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Collateralism
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COLLATERALISM
Introduction
Economics practiced today is as backward as the medieval astronomy that believed that the earth was flat and that the sun, moon and stars revolved around the earth once every 24 hours. Medieval Astronomers collected statistics and wrote complex books in a vain attempt to predict the movement of the planets and patterns of stars in the sky, which were more often completely wrong; just as wrong as the forecasts of the present-day misguided economists.
When men like Copernicus, Kepler and Galileo discovered that the earth was not flat (nor the centre of the universe), but round like a ball, and one of several planets, revolving about its own axis, in orbit around the sun, following well ordered mathematical laws which lent themselves to absolutely accurate computation and forecasting, the academics of the day threw up their arms in horror at first, but gradually found their discoveries to be irrefutable.
Astronomy has now progressed from a statistical guessing game to an exact mathematical science, enabling men to travel to the moon and back, and space craft to explore the farthest reaches of the solar system.
In the same way, Collateralist economics is an exact mathematical science which is based on Collateral, the Gross National Collateral (GNC) and the Growth of GNC, which lends itself to mathematical computations and exact forecasting and planning.
Present-day economics are based on GNP (Gross National Product) which is a glorified term for "turnover". Turnover is not a measure of economic growth or prosperity. a classical example of this is "Rolls Royce Company" - when Rolls Royce had its biggest turnover, the Receivers were called in and they wen bankrupt. The true measure of the prosperity of a firm, individual or country, is its collateral.
COLLATERALISM is a tax-less economic system which, if adopted, will produce instant prosperity, reduce unemployment to NIL and create prolific revenue for all government expenditure.
Twenty Questions on Know your Anti-Prosperity Iniquitous Tax Laws
Now that even Russia has rejected Communism and Socialism, we in the West may be under a misapprehension that we live in a prosperous capitalist society. Nothing is further from the truth. We are in a deep recession because of Socialist anti-prosperity tax laws. The purpose of this quiz is to expose these iniquitous tax laws.
So, you think you know your tax laws do you? Listed below is a series of statements to which an answer of "True" or "False" must be given. Please tick the appropriate answer you feel is applicable. Click for answers at end of page.
1.
It is a criminal offence to earn money honestly, efficiently and by hard work.
TRUE/FALSE
2. It is a criminal offence to spend money honestly.
TRUE/FALSE
3. It is a criminal offence for a business, firm or company to make a profit.
TRUE/FALSE
4. It is a criminal offence to allow one's capital to increase in value.
TRUE/FALSE
5. It is a criminal offence to give full-time permanent employment to anyone.
TRUE/FALSE
6. It is not only a criminal offence to buy a TV set, but a criminal offence to use it as well.
TRUE/FALSE
7. It is a criminal offence to be wealthy.
TRUE/FALSE
8. It is a criminal offence to die wealthy.
TRUE/FALSE
9. It is a criminal offence to be unemployed.
TRUE/FALSE
10. It is a criminal offence to accrue money earned from interest on a bank savings deposit account or building society.
TRUE/FALSE
11. It is a criminal offence to let your house for rent.
TRUE/FALSE
12. It is a criminal offence to be alive and older then 18 years.
TRUE/FALSE
13. It is a criminal offence for a poor waitress earning £46 per week not to declare every 5p tip she receives.
TRUE/FALSE
14. Under present-day legislation, a multimillionaire whose real assets exceed £8million need pay less income tax than a poor £98 a week 59 year old cleaner, whose assets are under £10.
TRUE/FALSE
15. It is a criminal offence not to declare money earned from gambling.
TRUE/FALSE
16. We pay income tax in order to pay for the cost of roads and street lighting.
TRUE/FALSE
17. It is a criminal offence to bring into the country any form of goods merchandise or machinery, even though the money used to purchase them was earned abroad.
TRUE/FALSE
18. The best recommended way to live under present day tax legislation is to have all capital and no income while one is alive, and all income and no capital when one is dead.
TRUE/FALSE
19. It is a criminal offence for a building contractor to give sub-contract manual work to a school-leaver or to the unemployed.
TRUE/FALSE
20. The only way to raise revenue to run a country is by taxing income or expenditure (i.e. Income Tax, Capital Gains Tax, Value Added Tax, Customs Duty, Excise Duty).
Answers to Tax Laws Quiz
Answers to Know your Anti-Prosperity Iniquitous Tax Laws
Q1. It is a criminal offence to earn money honestly, efficiently and by hard work.
TRUE: Anyone earning money honestly, efficiently and by hard work is breaking a law entitled "The Finance Acts" - the penalty for breaking this law is a fine with a nice sounding name "Income Tax" - legalised stealing of one's income by the Government - which in Britain during 1991 was 25p per £1 earned for ordinary offenders and as much as 40p in the £1 for very hard working and efficient offenders. The fact that one does not possess enough money to pay the fine is no excuse. Failure to pay the fine can render one on summary conviction to confiscation of property, being declared bankrupt, jail or all three - classical example: Lester Piggott - Britain's best jockey.
Q2. It is a criminal offence to spend money honestly.
TRUE: Anyone purchasing goods, especially manufactured goods, from others is breaking the law. The penalty for breaking this law is a fine with the nice sounding name of V.A.T. (Victimise All Transactions) - legalised stealing of one's spending by the Government - which in Britain is 17.5%of the value of the goods, depending upon the whims and fancies of the Chancellor.
Q3. It is a criminal offence for a business, firm or company to make a profit.
TRUE: A business, firm or company that makes a profit, even by honest, efficient and hard working means is breaking the law and is liable to a fine called "Corporation Tax"- legalised stealing of Company profit by the Government. In 1991, 40% of the profit made is confiscated. But is does not end there: When the rest of the profit or balance is paid out in the form of dividends, Income Tax at the basic rate and Sur-Tax at the higher rates is charged on the income of the recipient.
Q4. It is a criminal offence to allow one's capital to increase in value.
TRUE: If capital, such as shares or property, is allowed to increase in value, even if through no fault of one's own, the law is being broken, and as such is liable to a fine called "Capital Gains Tax"- legalised stealing of one's Capital Gains by the Government - 40% of the increase in value is confiscated, even if there was no effort at all on the part of the owner in affecting this increase.
Q5. It is a criminal offence to give full-time permanent employment to anyone.
TRUE: Firms giving permanent employment to anyone are hoarding labour and are breaking the law and are liable to a fine which was called S.E.T. (Selective Employment Tax) plus the employer's share of National Insurance Contribution - legalised stealing of employers payroll by the Government -. Now, only the latter fine is payable but is greater than the combination of the two.
Q6. It is not only a criminal offence to buy a TV set, but a criminal offence to use it as well.
TRUE: The purchase of a TV set is breaking the law against "spending money honestly" and a fine called VAT - legalised stealing of one's spending is payable (in Britain 17.5% over and above the selling price). It is levied on persons breaking this law. In addition, offenders who use the TV set are liable to a further fine called "TV Licence" amounting to (in Britain 1999) £97.50 per annum on a colour set, whether or not they tune into the BBC , who receives the fees accrued from these fines.
Q7. It is a criminal offence to be wealthy.
FALSE: There is no law against being wealthy. Theoretically, if one owned £100 billion, or even half of Britain, provided one did not make a profit, one is well within the law. No fine is liable.
Q8. It is an offence to die wealthy.
TRUE: It is an offence to die wealthy, especially when one's wealth exceeds £118,000. The penalty for dying wealthy was called "Estate Duty" or "Death Duty" but now has a nicer sounding name - "Capital Transfer Tax" or "Inheritance Tax" - legalised stealing of one's beneficiaries' inheritance- 40% of the real and personal assets are confiscated and deprived from the beneficiaries.
Q9. It is a criminal offence to be unemployed.
FALSE: There is no law against being unemployed. In fact, if one wishes to live well within the law, this is the best way of living, advocated by most Governments today - so why not join the "Pool of Unemployed" which misguided economic experts erroneously believe will help keep wages and prices down. If, on the other hand, one is employed, even if one's income is well below that liable to Income Tax, a fine called "National Insurance Contribution", amounting to at least £236 (in Britain 1991) per annum if payable.
Q10. It is a criminal offence to accrue money earned from interest on a bank savings deposit account or building society.
TRUE: Any interest accrued as a result of lending money to a bank of building society is liable to a fine called "Unearned Income Tax", which can be 25% or more of the interest earned. It is also an offence not to declare same.
Q11. It is a criminal offence to let your house for rent.
TRUE: It is classed as "Unearned Income" and Income Tax is liable on same.
Q12. It is a criminal offence to be alive and older then 18 years.
TRUE: In 1991, anyone who was older than 18 had to pay a fine with a nice sounding name - "Community Charge" or "Poll Tax", even if you are unemployed, disabled and/or seriously ill. Failure to pay this fine, irrespective of your circumstances and inability to pay, can result in a prison sentence, even if you were desperately ill and on a ventilator. This law has since been abolished.
Q13. It is a criminal offence for a poor waitress earning £46 per week not to declare every 5p tip she receives.
TRUE: All gratuities, tips, etc., received by porters, taxi drivers, waiters, waitresses, barbers, hairdressers, etc must be declared for "Income Tax".
Q14. Under present-day legislation, a multimillionaire whose real assets exceed £8million need pay less income tax than a poor £98 a week 59 year old cleaner, whose assets are under £10.
TRUE: The well paid and astute accountants of a multimillionaire can easily prove that his legitimate expenses are so great that he makes no profit (if not a loss) on paper and as such is not breaking the law, and hence, is not liable to Income Tax at all. On the other hand, the 59 year cleaner earning £98 a week, (whether the cleaner can afford to live on that or not) is breaking the law by earning money, even though she is earning the money honestly, efficiently and by hard work. The cleaner is liable to the fine called "Income Tax" and can be jailed for non-payment.
Q15. It is a criminal offence not to declare money earned from gambling.
FALSE: It is not necessary for one to declare income gained from gambling because, as far as the Inland Revenue is concerned, only the organisers are liable to tax. The Government, apparently, believes that the end does justify the means. So keep on gambling.
Q16. We pay income tax in order to pay for the cost of roads and street lighting.
FALSE: Not a single penny collected from Income Tax is spent on roads. On the contrary, 90% of the funds collected from Road Tax and Tax on the Purchase of petrol and diesel is used to subsidise other Government expenditure, including salaries of uselessly employed ministries.
Q17. It is a criminal offence to bring into the country any form of goods merchandise or machinery, even though the money used to purchase them was earned abroad.
TRUE: The nice sounding name for the fine breaking this law is called "Customs Duty" and one is liable to pay this, even though the country badly need the goods and machinery to set up new industries and give work to the unemployed.
Q18. The best recommended way to live under present day tax legislation is to have all capital and no income while one is alive, and all income and no capital when one is dead.
TRUE: One of the best ways to do this is to be an unemployed gambling cheat.
Q19. It is a criminal offence for a building contractor to give sub-contract manual work to a school-leaver or to the unemployed.
TRUE: A contractor who gives sub-contract work to a school leaver or an unemployed person must, by law confiscate 25% (of the labour content) of all the money paid out to the sub-contractor and send it to the Collector of Taxes. Failure to do so makes the contractor liable for the 25% and/or fined and/or end up in prison. A sub-contractor who is able to produce a "Tax Exemption Certificate" can be paid this money without deduction. However, school leavers and the unemployed are not eligible for a Tax Exemption Certificate, no matter how perfect their tax record or reputation.
Q20. The only way to raise revenue to run a country is by taxing income or expenditure (i.e. Income Tax, Capital Gains Tax, Value Added Tax, Customs Duty, Excise Duty).
FALSE: Far greater revenue can be raised to cover all the expenses of a country (such as external and internal defence and the Social Services) without levying a single penny on income and expenditure. The other way of raising revenue is by contributing a small percentage (1%) of one's collateral. This would create a gigantic growth in true wealth and collateral of the nation. In less than two years the surplus revenue raised would be sufficient to refund the first year's revenue payers their money back with 20% inters, making it a virtually tax-less system. This is the Doctrine of Collateralism.
How money was invented
This simple fictional child's story has far reaching economic implications and laws to be learned from common sense, and is the basis of proof for the Laws of Collateralism.
Once upon a time, there were three men in a village, a shoemaker, a farmer and a tailor. No money existed at that time, and all trade was done by barter, i.e. the exchange of goods of one sort for those of another.
All was well, until one day the shoemaker ran out of corn. So he went along to the farmer and asked him to give him a bag of corn in exchange for a pair of shoes.
"I'm sorry," said the farmer, "but I already have a pair of shoes, so I can't let you have the bag of corn.".
It was a cold day, and hardly had the shoemaker left, when the farmer felt a cold shiver down his spine. "I think I'll take this bag of corn down to the tailor and get myself a warm coat in exchange," he said.
"Sorry," said the tailor when he got there. "I can't give you the coat Mr. Farmer as I have enough corn already. In any case, I need a new pair of shoes, and that's what I'm going to trade this coat for."
But when the tailor got to the shoemaker's house, he was also in for a shock. "I already have a coat, Mr. Tailor," said the shoemaker. "sorry, but you can't have the pair of shoes.".
So, there they were, three miserable and frustrated men. The shoemaker was hungry, the farmer was cold and the tailor's feet were sore. They couldn't barter anymore.
However, the shoemaker was an Inventor and an optimist - one who creates opportunities out of difficulties. He said to himself, "surely there must be a way out of this frustrating situation. I want a bag of corn from the farmer who doesn't want my shoes, the farmer wants a coat from the tailor who doesn't want his corn ad the tailor wants a pair of shoes from me and I don't want his coat.".
Suddenly, he had a brain-wave. Using his knife he fashioned three wooden sticks of exactly the same length, size and shape and marked them with an identically shaped notch. Then, calling the others together he said, "I have a solution to our problems. Look here. I have made three special sticks and I'm going to give us one each. Now if any of us requires something from the other, instead of giving goods in exchange, we will give this stick."
"Preposterous!" exclaimed the others. "Do you mean to say that for a worthless looking stick like that, you expect us to part with our valuable merchandise?"
"Yes", replied the shoemaker, "let's try it out."
"Alright" said the tailor, "here's my stick, can I have the pair of shoes I asked you for?"
"Certainly", said the shoemaker, handing him the shoes.
"Here's my stick," said the farmer to the tailor, "can I have the coat please?"
"Er, yes...", replied the tailor, handing him the coat.
"But," said the farmer, I'm left without a stick now!"
"No you're not," said the shoemaker, "you can have one of the two sticks I have in exchange for that bag of corn.".
"Why, yes, certainly. Of course you may have it." replied the farmer.
"So you see," said the shoemaker, "we have now all got what we wanted, and we still have one stick left each. Let us call these sticks MONEY."
"Yes!" they all agreed, and they lived happily ever after.
Sequel to the story of How Money was Invented.
Within a very short time, the Shoemaker, the Farmer and the Tailor began to realise what a marvellous invention they had in MONEY. They found that the more often they repeated a transaction, the more goods and services each of them were able to afford, and hence their standard of living kept going up. That is:
the faster the velocity of money and spending, the higher the standard of living for all.
The farmer and tailor were not only able to afford shoes, but boots and slippers as well. The shoemaker and farmer were each able to afford not only a coat, but other clothes as well and the shoemaker and tailor were able to buy other farm produce, like fruit, vegetables, dairy products, etc. As more people came to the village, they too were introduced to the system, and they realised that:
all persons receiving goods and services from others, must in turn provide goods and/or services required by others.
However, they also discovered something sinister - SAVING! If any one of them decided to start saving (by not spending his money through buying from the others) not only he, but the others would suffer as well. Thus, the Monetary System broke down, so
if money is taken out of circulation and consumers deprived of it, trade will come to a halt, resulting in starvation and deprivation.
They found that one stick was not enough, so they produced more. Later on, as news spread, it was taken up by the kings and rulers of many lands. Instead of wooden sticks, coins struck out of rare metals, such as gold, silver and copper were used. This had the advantage of thwarting counterfeiters as the coin's value was worth the actual weight of the metal contained.
Still later, because it was found inconvenient and unsafe to carry large amounts of coinage, PROMISSORY NOTES or paper money was issued, first by goldsmiths (who became the first bankers) and later by rulers and governments. This worked very well as long as the bankers, rulers and governments honoured their promises to print and circulate no more paper money than the gold and silver actually held by them (i.e. counterfeiting).
The Monetary Laws
Chapter 4
The Monetary Laws
The moral of the story of "How money was invented"
The three villagers in the story of "How money was invented" are economic symbols. They could represent three business firms or enterprises, or even three different nations, or any number of people, companies or nations. The four important common sense morals to be learned from this simple story are repeated below:-
The Four Monetary Laws
If money is taken out of circulation and consumers deprived of it, trade will come to a halt and there will be starvation and deprivation.
The faster money changes hands in exchange for goods and services, the higher will be the standard of living.
All persons receiving goods and/or services from others must in turn provide goods and services required by others.
When paper promissory notes or non-valuable material is used for money, the issuing authorities should never be guilty of counterfeit.
The real cause of all the economic troubles suffered now (and in the past) is that these simple Monetary Laws have been blatantly broken by successive governments of the world.
Rule 1 is broken by money being taken out of circulation by Income Tax, Sur Tax, Corporation Tax, Capital Gains Tax, taxes on interest and dividends, credit squeezes and artificially raised interest rates.
Rule 2 is broken by artificially increasing prices through taxing expenditure - sales tax, purchase tax, value added tax, customs and excise duty - these slow down the velocity of money in the mistaken belief that "by raising prices they might check inflation".
Rule 3 is broken by persistently squandering money on the salaries, wages and administration costs of wasteful and uselessly employed bureaucrats such as the Customs and Excise, Inland Revenue, large ministries NEDC government departments, admiralties and futile research projects. money is also wasted by maintaining an artificially created pool of unemployed people and then having to pay salaries (or welfare benefits) to these people for doing nothing.
Rule 4 is broken by printing more paper money (or promissory notes) than the amount of rare metals (such as gold) or COLLATERAL that they possess to back it. This leads to a run on the currency, inflation, devaluation, unemployment and recession. In many countries, the paper money is worth less than the paper it is printed on.
CHAPTER FIVE
Sabotage Assignment
or
How to sabotage your country without trying if you were Chancellor of the Exchequer
or better still
How to sabotage your country if you were Permanent Secretary to the Treasury
or even better still
How to sabotage your country if you were Chief Economic Adviser to the Treasury.
This chapter has been especially written for the sceptics who are not convinced by the answers of the Know your Iniquitous tax laws quiz (chapter one).
NOTE WELL: There is no suggestion or insinuation that any chancellors of the exchequer (past or present), or permanent secretaries to the treasury or economics advisers to the treasury have in the slightest way been a deliberate saboteur who has, with malice and forethought, tried to sabotage his country. It is the opinion of the author that all past and present chancellors of the exchequer and permanent secretaries and economic advisers to the treasury are well meaning with the best interest of their country in mind.
However, due to the misguided advice and/or primitive economic education that they have been brain washed into receiving, sabotage of the country's economy has nevertheless occurred and all by the action of just one man - The Chancellor of the Exchequer - without him even realising it, let alone admitting that he was responsible.
To appreciate this chapter, one has to image that one is living in Utopia i.e. "A land of milk and honey" no strikes, no unemployment, no recessions, no balance of trade deficits, no devaluation of the currency, but perfect harmony and prosperity.
A newly appointed Treasury is given the task to "Deliberately, with malice and forethought, sabotage the economy of Utopia by instigating inflation, recession, strikes, unemployment, balance of payment deficits and devaluation (without any blame be apportioned to them). Imagine that the Permanent Secretary to the Treasury is called Humphrey and the Chief Economic Adviser is called Bernard.
ACT ONE Scene 1:
The Chancellor of the Exchequer's office at the Treasury. The Chancellor is seated at his desk, and sitting in front of him are Humphrey and Bernard. We tune into their conversation:
Chancellor: Well as you know, this country, Utopia has been running very smoothly for quite a few years. There is no record of strikes, the rate of inflation is zero, there is no unemployment, there is a good Balance of Trade surplus and the present currency seems to be very strong. Now, you know it wasn't very easy for the three of us to get the positions we now hold, but you know sabotage assignment, have you any useful suggestions?
Humphrey: Yes, Chancellor. It has been noted that the vast majority of this country's population are extremely honest, hard working and efficient, which is why this country is so prosperous. So our first assignment is to put a stop to this. Any suggestions Bernard?
Bernard: Well Chancellor, why don't we just pass a law making it a criminal offence for anyone to earn money honestly, efficiently and by hard work and the penalty for breaking this law should be confiscation of at least 25% of one's income for ordinary offenders, rising to a confiscation of 98% of one's income for very hard working and efficient offenders?
Chancellor: Oh no! You couldn't do that! People would be up in arms in revolt. In no way would they accept such a preposterous law!
Humphrey: Yes Chancellor, I agree with you, However, there is a way round.
Chancellor: A way round? What do you mean?
HUMPHREY:
Well, if we could re-phrase the law, give it a nice-sounding name like "INCOME TAX" for ordinary offenders, which we shall describe as the Lower Income Bracket………
BERNARD:
And "SUR-TAX" for the Higher Income Bracket.
CHANCELLOR:
Excellent, and in the case of Corporation, we can call it "CORPORATION TAX".
HUMPHREY:
Yes, Chancellor. That sounds very appropriate.
CHANCELLOR:
Well, that settles it. Could you organise an Inter-Departmental Committee to draw up a new Act of Parliament, Hamphrey?
HUMPHREY:
Yes, Chancellor. Any suggestions as to what this Act should be called?
BERNARD:
What about "The Finance Act"?
CHANCELLOR:
Yes! or "The Taxes management Act".
HUMPHREY:
Yes, Chancellor. I think we'll use both titles.
ACT TWO
SCENE ONE: The same office, a year later.
CHANCELLOR:
Well, Humphrey, what have you got to report on The Finance Act?
HUMPHREY:
Pretty good, Chancellor. Our Committee has doen an excellent job in brain-washing the working classes and the hard working entrepreneurs and businessmen alike, that this is an excellent law, and that all loyal citizens must pay Income Tax.
BERNARD:
We seem to have got our maximum support from t he Trade Unions who we have managed to hoodwink into believing that the heaviest penalties and confiscation of income falls on the very rich and profiteers.
CHANCELLOR:
Well, if that's true, how come we didn't have any opposition from the House of Lords?
HUMPHREY:
Well, not exactly, Chancellor. You see, we did manage to convince some of the really rich objectors in the House of Lords that we have provided loop-holes for them.
BERNARD:
Yes, Chancellor. As long as the really rich do not try to become any richer, or can prove with the astute accountants, that they are not becoming richer, we have made provisions to exempt them from any Income Tax.
CHANCELLOR:
Yes, I did wonder why they supported our Bill in the Lords. Anyway, Humphrey, your report on the Sabotage effects?
HUMPHREY:
Yes, Chancellor. We have created quite a bit of chaos, due to the confiscation of part of their salaries by Income Tax, the Unions are now blaming the employers for not paying them enough money and quite a few strikes have taken place.
BERNARD:
Yes! Also because the public have less money to spend on the goods and services of others, this has caused widespread recession and some firms have had to make quite a few of their employees redundant.
HUMPHREY:
As less goods are being bought, the overheads of mass-produced goods are having to be spread over fewer goods and this has lead to a certain amount of inflation, Chancellor.
CHANCELLOR:
Excellent. But I am still not satisfied with the sabotage effects. There stills seems to be far too much spending going on, which is still providing work for a substantial number of people. How can we stop it?
BERNARD:
Well, Chancellor, why don't we make it a criminal offence to "spend money"? We could impose a penalty of at least 17.5% of a Sale and/or Transaction.
CHANCELLOR:
Do you really think the public will stand for that? You'd be victimising all transactions and trading!
BERNARD:
That's right, Chancellor. That's exactly what we want to do - "Victimise All Trading". We could even call it V.A.T.
CHANCELLOR:
Well, I don't think the Public would accept that. What do you think Humphrey?
HUMPHREY:
Not unless we give it a nice sounding name like either Purchase Tax, or Sales Tax.
CHANCELLOR:
I prefer V.A.T. It reminds me of my favourite refreshment.
HUMPHREY:
Alright, Chancellor. In that case, how about "Value Added Tax"?
CHANCELLOR:
Excellent, Humphrey. Get your Inter-Departmental Finance Committee to draft out a new Act of Parliament straight away.
ACT THREE
SCENE ONE: The same office and characters, a year later.
CHANCELLOR:
Well, Humphrey and Bernard, your report on the economy?
HUMPHREY:
Excellent, excellent, Chancellor. our plans to wreck this country with the introduction of the "Victimise All Transactions" Law seems to have gone down very well, and it having excellent results.
BERNARD:
Yes, Chancellor. We have managed to brain-wash the Unions and General Public into believing that only the rich and people with a lot of surplus money have to pay this tax, and the more people spend, the more tax they would have to pay.
CHANCELLOR:
Really? Very good.
HUMPHREY:
Yes, Chancellor. The sabotage to the economy by this law alone is incalculable. Because we have artificially increased the price of goods by the "Value Added Tax", the sales of goods in the shops have slumped to such an all-time low that we have caused a record number of companies and people to bankrupt and close down. The unemployment figures are even worse than the depression of the 1930's and even well-known household names such as Hoovers have had to close down. The best part is that no-one has ever blamed us"
CHANCELLOR:
Really? You mean nobody has smelt a rat yet?
BERNARD:
No Chancellor. no-one. In fact, the men from the Unions are blaming the Management for failure to risk their capital and the Management in turn are blaming the Unions for asking for too high wage increases.
CHANCELLOR:
I can hardly believe it!
HUMPHREY:
Yes, Chancellor, when we confiscate more than 25% of their hard earned income, not a word of disagreement has come from any of the top Union leaders, yet they will pull their men out on strikes over just a 2% wage claim dispute!
CHANCELLOR:
Well, I am very pleased with the work of you boys. I think we can keep this up forever, just as long as the brain-washed economists, media, politicians and the general public never hear or, or turn a deaf ear to the antidote, anti-sabotage doctrine of Collateralism.
THE FIVE ECONOMIC DOCTRINES
Known Doctrines
1. Communism
2. Capitalism
3. Socialism - A compromise between 1 & 2
Unknown Doctrines
4. Oppressionism - the Evil Third World Doctrine
5. Collateralism - the Optimised Doctrine of Prosperity
KNOWN DOCTRINES
At the present time there are only three known doctrines - COMMUNISM, CAPITALISM AND SOCIALISM - a compromise between the former two. Looking at the circular chart, Communism and Capitalism are diametrically opposite each other. These are extreme doctrines, but both have good and evil tendencies.
1. COMMUNISM
The "good" or positive tendencies (or preferences) of Communism are "A maximum of welfare state benefits and social services for all". This is good as it ensures that no-one should be lacking in any basic necessity - health, education, food, shelter, medical attention, etc -irrespective of whether they are poor, disabled, old aged pensioners, unemployed or able-bodied people.
Unfortunately, the evil or negative tendencies (or decadent preferences) in the Communist system is "a minimum of incentives for individuals to become richer". This, by its very concept, cannot be good or a productive preference, as in practice, it means that no matter how hard or efficiently one works, one is not allowed to get any more in return than others not working as hard. There are no incentives for people to work to the maximum of their ability: no incentives for inventors to invent, and no incentives for businessmen or entrepreneurs to start up new productive industries and to create job opportunities to improve comfort and living standards for others.
True Communism, as described by this definition is hardly practised any more; even the few diehards like Red China, Vietnam and Russia have started incentive bonus schemes - looked down upon by true Communists as Capitalist.
2. CAPITALISM
The preference of true Capitalism are just the opposite of Communism, namely "a minimum of social services and welfare state benefits and a maximum of incentives for individuals to become richer". The latter is good and productive because it encourages businessmen and entrepreneurs to start up efficient and productive industries and inventors to develop new ideas for the benefit of the rest of the nation's comforts and living standards. The former preferences, namely, "a minimum of social services and welfare state benefits" cannot be a good preferences as contrary to some short-sighted and hard hearted individuals contention that it would put an end to laziness and social security scroungers, if people are deprived of their basic minimum standards of living to the extent that their children and handicapped dependants are hungry, cold and/or shelterless, some of those people may, out of self-preservation, have no alternative but to plunder, loot, cheat and steel. There is plenty of evidence of this all over the world, especially in the developing countries which are without social services or welfare state benefits. True Capitalism, as described by this definition is rarely found nowadays.
3. SOCIALISM - "A COMPROMISE"
Most countries in the world today have recognised that there are both good and evil features in Communist and Capitalist ideals and consequently have opted for a "compromise" between them. This is known as SOCIALISM, which by definition, is "some welfare state benefits and social services and, in order to pay for same, penalise incentives to become richer", namely Income Tax, Corporation Tax, Value Added Tax, Capital Gains Tax etc.
Contrary to popular belief, the United States of America is a Socialist country as it penalises individuals incentives to become richer. So also are Britain and former Yugoslavia. Former Yugoslavia was probably closer to the Communist side of the Socialist spectrum, whilst the USA is closer to the Capitalist side. Britain could be placed about mid-way. The British Conservative Party is probably more Socialist, if not equal to the British Labour Party, because of their taxation policies. In any case, it is the socialist bureaucrats in the Treasury, BCI and TUC that run the country, not the Minister of Party in power.
THE EVILS OF SOCIALIST COMPROMISING
When compromising, not only the lesser of two goods or benefits have to be accepted, but also the lesser of two evils. To opt for the evils of both Communist and Capitalist systems leads to the worst of economic consequences, namely unemployment, inflation, recession, balance of payment problems, strikes, go-slows, chaos, coups d'état's, and often bloody revolution. Ever since voters can remember, in every election, a new Government is voted in, largely due to an unpopularity vote, with a lot of empty promises that they are going to put things right, but things go from bad to worse and yesterday's recession is called (by the last ousted Government) a boom, compared to today's crisis. Unfortunately, we have been brainwashed by Politicians into believing that "belt tightening sacrifices" and "compromise" are the only solutions. However, there is no need to compromise in life. A word, known only to a few is "OPTIMISE".
Unknown Doctrines
4. OPPRESSIONISM - THE EVIL THIRD WORLD DOCTRINE
There is an unknown evil economic doctrine of Oppressionism.
Oppressionism combines the worst of Communism and Capitalism - minimum incentives to become richer and a minimum of welfare and social services.
Surprisingly, even in 2004, Oppressionism is unknowingly practised in most Third World countries like India, Pakistan, Bangladesh and African states. They inherited the anti-prosperity taxation of their former Colonialist Socialist rulers, preventing wealth creation, they do not provide welfare & social services and have introduced a Wealth Tax to impoverish the Existing and aspiring rich. As a result little or no economic progress can take place. Oppressionist countries will remain "poor third world countries" holding out their begging bowls to the so called 1st world, especially in times of drought and famine; illogically blaming corruption for their plight. Illogically in the 1st world - USA & Europe corruption is even more abundant.
So corruption cannot be the significant cause for poverty of the masses.
5. COLLATERALISM - THE OPTIMISED DOCTRINE OF PROSPERITY
The Collateralist doctrine preaches that instead of compromising between Communism and Capitalism, we should optimise the two to create COLLATERALISM - "a maximum of welfare state benefits and social services for all and a maximum of incentives for individuals to become richer". Combine these two preferences together to form the best system consisting of all the advantages with no adverse effects; the best of Communism and the best of Capitalism - vis the Utopian Doctrine of Collateralism.
Penalisation of incentives to become richer, namely Income Tax, VAT etc are abolished. The revenue needed to pay for a maximum of welfare state benefits and social services is raised from Collateral. Individuals contribute no more than 1% of their Collateral every year to the state, whilst being allowed to keep all profits and earnings, the revenue collected would be fare greater than all the taxes raised today, but must more than this, real economic growth - growth of Gross National Collateral (freed from the oppressive shackles of anti-prosperity taxes on income and expenditure) would be so great that the state income in two years, could afford to pay back the original Collateral Ensurance paid by individuals, together with 20% interest, making the system a virtually tax-free state.
Introduction
Economics practiced today is as backward as the medieval astronomy that believed that the earth was flat and that the sun, moon and stars revolved around the earth once every 24 hours. Medieval Astronomers collected statistics and wrote complex books in a vain attempt to predict the movement of the planets and patterns of stars in the sky, which were more often completely wrong; just as wrong as the forecasts of the present-day misguided economists.
When men like Copernicus, Kepler and Galileo discovered that the earth was not flat (nor the centre of the universe), but round like a ball, and one of several planets, revolving about its own axis, in orbit around the sun, following well ordered mathematical laws which lent themselves to absolutely accurate computation and forecasting, the academics of the day threw up their arms in horror at first, but gradually found their discoveries to be irrefutable.
Astronomy has now progressed from a statistical guessing game to an exact mathematical science, enabling men to travel to the moon and back, and space craft to explore the farthest reaches of the solar system.
In the same way, Collateralist economics is an exact mathematical science which is based on Collateral, the Gross National Collateral (GNC) and the Growth of GNC, which lends itself to mathematical computations and exact forecasting and planning.
Present-day economics are based on GNP (Gross National Product) which is a glorified term for "turnover". Turnover is not a measure of economic growth or prosperity. a classical example of this is "Rolls Royce Company" - when Rolls Royce had its biggest turnover, the Receivers were called in and they wen bankrupt. The true measure of the prosperity of a firm, individual or country, is its collateral.
COLLATERALISM is a tax-less economic system which, if adopted, will produce instant prosperity, reduce unemployment to NIL and create prolific revenue for all government expenditure.
Twenty Questions on Know your Anti-Prosperity Iniquitous Tax Laws
Now that even Russia has rejected Communism and Socialism, we in the West may be under a misapprehension that we live in a prosperous capitalist society. Nothing is further from the truth. We are in a deep recession because of Socialist anti-prosperity tax laws. The purpose of this quiz is to expose these iniquitous tax laws.
So, you think you know your tax laws do you? Listed below is a series of statements to which an answer of "True" or "False" must be given. Please tick the appropriate answer you feel is applicable. Click for answers at end of page.
1.
It is a criminal offence to earn money honestly, efficiently and by hard work.
TRUE/FALSE
2. It is a criminal offence to spend money honestly.
TRUE/FALSE
3. It is a criminal offence for a business, firm or company to make a profit.
TRUE/FALSE
4. It is a criminal offence to allow one's capital to increase in value.
TRUE/FALSE
5. It is a criminal offence to give full-time permanent employment to anyone.
TRUE/FALSE
6. It is not only a criminal offence to buy a TV set, but a criminal offence to use it as well.
TRUE/FALSE
7. It is a criminal offence to be wealthy.
TRUE/FALSE
8. It is a criminal offence to die wealthy.
TRUE/FALSE
9. It is a criminal offence to be unemployed.
TRUE/FALSE
10. It is a criminal offence to accrue money earned from interest on a bank savings deposit account or building society.
TRUE/FALSE
11. It is a criminal offence to let your house for rent.
TRUE/FALSE
12. It is a criminal offence to be alive and older then 18 years.
TRUE/FALSE
13. It is a criminal offence for a poor waitress earning £46 per week not to declare every 5p tip she receives.
TRUE/FALSE
14. Under present-day legislation, a multimillionaire whose real assets exceed £8million need pay less income tax than a poor £98 a week 59 year old cleaner, whose assets are under £10.
TRUE/FALSE
15. It is a criminal offence not to declare money earned from gambling.
TRUE/FALSE
16. We pay income tax in order to pay for the cost of roads and street lighting.
TRUE/FALSE
17. It is a criminal offence to bring into the country any form of goods merchandise or machinery, even though the money used to purchase them was earned abroad.
TRUE/FALSE
18. The best recommended way to live under present day tax legislation is to have all capital and no income while one is alive, and all income and no capital when one is dead.
TRUE/FALSE
19. It is a criminal offence for a building contractor to give sub-contract manual work to a school-leaver or to the unemployed.
TRUE/FALSE
20. The only way to raise revenue to run a country is by taxing income or expenditure (i.e. Income Tax, Capital Gains Tax, Value Added Tax, Customs Duty, Excise Duty).
Answers to Tax Laws Quiz
Answers to Know your Anti-Prosperity Iniquitous Tax Laws
Q1. It is a criminal offence to earn money honestly, efficiently and by hard work.
TRUE: Anyone earning money honestly, efficiently and by hard work is breaking a law entitled "The Finance Acts" - the penalty for breaking this law is a fine with a nice sounding name "Income Tax" - legalised stealing of one's income by the Government - which in Britain during 1991 was 25p per £1 earned for ordinary offenders and as much as 40p in the £1 for very hard working and efficient offenders. The fact that one does not possess enough money to pay the fine is no excuse. Failure to pay the fine can render one on summary conviction to confiscation of property, being declared bankrupt, jail or all three - classical example: Lester Piggott - Britain's best jockey.
Q2. It is a criminal offence to spend money honestly.
TRUE: Anyone purchasing goods, especially manufactured goods, from others is breaking the law. The penalty for breaking this law is a fine with the nice sounding name of V.A.T. (Victimise All Transactions) - legalised stealing of one's spending by the Government - which in Britain is 17.5%of the value of the goods, depending upon the whims and fancies of the Chancellor.
Q3. It is a criminal offence for a business, firm or company to make a profit.
TRUE: A business, firm or company that makes a profit, even by honest, efficient and hard working means is breaking the law and is liable to a fine called "Corporation Tax"- legalised stealing of Company profit by the Government. In 1991, 40% of the profit made is confiscated. But is does not end there: When the rest of the profit or balance is paid out in the form of dividends, Income Tax at the basic rate and Sur-Tax at the higher rates is charged on the income of the recipient.
Q4. It is a criminal offence to allow one's capital to increase in value.
TRUE: If capital, such as shares or property, is allowed to increase in value, even if through no fault of one's own, the law is being broken, and as such is liable to a fine called "Capital Gains Tax"- legalised stealing of one's Capital Gains by the Government - 40% of the increase in value is confiscated, even if there was no effort at all on the part of the owner in affecting this increase.
Q5. It is a criminal offence to give full-time permanent employment to anyone.
TRUE: Firms giving permanent employment to anyone are hoarding labour and are breaking the law and are liable to a fine which was called S.E.T. (Selective Employment Tax) plus the employer's share of National Insurance Contribution - legalised stealing of employers payroll by the Government -. Now, only the latter fine is payable but is greater than the combination of the two.
Q6. It is not only a criminal offence to buy a TV set, but a criminal offence to use it as well.
TRUE: The purchase of a TV set is breaking the law against "spending money honestly" and a fine called VAT - legalised stealing of one's spending is payable (in Britain 17.5% over and above the selling price). It is levied on persons breaking this law. In addition, offenders who use the TV set are liable to a further fine called "TV Licence" amounting to (in Britain 1999) £97.50 per annum on a colour set, whether or not they tune into the BBC , who receives the fees accrued from these fines.
Q7. It is a criminal offence to be wealthy.
FALSE: There is no law against being wealthy. Theoretically, if one owned £100 billion, or even half of Britain, provided one did not make a profit, one is well within the law. No fine is liable.
Q8. It is an offence to die wealthy.
TRUE: It is an offence to die wealthy, especially when one's wealth exceeds £118,000. The penalty for dying wealthy was called "Estate Duty" or "Death Duty" but now has a nicer sounding name - "Capital Transfer Tax" or "Inheritance Tax" - legalised stealing of one's beneficiaries' inheritance- 40% of the real and personal assets are confiscated and deprived from the beneficiaries.
Q9. It is a criminal offence to be unemployed.
FALSE: There is no law against being unemployed. In fact, if one wishes to live well within the law, this is the best way of living, advocated by most Governments today - so why not join the "Pool of Unemployed" which misguided economic experts erroneously believe will help keep wages and prices down. If, on the other hand, one is employed, even if one's income is well below that liable to Income Tax, a fine called "National Insurance Contribution", amounting to at least £236 (in Britain 1991) per annum if payable.
Q10. It is a criminal offence to accrue money earned from interest on a bank savings deposit account or building society.
TRUE: Any interest accrued as a result of lending money to a bank of building society is liable to a fine called "Unearned Income Tax", which can be 25% or more of the interest earned. It is also an offence not to declare same.
Q11. It is a criminal offence to let your house for rent.
TRUE: It is classed as "Unearned Income" and Income Tax is liable on same.
Q12. It is a criminal offence to be alive and older then 18 years.
TRUE: In 1991, anyone who was older than 18 had to pay a fine with a nice sounding name - "Community Charge" or "Poll Tax", even if you are unemployed, disabled and/or seriously ill. Failure to pay this fine, irrespective of your circumstances and inability to pay, can result in a prison sentence, even if you were desperately ill and on a ventilator. This law has since been abolished.
Q13. It is a criminal offence for a poor waitress earning £46 per week not to declare every 5p tip she receives.
TRUE: All gratuities, tips, etc., received by porters, taxi drivers, waiters, waitresses, barbers, hairdressers, etc must be declared for "Income Tax".
Q14. Under present-day legislation, a multimillionaire whose real assets exceed £8million need pay less income tax than a poor £98 a week 59 year old cleaner, whose assets are under £10.
TRUE: The well paid and astute accountants of a multimillionaire can easily prove that his legitimate expenses are so great that he makes no profit (if not a loss) on paper and as such is not breaking the law, and hence, is not liable to Income Tax at all. On the other hand, the 59 year cleaner earning £98 a week, (whether the cleaner can afford to live on that or not) is breaking the law by earning money, even though she is earning the money honestly, efficiently and by hard work. The cleaner is liable to the fine called "Income Tax" and can be jailed for non-payment.
Q15. It is a criminal offence not to declare money earned from gambling.
FALSE: It is not necessary for one to declare income gained from gambling because, as far as the Inland Revenue is concerned, only the organisers are liable to tax. The Government, apparently, believes that the end does justify the means. So keep on gambling.
Q16. We pay income tax in order to pay for the cost of roads and street lighting.
FALSE: Not a single penny collected from Income Tax is spent on roads. On the contrary, 90% of the funds collected from Road Tax and Tax on the Purchase of petrol and diesel is used to subsidise other Government expenditure, including salaries of uselessly employed ministries.
Q17. It is a criminal offence to bring into the country any form of goods merchandise or machinery, even though the money used to purchase them was earned abroad.
TRUE: The nice sounding name for the fine breaking this law is called "Customs Duty" and one is liable to pay this, even though the country badly need the goods and machinery to set up new industries and give work to the unemployed.
Q18. The best recommended way to live under present day tax legislation is to have all capital and no income while one is alive, and all income and no capital when one is dead.
TRUE: One of the best ways to do this is to be an unemployed gambling cheat.
Q19. It is a criminal offence for a building contractor to give sub-contract manual work to a school-leaver or to the unemployed.
TRUE: A contractor who gives sub-contract work to a school leaver or an unemployed person must, by law confiscate 25% (of the labour content) of all the money paid out to the sub-contractor and send it to the Collector of Taxes. Failure to do so makes the contractor liable for the 25% and/or fined and/or end up in prison. A sub-contractor who is able to produce a "Tax Exemption Certificate" can be paid this money without deduction. However, school leavers and the unemployed are not eligible for a Tax Exemption Certificate, no matter how perfect their tax record or reputation.
Q20. The only way to raise revenue to run a country is by taxing income or expenditure (i.e. Income Tax, Capital Gains Tax, Value Added Tax, Customs Duty, Excise Duty).
FALSE: Far greater revenue can be raised to cover all the expenses of a country (such as external and internal defence and the Social Services) without levying a single penny on income and expenditure. The other way of raising revenue is by contributing a small percentage (1%) of one's collateral. This would create a gigantic growth in true wealth and collateral of the nation. In less than two years the surplus revenue raised would be sufficient to refund the first year's revenue payers their money back with 20% inters, making it a virtually tax-less system. This is the Doctrine of Collateralism.
How money was invented
This simple fictional child's story has far reaching economic implications and laws to be learned from common sense, and is the basis of proof for the Laws of Collateralism.
Once upon a time, there were three men in a village, a shoemaker, a farmer and a tailor. No money existed at that time, and all trade was done by barter, i.e. the exchange of goods of one sort for those of another.
All was well, until one day the shoemaker ran out of corn. So he went along to the farmer and asked him to give him a bag of corn in exchange for a pair of shoes.
"I'm sorry," said the farmer, "but I already have a pair of shoes, so I can't let you have the bag of corn.".
It was a cold day, and hardly had the shoemaker left, when the farmer felt a cold shiver down his spine. "I think I'll take this bag of corn down to the tailor and get myself a warm coat in exchange," he said.
"Sorry," said the tailor when he got there. "I can't give you the coat Mr. Farmer as I have enough corn already. In any case, I need a new pair of shoes, and that's what I'm going to trade this coat for."
But when the tailor got to the shoemaker's house, he was also in for a shock. "I already have a coat, Mr. Tailor," said the shoemaker. "sorry, but you can't have the pair of shoes.".
So, there they were, three miserable and frustrated men. The shoemaker was hungry, the farmer was cold and the tailor's feet were sore. They couldn't barter anymore.
However, the shoemaker was an Inventor and an optimist - one who creates opportunities out of difficulties. He said to himself, "surely there must be a way out of this frustrating situation. I want a bag of corn from the farmer who doesn't want my shoes, the farmer wants a coat from the tailor who doesn't want his corn ad the tailor wants a pair of shoes from me and I don't want his coat.".
Suddenly, he had a brain-wave. Using his knife he fashioned three wooden sticks of exactly the same length, size and shape and marked them with an identically shaped notch. Then, calling the others together he said, "I have a solution to our problems. Look here. I have made three special sticks and I'm going to give us one each. Now if any of us requires something from the other, instead of giving goods in exchange, we will give this stick."
"Preposterous!" exclaimed the others. "Do you mean to say that for a worthless looking stick like that, you expect us to part with our valuable merchandise?"
"Yes", replied the shoemaker, "let's try it out."
"Alright" said the tailor, "here's my stick, can I have the pair of shoes I asked you for?"
"Certainly", said the shoemaker, handing him the shoes.
"Here's my stick," said the farmer to the tailor, "can I have the coat please?"
"Er, yes...", replied the tailor, handing him the coat.
"But," said the farmer, I'm left without a stick now!"
"No you're not," said the shoemaker, "you can have one of the two sticks I have in exchange for that bag of corn.".
"Why, yes, certainly. Of course you may have it." replied the farmer.
"So you see," said the shoemaker, "we have now all got what we wanted, and we still have one stick left each. Let us call these sticks MONEY."
"Yes!" they all agreed, and they lived happily ever after.
Sequel to the story of How Money was Invented.
Within a very short time, the Shoemaker, the Farmer and the Tailor began to realise what a marvellous invention they had in MONEY. They found that the more often they repeated a transaction, the more goods and services each of them were able to afford, and hence their standard of living kept going up. That is:
the faster the velocity of money and spending, the higher the standard of living for all.
The farmer and tailor were not only able to afford shoes, but boots and slippers as well. The shoemaker and farmer were each able to afford not only a coat, but other clothes as well and the shoemaker and tailor were able to buy other farm produce, like fruit, vegetables, dairy products, etc. As more people came to the village, they too were introduced to the system, and they realised that:
all persons receiving goods and services from others, must in turn provide goods and/or services required by others.
However, they also discovered something sinister - SAVING! If any one of them decided to start saving (by not spending his money through buying from the others) not only he, but the others would suffer as well. Thus, the Monetary System broke down, so
if money is taken out of circulation and consumers deprived of it, trade will come to a halt, resulting in starvation and deprivation.
They found that one stick was not enough, so they produced more. Later on, as news spread, it was taken up by the kings and rulers of many lands. Instead of wooden sticks, coins struck out of rare metals, such as gold, silver and copper were used. This had the advantage of thwarting counterfeiters as the coin's value was worth the actual weight of the metal contained.
Still later, because it was found inconvenient and unsafe to carry large amounts of coinage, PROMISSORY NOTES or paper money was issued, first by goldsmiths (who became the first bankers) and later by rulers and governments. This worked very well as long as the bankers, rulers and governments honoured their promises to print and circulate no more paper money than the gold and silver actually held by them (i.e. counterfeiting).
The Monetary Laws
Chapter 4
The Monetary Laws
The moral of the story of "How money was invented"
The three villagers in the story of "How money was invented" are economic symbols. They could represent three business firms or enterprises, or even three different nations, or any number of people, companies or nations. The four important common sense morals to be learned from this simple story are repeated below:-
The Four Monetary Laws
If money is taken out of circulation and consumers deprived of it, trade will come to a halt and there will be starvation and deprivation.
The faster money changes hands in exchange for goods and services, the higher will be the standard of living.
All persons receiving goods and/or services from others must in turn provide goods and services required by others.
When paper promissory notes or non-valuable material is used for money, the issuing authorities should never be guilty of counterfeit.
The real cause of all the economic troubles suffered now (and in the past) is that these simple Monetary Laws have been blatantly broken by successive governments of the world.
Rule 1 is broken by money being taken out of circulation by Income Tax, Sur Tax, Corporation Tax, Capital Gains Tax, taxes on interest and dividends, credit squeezes and artificially raised interest rates.
Rule 2 is broken by artificially increasing prices through taxing expenditure - sales tax, purchase tax, value added tax, customs and excise duty - these slow down the velocity of money in the mistaken belief that "by raising prices they might check inflation".
Rule 3 is broken by persistently squandering money on the salaries, wages and administration costs of wasteful and uselessly employed bureaucrats such as the Customs and Excise, Inland Revenue, large ministries NEDC government departments, admiralties and futile research projects. money is also wasted by maintaining an artificially created pool of unemployed people and then having to pay salaries (or welfare benefits) to these people for doing nothing.
Rule 4 is broken by printing more paper money (or promissory notes) than the amount of rare metals (such as gold) or COLLATERAL that they possess to back it. This leads to a run on the currency, inflation, devaluation, unemployment and recession. In many countries, the paper money is worth less than the paper it is printed on.
CHAPTER FIVE
Sabotage Assignment
or
How to sabotage your country without trying if you were Chancellor of the Exchequer
or better still
How to sabotage your country if you were Permanent Secretary to the Treasury
or even better still
How to sabotage your country if you were Chief Economic Adviser to the Treasury.
This chapter has been especially written for the sceptics who are not convinced by the answers of the Know your Iniquitous tax laws quiz (chapter one).
NOTE WELL: There is no suggestion or insinuation that any chancellors of the exchequer (past or present), or permanent secretaries to the treasury or economics advisers to the treasury have in the slightest way been a deliberate saboteur who has, with malice and forethought, tried to sabotage his country. It is the opinion of the author that all past and present chancellors of the exchequer and permanent secretaries and economic advisers to the treasury are well meaning with the best interest of their country in mind.
However, due to the misguided advice and/or primitive economic education that they have been brain washed into receiving, sabotage of the country's economy has nevertheless occurred and all by the action of just one man - The Chancellor of the Exchequer - without him even realising it, let alone admitting that he was responsible.
To appreciate this chapter, one has to image that one is living in Utopia i.e. "A land of milk and honey" no strikes, no unemployment, no recessions, no balance of trade deficits, no devaluation of the currency, but perfect harmony and prosperity.
A newly appointed Treasury is given the task to "Deliberately, with malice and forethought, sabotage the economy of Utopia by instigating inflation, recession, strikes, unemployment, balance of payment deficits and devaluation (without any blame be apportioned to them). Imagine that the Permanent Secretary to the Treasury is called Humphrey and the Chief Economic Adviser is called Bernard.
ACT ONE Scene 1:
The Chancellor of the Exchequer's office at the Treasury. The Chancellor is seated at his desk, and sitting in front of him are Humphrey and Bernard. We tune into their conversation:
Chancellor: Well as you know, this country, Utopia has been running very smoothly for quite a few years. There is no record of strikes, the rate of inflation is zero, there is no unemployment, there is a good Balance of Trade surplus and the present currency seems to be very strong. Now, you know it wasn't very easy for the three of us to get the positions we now hold, but you know sabotage assignment, have you any useful suggestions?
Humphrey: Yes, Chancellor. It has been noted that the vast majority of this country's population are extremely honest, hard working and efficient, which is why this country is so prosperous. So our first assignment is to put a stop to this. Any suggestions Bernard?
Bernard: Well Chancellor, why don't we just pass a law making it a criminal offence for anyone to earn money honestly, efficiently and by hard work and the penalty for breaking this law should be confiscation of at least 25% of one's income for ordinary offenders, rising to a confiscation of 98% of one's income for very hard working and efficient offenders?
Chancellor: Oh no! You couldn't do that! People would be up in arms in revolt. In no way would they accept such a preposterous law!
Humphrey: Yes Chancellor, I agree with you, However, there is a way round.
Chancellor: A way round? What do you mean?
HUMPHREY:
Well, if we could re-phrase the law, give it a nice-sounding name like "INCOME TAX" for ordinary offenders, which we shall describe as the Lower Income Bracket………
BERNARD:
And "SUR-TAX" for the Higher Income Bracket.
CHANCELLOR:
Excellent, and in the case of Corporation, we can call it "CORPORATION TAX".
HUMPHREY:
Yes, Chancellor. That sounds very appropriate.
CHANCELLOR:
Well, that settles it. Could you organise an Inter-Departmental Committee to draw up a new Act of Parliament, Hamphrey?
HUMPHREY:
Yes, Chancellor. Any suggestions as to what this Act should be called?
BERNARD:
What about "The Finance Act"?
CHANCELLOR:
Yes! or "The Taxes management Act".
HUMPHREY:
Yes, Chancellor. I think we'll use both titles.
ACT TWO
SCENE ONE: The same office, a year later.
CHANCELLOR:
Well, Humphrey, what have you got to report on The Finance Act?
HUMPHREY:
Pretty good, Chancellor. Our Committee has doen an excellent job in brain-washing the working classes and the hard working entrepreneurs and businessmen alike, that this is an excellent law, and that all loyal citizens must pay Income Tax.
BERNARD:
We seem to have got our maximum support from t he Trade Unions who we have managed to hoodwink into believing that the heaviest penalties and confiscation of income falls on the very rich and profiteers.
CHANCELLOR:
Well, if that's true, how come we didn't have any opposition from the House of Lords?
HUMPHREY:
Well, not exactly, Chancellor. You see, we did manage to convince some of the really rich objectors in the House of Lords that we have provided loop-holes for them.
BERNARD:
Yes, Chancellor. As long as the really rich do not try to become any richer, or can prove with the astute accountants, that they are not becoming richer, we have made provisions to exempt them from any Income Tax.
CHANCELLOR:
Yes, I did wonder why they supported our Bill in the Lords. Anyway, Humphrey, your report on the Sabotage effects?
HUMPHREY:
Yes, Chancellor. We have created quite a bit of chaos, due to the confiscation of part of their salaries by Income Tax, the Unions are now blaming the employers for not paying them enough money and quite a few strikes have taken place.
BERNARD:
Yes! Also because the public have less money to spend on the goods and services of others, this has caused widespread recession and some firms have had to make quite a few of their employees redundant.
HUMPHREY:
As less goods are being bought, the overheads of mass-produced goods are having to be spread over fewer goods and this has lead to a certain amount of inflation, Chancellor.
CHANCELLOR:
Excellent. But I am still not satisfied with the sabotage effects. There stills seems to be far too much spending going on, which is still providing work for a substantial number of people. How can we stop it?
BERNARD:
Well, Chancellor, why don't we make it a criminal offence to "spend money"? We could impose a penalty of at least 17.5% of a Sale and/or Transaction.
CHANCELLOR:
Do you really think the public will stand for that? You'd be victimising all transactions and trading!
BERNARD:
That's right, Chancellor. That's exactly what we want to do - "Victimise All Trading". We could even call it V.A.T.
CHANCELLOR:
Well, I don't think the Public would accept that. What do you think Humphrey?
HUMPHREY:
Not unless we give it a nice sounding name like either Purchase Tax, or Sales Tax.
CHANCELLOR:
I prefer V.A.T. It reminds me of my favourite refreshment.
HUMPHREY:
Alright, Chancellor. In that case, how about "Value Added Tax"?
CHANCELLOR:
Excellent, Humphrey. Get your Inter-Departmental Finance Committee to draft out a new Act of Parliament straight away.
ACT THREE
SCENE ONE: The same office and characters, a year later.
CHANCELLOR:
Well, Humphrey and Bernard, your report on the economy?
HUMPHREY:
Excellent, excellent, Chancellor. our plans to wreck this country with the introduction of the "Victimise All Transactions" Law seems to have gone down very well, and it having excellent results.
BERNARD:
Yes, Chancellor. We have managed to brain-wash the Unions and General Public into believing that only the rich and people with a lot of surplus money have to pay this tax, and the more people spend, the more tax they would have to pay.
CHANCELLOR:
Really? Very good.
HUMPHREY:
Yes, Chancellor. The sabotage to the economy by this law alone is incalculable. Because we have artificially increased the price of goods by the "Value Added Tax", the sales of goods in the shops have slumped to such an all-time low that we have caused a record number of companies and people to bankrupt and close down. The unemployment figures are even worse than the depression of the 1930's and even well-known household names such as Hoovers have had to close down. The best part is that no-one has ever blamed us"
CHANCELLOR:
Really? You mean nobody has smelt a rat yet?
BERNARD:
No Chancellor. no-one. In fact, the men from the Unions are blaming the Management for failure to risk their capital and the Management in turn are blaming the Unions for asking for too high wage increases.
CHANCELLOR:
I can hardly believe it!
HUMPHREY:
Yes, Chancellor, when we confiscate more than 25% of their hard earned income, not a word of disagreement has come from any of the top Union leaders, yet they will pull their men out on strikes over just a 2% wage claim dispute!
CHANCELLOR:
Well, I am very pleased with the work of you boys. I think we can keep this up forever, just as long as the brain-washed economists, media, politicians and the general public never hear or, or turn a deaf ear to the antidote, anti-sabotage doctrine of Collateralism.
THE FIVE ECONOMIC DOCTRINES
Known Doctrines
1. Communism
2. Capitalism
3. Socialism - A compromise between 1 & 2
Unknown Doctrines
4. Oppressionism - the Evil Third World Doctrine
5. Collateralism - the Optimised Doctrine of Prosperity
KNOWN DOCTRINES
At the present time there are only three known doctrines - COMMUNISM, CAPITALISM AND SOCIALISM - a compromise between the former two. Looking at the circular chart, Communism and Capitalism are diametrically opposite each other. These are extreme doctrines, but both have good and evil tendencies.
1. COMMUNISM
The "good" or positive tendencies (or preferences) of Communism are "A maximum of welfare state benefits and social services for all". This is good as it ensures that no-one should be lacking in any basic necessity - health, education, food, shelter, medical attention, etc -irrespective of whether they are poor, disabled, old aged pensioners, unemployed or able-bodied people.
Unfortunately, the evil or negative tendencies (or decadent preferences) in the Communist system is "a minimum of incentives for individuals to become richer". This, by its very concept, cannot be good or a productive preference, as in practice, it means that no matter how hard or efficiently one works, one is not allowed to get any more in return than others not working as hard. There are no incentives for people to work to the maximum of their ability: no incentives for inventors to invent, and no incentives for businessmen or entrepreneurs to start up new productive industries and to create job opportunities to improve comfort and living standards for others.
True Communism, as described by this definition is hardly practised any more; even the few diehards like Red China, Vietnam and Russia have started incentive bonus schemes - looked down upon by true Communists as Capitalist.
2. CAPITALISM
The preference of true Capitalism are just the opposite of Communism, namely "a minimum of social services and welfare state benefits and a maximum of incentives for individuals to become richer". The latter is good and productive because it encourages businessmen and entrepreneurs to start up efficient and productive industries and inventors to develop new ideas for the benefit of the rest of the nation's comforts and living standards. The former preferences, namely, "a minimum of social services and welfare state benefits" cannot be a good preferences as contrary to some short-sighted and hard hearted individuals contention that it would put an end to laziness and social security scroungers, if people are deprived of their basic minimum standards of living to the extent that their children and handicapped dependants are hungry, cold and/or shelterless, some of those people may, out of self-preservation, have no alternative but to plunder, loot, cheat and steel. There is plenty of evidence of this all over the world, especially in the developing countries which are without social services or welfare state benefits. True Capitalism, as described by this definition is rarely found nowadays.
3. SOCIALISM - "A COMPROMISE"
Most countries in the world today have recognised that there are both good and evil features in Communist and Capitalist ideals and consequently have opted for a "compromise" between them. This is known as SOCIALISM, which by definition, is "some welfare state benefits and social services and, in order to pay for same, penalise incentives to become richer", namely Income Tax, Corporation Tax, Value Added Tax, Capital Gains Tax etc.
Contrary to popular belief, the United States of America is a Socialist country as it penalises individuals incentives to become richer. So also are Britain and former Yugoslavia. Former Yugoslavia was probably closer to the Communist side of the Socialist spectrum, whilst the USA is closer to the Capitalist side. Britain could be placed about mid-way. The British Conservative Party is probably more Socialist, if not equal to the British Labour Party, because of their taxation policies. In any case, it is the socialist bureaucrats in the Treasury, BCI and TUC that run the country, not the Minister of Party in power.
THE EVILS OF SOCIALIST COMPROMISING
When compromising, not only the lesser of two goods or benefits have to be accepted, but also the lesser of two evils. To opt for the evils of both Communist and Capitalist systems leads to the worst of economic consequences, namely unemployment, inflation, recession, balance of payment problems, strikes, go-slows, chaos, coups d'état's, and often bloody revolution. Ever since voters can remember, in every election, a new Government is voted in, largely due to an unpopularity vote, with a lot of empty promises that they are going to put things right, but things go from bad to worse and yesterday's recession is called (by the last ousted Government) a boom, compared to today's crisis. Unfortunately, we have been brainwashed by Politicians into believing that "belt tightening sacrifices" and "compromise" are the only solutions. However, there is no need to compromise in life. A word, known only to a few is "OPTIMISE".
Unknown Doctrines
4. OPPRESSIONISM - THE EVIL THIRD WORLD DOCTRINE
There is an unknown evil economic doctrine of Oppressionism.
Oppressionism combines the worst of Communism and Capitalism - minimum incentives to become richer and a minimum of welfare and social services.
Surprisingly, even in 2004, Oppressionism is unknowingly practised in most Third World countries like India, Pakistan, Bangladesh and African states. They inherited the anti-prosperity taxation of their former Colonialist Socialist rulers, preventing wealth creation, they do not provide welfare & social services and have introduced a Wealth Tax to impoverish the Existing and aspiring rich. As a result little or no economic progress can take place. Oppressionist countries will remain "poor third world countries" holding out their begging bowls to the so called 1st world, especially in times of drought and famine; illogically blaming corruption for their plight. Illogically in the 1st world - USA & Europe corruption is even more abundant.
So corruption cannot be the significant cause for poverty of the masses.
5. COLLATERALISM - THE OPTIMISED DOCTRINE OF PROSPERITY
The Collateralist doctrine preaches that instead of compromising between Communism and Capitalism, we should optimise the two to create COLLATERALISM - "a maximum of welfare state benefits and social services for all and a maximum of incentives for individuals to become richer". Combine these two preferences together to form the best system consisting of all the advantages with no adverse effects; the best of Communism and the best of Capitalism - vis the Utopian Doctrine of Collateralism.
Penalisation of incentives to become richer, namely Income Tax, VAT etc are abolished. The revenue needed to pay for a maximum of welfare state benefits and social services is raised from Collateral. Individuals contribute no more than 1% of their Collateral every year to the state, whilst being allowed to keep all profits and earnings, the revenue collected would be fare greater than all the taxes raised today, but must more than this, real economic growth - growth of Gross National Collateral (freed from the oppressive shackles of anti-prosperity taxes on income and expenditure) would be so great that the state income in two years, could afford to pay back the original Collateral Ensurance paid by individuals, together with 20% interest, making the system a virtually tax-free state.
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