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Essay by:Harrison Stone
Emporia State University
The economy has suffered a massive deficit of over 3 trillion dollars on the last few years. The most logical task for getting our economy out of debt is to increase a tax and stop borrowing money from other countries. How many of you consumers notice the extra cents off the next whole dollar you don’t spend on every purchase? My plan can be considered a tax raise but it is not a set tax increase, it can be different for every purchase, and you will never be charged an extra dollar on your purchase. My proposal is simple, not to say people will not be upset with it but most people will not even notice it. My proposal is actually used in a different manner in today’s society. There is a credit card, I believe it is Chase TM, that takes the difference of your purchase and the next whole dollar, rounded up, and moves it to a savings account through Chase TM. I figured we could use the same concept except apply it to every purchase/transaction made in the United States every year.
An example of my proposal in action is a college student craves a late night snack and decides to drive through a local but anonymous fast food restaurant. After ordering a combo meal the cashier tells the customer the total is $5.28. Instead of having the 28/¬100 of a dollar, my proposal will round up to the next whole dollar. Instead, the total would be $6 even and the 72 cents collected will go straight to the government. I call this plan the “Whole Dollar Solution.” This proposal will be use on every single transaction in the country. Granted, some purchases would amount to $5.99 and the government would only collect one cent but if this proposal was used on every single purchase then the government could collect a lot of extra money from the population.
Most of the general population would not notice this occurring very often, especially if they buy a lot of goods in one purchase. Let’s say an individual buys groceries that total to $204.56. The total would then be rung up as $205 and that extra money would be collected, but the consumer would not be very affected by it. This could also make the financial lives of the consumers easier because they are balancing their bank accounts with whole dollar amounts. This would eliminate many arithmetic errors made while balancing one’s bank account and possible decrease the amount of overdrafts by bank account holders.
This is an incalculable amount of money since there is no easy way of tracking every purchase of last year and figuring out how much money that is potentially there to collect and help out our deficit. But if one individual made 20 purchases in one week, averaging 10 cents a purchase, then from that one individual the government would collect two dollars that week. Use that average for the entire year, 52 weeks multiplied by the 2 dollars, the government would collect 104 dollars from this one individual in one year. There are more than 304 million people currently registered and residing in the United States. Here is where the money kicks in, 304 million people with the same average as the previously mentioned individual will total in over 31 billion dollars in one year. This amount is entirely hypothesized and has no credibility of truth but it is a reasonable number for calculations.
This proposal can accumulate a very large sum of money to put towards the national debt. The example above only counts the citizens in this country that are actually registered by the U.S. Census, which we all know is not all of the people in this nation. It also does not count the tourism that America experiences because their purchases as well would count toward our collections. Quite honestly the average of ten cents per purchase is low considering how many transactions are currently within ten cents of a dollar before tax. I believe that an average of 30 cents is more reasonable but I was just making an example. Just for my satisfaction I ran the same math as the previous example, only using the 30 cent average instead of the 10 cents. After calculating this, the sum of money for one entire year would be over 94 billion dollars.
There are a few objections to this proposal that I can imagine but the solutions simple. There are many things in this economy that cost 99 cents. So instead of paying $1.06 for an item you would have to pay two whole dollars for it. Now there would have to be a few clauses put into action that would eliminate this anomaly. We would have to just regulate cooperation’s resale prices by illegalizing the price of anything that close the dollar, up to five dollars. Example: an item cannot cost $4.99; however, it can cost $5.99. This clause insures that you will not be ridiculously overcharged for something so low in price. Instead, these items costing less than $4.99 before taxes must be set back to an amount that will not exceed the next dollar amount after taxes set in. Example: an item that was originally $4.99 must be cut back to $4.59
This plan of action I feel is reasonable and effective. It doesn't take a whole lot of money from each individual at one time but using the vast population of our country instead. Granted, my proposal would not solve our deficit in one year or even 5 but at this point the economy needs all the help it can get. I believe my plan is simple enough to be used without a large grace period needed to get the general population familiar with the process. I understand there are many intelligent solutions being proposed, but sometimes simplicity is the best solution.
»A new report finds the main problem in getting the public to deal with our fiscal problems isn't opposition to tax increases or spending cuts -- it's their lack of trust in the government to spend their money wisely.