via provincial or state governments on a per capita basis determined by the last available census population figures. They in turn would pass pre-determined funding to hospital and school boards and other local requirements.
This version of a comprehensive Financial Transaction Tax has been dubbed the ‘Milligan Tax’ to distinguish it from the ‘Tobin Tax’, a somewhat similar proposal but one that targeted only foreign exchange dealings as opposed to all transactions.
The Depository Trust and Clearing Corporation (DTCC) plays an import role in the Milligan Tax, DTCC is a private corporation touches our lives and wallets everyday without us knowing. Most of us consider the largest publicly quoted companies like Wal-Mart with revenue of around $300 billion or Cargill with almost $60 billion in revenue as being massive players in the economy, but DTCC, a company with shares closely held by private banks and brokers has an annual turnover of an unbelievable quadrillion or a million billion dollars.
“It’s a staggering figure since the Gross National Product of the entire world is only $40 trillion”, said Milligan.
Around the planet every time a financial transaction is made electronically it flows through the central deposit system of DTCC, and a little bit of it stays behind.
DTCC was created as a means for international banking to manage huge volumes of transactions flowing through stock exchanges within a global cash-less economy. In other words, invisible transfers from your bank to another, millions upon millions of them, globally every day, each registering a ca-ching on DTCC’s cash register.
Now with the addition of credit cards and ATM’s the revenues into DTCC have been huge and continues to grow exponentially, and its business is proving to be more profitable than banking itself.
So as governments begin to invest in banking, one would think that DTCC would come under close examination, and it’s potential for helping us solve some of the bigger problems we’re facing locally, nationally and globally. The rationale is simple, if DTCC can skim a tiny percentage of each transaction flowing through its couffers for a profit, why can’t another tiny percentage be skimmed to cure the woes of humanity, and perhaps even save the planet?
Canada’s share of the $1.2 quadrillion in total DTCC financial transactions is projected to approach $80-100 trillion dollars, or roughly 6% to 8% of the DTCC total. A simple .1% Financial Transaction Tax, levied on every financial transaction in Canada—a single-page piece of legislation, with no loopholes and no exceptions—could therefore yield a total of more than $90 billion on foreign exchange and security transactions alone.
This small tax would therefore be capable of reducing and even totally eliminating most if not all taxes that we pay today, as well as injecting huge amounts of capital into local economies for the paying down of interest-bearing debt and the building of publicly-owned capital assets within communities.
Add to that the .1% FTT revenue from Canada’s more than 1 billion credit card transactions, 82 million debit card transactions and 200 million on-line banking transactions per annum and it’s possible to see how, within a relatively short period of time, income tax, corporate tax, GST and all provincial sales taxes could begin to be incrementally reduced and eventually removed.
The figures necessary for accurate calculations are not available to ‘ordinary’ Canadians but it can be assumed that Canada’s total FTT revenue figure could well reach $100 billion in the first full year, a sum which equals half of the tax revenue of our federal government which now includes an estimated $93 billion from personal income tax, $27 billion from corporate income tax, $25 billion from GST, $7 billion from import tax and excise duties and $5 billion from gas tax.
The gross FTT revenue collected by the national treasury would be remitted to individual provinces/territories for re-distribution to municipalities in direct ratio to population figures which would translate into $3,000 per capita to each of the provinces and territories. On this basis British Columbia, with a population of 4 million would receive for re-distribution $12 billion and a city of 30,000 residents would receive from the provincial treasury a total of $90 million.
The diamond in the rough within this proposal is that collection happens without the need of a tax return, there is no complicated tax culture that includes tax rebates, or avoidance, no remittance requirements and no bureaucratic superstructure required for policing collections.
There’s another great benefit as well, the people and the companies that consume more, pay more, which is more in keeping with an economic system seeking to better measure and reduce consumption.
Banks created DTCC to create a profit centre fitting to the age of technology, we would be wise to create a tax system less antiquated and more in keeping with what we need to do to better manage humanity our communities and nation.
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Don Elzer writes and comments about the future, current affairs, lifestyle and the natural world. He is a director of the Watershed Intelligence Network publishers of The Monster Guide, which can be found at www.themonsterguide.com
He can also be reached by email at: treks@uniserve.com
