Project 2075

GROSS REVENUE TAX (GRT)

Corporate accountability without killing business

The Core Innovation

The GRT replaces all federal income taxes with a simple point-of-sale collection that is extremely difficult to evade.

Current System (Broken)

  • Complex tax code (74,000+ pages)
  • $400B/year in evasion
  • Armies of accountants and lawyers
  • Audits, penalties, fear
  • Corporations pay 0% through loopholes
  • Working families pay more

GRT System (Accountability)

  • One rate, collected at point of sale
  • Zero evasion possible
  • No accountants needed
  • Rare audits, simple filing
  • Everyone pays the same rate
  • Rate declines over time

Rate Progression

As efficiency gains compound and the Alliance expands, the rate declines:

Year 1
13.2%
Transition period
Year 10
7.0%
Efficiency gains
Year 30
5.5%
Alliance expansion
Year 70+
2.5%
Permanent rate

How It Works

Point-of-Sale Collection

Every transaction automatically includes GRT. No filing, no reporting, no compliance burden.

  • Buy groceries → 13.2% collected automatically
  • Pay rent → 13.2% collected automatically
  • Business purchase → 13.2% collected automatically
  • No deductions, no exemptions, extremely limited loopholes

Why Corporations Can't Evade

Current corporate tax evasion relies on:

  • Transfer pricing → Irrelevant (GRT on final sale only)
  • Offshore profits → Irrelevant (GRT on US sales)
  • Depreciation tricks → Irrelevant (no profit calculation)
  • Stock compensation → Irrelevant (GRT on revenue)
  • Charitable deductions → Irrelevant (no deductions exist)

Why Businesses Still Win

Factor Impact
Minimal compliance costs Save $50B+/year in accounting
Minimal audits Minimal legal risk
Richer customers +160% worker purchasing power
Larger market 730M Alliance consumers
Declining rate 13.2% → 2.5% over time
Healthier workforce Universal healthcare

Result: Corporate profits +360% over 30 years

Tax Credits & Debits: Wages Track Productivity

The key to non-inflationary growth: wages rise with output. This is the primary criterion. Additional bonuses reward profit-sharing and domestic production.

📉 GRT Credits (Lower Rate)

PRIMARY (Required for any bonus):

  • Wages track productivity: Employee compensation rises with output → -10.5% rate reduction

BONUS (Additional reductions):

  • Profit-sharing: Workers receive ownership stake → additional -2%
  • Domestic production: Operations in Alliance nations → additional -2%

Maximum: 13.2% → ~9.5% (with all criteria)

📈 GRT Debits (Higher Rate)

Companies pay penalties when wages lag productivity:

  • Wages below productivity growth: +10% penalty (13.2% → 14.5%)
  • Wages stagnant while profits rise: +15% penalty (→ 15.2%)
  • Offshore production to avoid wages: +10% penalty (adds +1.4%)

Maximum penalty: 13.2% → 17.2%

Effective Rate Examples

Company Behavior Adjustment Effective Rate
Full compliance (wages track productivity + profit-sharing + domestic) -10.5% -2% -2% ~9.5%
Wages track productivity only -10.5% bonus ~11.8%
Baseline (no adjustment) Neutral 13.2%
Wages lag productivity +10% penalty ~14.5%
Wages stagnant while profits rise +15% penalty ~15.2%
All violations (wages lag + offshore) +25-30% penalty ~17.2%

Why Wages = Productivity Matters

  • Inflation control: When wages match output, purchasing power rises without price pressure
  • No mandates: Companies choose compensation; tax rate reflects that choice
  • Self-enforcing: Payroll and revenue data already exists
  • Transparent: Clear formula, predictable outcomes
  • Aligned incentives: Lower taxes = higher wages = stronger consumer demand = higher profits

When output rises, wages rise—not because it's mandated, but because it's the rational economic choice.

Closing the "Buy, Borrow, Die" Loophole

Under current tax law, billionaires can accumulate wealth, borrow against it tax-free, and pass it to heirs with the gains never taxed. AIP closes this loophole.

🚫 Current System (The Loophole)

  • Buy: Purchase $1M in stock
  • Hold: Stock grows to $10M (no tax)
  • Borrow: Take $5M loan against stock (no tax—it's debt)
  • Spend: Live on loan proceeds
  • Die: Heirs inherit, basis resets

Result: $9M gain NEVER taxed

✓ AIP System (Closed)

  • Buy: Purchase $1M in stock
  • Hold: Stock grows to $10M (no tax)
  • Borrow > $1M: GRT on proportional gain
  • Spend: GRT applies at point of sale
  • Die: Full realization—no step-up basis

Result: All gains eventually taxed

Two Simple Rules

Rule Threshold Treatment
Asset-Backed Loans Loans > $1M secured by appreciated assets GRT applies to proportional unrealized gain
Death Realization All unrealized gains at death Full realization event (no step-up basis)

Example: Borrow $5M against $10M stock (cost basis $1M). Proportional gain = $4.5M. GRT = $594K (13.2%). Still far simpler than current capital gains system—and no escape at death.

Revenue Comparison

Revenue Source Current System GRT System (Year 1)
Individual Income Tax $2.2T $0 (eliminated)
Corporate Income Tax $0.4T $0 (eliminated)
GRT (13.2% on $46T GDP) $0 $6.1T
Payroll Tax (unchanged) $1.5T $1.5T
Other (fees, tariffs, etc.) $0.5T $0.5T
TOTAL $4.6T $8.1T

GRT generates 76% more revenue while eliminating all income tax filing.

GRT Revenue Model

The GRT rate automatically adjusts based on spending needs—here's how it works

📈 What INCREASES the GRT Rate

Factor Example Rate Impact
New government programs Congress adds $200B infrastructure bill +0.4%
Economic recession GDP drops 5%, revenue falls $300B +0.6%
Emergency spending Natural disaster requires $100B +0.2% (temporary)
Higher healthcare costs Medical costs rise faster than projected +0.1-0.3%

⚠️ Important: Rate increases only occur during RECOVERY, never during crisis. See Stability Reserve below.

🛡️ Stability Reserve (Counter-Cyclical Protection)

Raising taxes during a crisis deepens recessions. The Stability Reserve prevents this:

Parameter Specification
Target Size $2T (4% of GDP, adjusts with economy)
Trigger GDP decline >2% OR declared emergency
Rule Reserve MUST be used before any rate increase
Repayment 7 years max, +0.3-0.5% surcharge during recovery

Real World Example: COVID cost $2T. Under AIP: Reserve depletes (rate stays 13.2%), then rebuilds over 7 years at 13.5% during recovery. No pro-cyclical damage.

📉 What DECREASES the GRT Rate

Factor Example Rate Impact
Debt elimination No more $1T+ annual interest payments -2.0%
Economic growth GDP grows 4%, revenue increases $250B -0.5%
Stability Account recoveries Deceased citizens' accounts return $500B/year -1.0%
Healthcare efficiency Admin costs drop from 31% to 15% -0.5%
Military reduction $850B → $200B over 10 years -1.3%
Alliance economies of scale 15 nations sharing infrastructure costs -0.5%

Real World Example: By Year 30, debt interest savings ($1T/year) + Stability Account recoveries ($500B/year) + military reduction ($650B/year) = $2.15T less spending. This allows GRT to drop from 13.2% to ~7%.

⚖️ The Spending = Tax Rule

Unlike current budgets, GRT enforces fiscal discipline automatically:

❌ Current System

Congress spends $6.5T, collects $4.6T, borrows $1.9T. Debt grows forever.

✓ GRT System

Congress sets spending, GRT rate adjusts to collect exactly that amount. Zero deficit.

Politicians must choose: higher spending = higher visible tax rate. Voters see the cost immediately.

🔮 30-Year Rate Trajectory

Year GRT Rate Why
Year 1 13.2% Full program launch + debt servicing
Year 10 10.5% Debt reduced 50%, healthcare efficiency gains
Year 20 8.2% Debt nearly eliminated, military at $200B
Year 30 7.0% Debt-free + Stability Account recoveries begin
Year 65+ 2.5% Full Stability Account maturity, system self-funds

Common Questions

Isn't 13.2% regressive?

No. The rate applies to all transactions equally, but the poor pay net-zero because:

  • Stability Account accounts provide income floor
  • Universal healthcare eliminates medical costs
  • Universal education eliminates student debt
  • Net effect: massive wealth transfer to working families

What about black markets?

Cash transactions still exist, but:

  • Digital payments dominate (95%+ of GDP)
  • backend infrastructure tracks all legitimate commerce
  • 5% cash economy is acceptable leakage (vs 15% current)

What about exports?

Exports are GRT-exempt to maintain competitiveness. Only domestic consumption is taxed.

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