We still have one last bonus: Cotas = Consolidated Tax Spending. This feature will stand as a ROOPA trade mark. Cotas will be applied to every possible industry. ROOPA will consolidate 85% of all tax revenues of each industry and place it into a single program. This program will be dedicated to reducing the social cost of that industry. Washington can no longer touch these tax revenues for any other purpose but to help reduce that industry’s’ social costs.
Tobacco offers a great example of how Cotas would work. ROOPA would consolidate 85% of all tobacco revenues raised from smoker’s taxes and insurance premiums. All this money will be place into a single program. This program would be dedicated to developing health care treatments for smokers.
The tax and insurance revenue raised from smokers is estimated at between $30 to $60 billion a year (depending upon your chosen study). The averaged figure is $45 billion. This gives us a new, half trillion dollar industry over the next decade. This half trillion will be dedicated to beating smoking related illnesses. The ‘variables’ may change (amount of tax revenue), but the template’s Equation remains the same: 85% of all tobacco revenue is now invested into smoker’s health care - exclusively.
This new Cotas program will consolidate industry bargaining power, resources and expertise. Imagine the tobacco industry negotiating with pharmaceutical and insurance companies in place of politicians. Tobacco companies will be more effective in negotiating real savings over today’s sweet heart gov’t contracts for insurance and pharmaceutical companies.
HMO’s look to reduce medical costs. This is much different then looking to reduce social costs. Under ROOPA, the tobacco industry will look for ways to reduce their smokers’ social costs. The industry will look for these savings through better health care remedies and service efficiencies, not just service reductions as HMO’s do today.
(Need a chart here for paragraph below.)
Cotas will lead to new technology and service efficiencies. This in turn will reduce health care costs. A small 5% annual reduction would cut tobacco related cost by 50% over the next decade.
Let’s say tobacco’s taxes equaled just 50% of smoking’s entire social cost. This small 5% a year reduction would allow tobacco revenues to cover all smoking related expenses within the decade.
This is the reason ROOPA is not entirely focused on having each industry cover all their social cost. ROOPA reviews the long term prospects and looks to see how an industry can gradually reduce their costs over the decade(s).
*These examples on tobacco and alcohol demonstrate how simple and yet comprehensive our policy reviews can be. We need only follow along this road of social costs. Social costs have a way of highlighting most every issue on a given product and does so with finer accuracy, broader perspective and better context. Most reform measures focus on a single facet of an issue and just as often, do so at the expense of other aspects of the problem. So we find a national movement against drunk driving, but not one for alcoholics. Or we will see an effort to stop teenage smoking, but over look comprehensive smoker’s health care programs. In contrast, ROOPA’s methods uncover most every issue of a topic and does so with balance and regard to the other items associated with the topic.
*Now contrast this ROOPA science based model against the arts and philosophy like political traditions of liberal versus conservative posturing that drives Washington policy. Today’s system is left gutting programs for DUI’s and alcoholics while still charging more in taxes on beverages and cigarettes. Republicans cut the programs while democrats keep adding on more taxes. We end up with the worse from both parties tax systems. ROOPA out performs these political traditions of tax cuts versus gov’t services. ROOPA allows us an easy to identify, simple to follow, road map for developing coherent, proactive and fair handed programs. We offer a number of demonstrations in the book to showcase the host of new options using this social cost based system.
ROOPA will also automate much of our tax system. This, in turn, allows us to eliminate the bulk of gov’t tampering. Remove this political tempering and you remove much of the corruption and ineptitude that goes along with it.
ROOPA presents us a tax system that is fair, personalized, interactive and far more effective in raising and dispersing revenues than any of today’s other budgeting and tax models. ROOPA presents something that has the justice of a social cause and yet provides the economic savvy suited to the challenges of a 21st Century world. ROOPA is a one stop, all purpose, economic template that can automate much of our budgeting and taxes into the next generation of America’s social policy.
Here’s the tax reform you’ve been waiting for. Welcome to ROOPA.
Editor’s Notes:
There has been a common reservation about ROOPA. That is the issue of fairness. Americans have an inbred commitment to justice. Anything that appears to be unfair penalty is resisted. This communal sense for the underdog lies at the heart of our most beautiful accomplishments as a country.
Some people are uncomfortable singling out lifestyle preferences like smoking or drinking. They feel these things should not be politically managed. ROOPA agrees. Gov’t tampering is most often justified by an activities social cost. Remove this social cost and you remove a primary justification for gov’t intervention. However, the gov’t takes so much money in taxes, there is less and less money left over to cover the things we want and need. ROOPA’s answer is simple. Reduce our tax rate. Then we can cover our own social costs in place of these higher taxes.
Gov’t keeps adding on more taxes in the name of covering the growing number of programs. If we cover those same programs for ourselves, the gov’t loses its mandate to charge us for them. We can afford to do this if we can use our own tax dollars and designate them to these programs ourselves. That is all ROOPA is proposing.
The concern to fairness sometimes runs at cross purposes. For example, some are uncomfortable with ROOPA’s DUI price tag. No matter that these drivers would pay little more in a ROOPA plan then they pay in taxes today. Never mind that their taxes again drop by half from today’s tax rate once their DUI is paid in full. These critics do not like the idea of someone being charged this much money for a DUI even if it is a better deal for the driver. However, that is our point. Today’s system charges us a higher penalty even if the specific items like DUI’s appear to cost less.
The logic of these critics goes something like this: if the cost of DUI is shared between all of us, it is no longer a penalty. In their mind, the penalty somehow dissipates. The result however is becoming apparent. Politicians keep adding on an ever growing number of social costs to our tax and insurance premiums.
Insurance has become our culture’s dumping ground for every special-interest favor. Politicians allow special interest groups to muddle the real social cost of their favored industry. This leaves these costs pushed to the back end. Taxes and insurance are left picking up the final tab. The mounting damage shows up in healthcares’ exploding premiums against our dwindling benefits.
*Insurance is the dark closet of our economic policies. Therein lies the skeletons of most every political favor. We find everything from the dramatic like global warming; to the mundane like junk food’s epidemic or work related injuries. These social costs have stacked so high that it has already knocked out nearly fifty million Americas from affording any health care insurance. The rest of us have our benefits cut each year along side higher premiums. The weight of these liabilities are moving on to gradually crush American enterprise and the country’s remaining middle class. The public response is worse than the politicians. People are consigning themselves to the corruption and mismanagement of this system: “I can’t change the system, I don’t know economics, I avoid politics.”
Now contrast this to ROOPA. The cost of a DIU is $30,000 and should be paid by the DUI offender. Suddenly, we see this skepticism about the validity of this cost as well as the fairness of it. This my friends is the whole point. Adding this cost to our normal tax bill isolates the tab and holds it up to public scrutiny. We will instantly have this active, wary, skepticism so direly missing today’s.
The country is living by the old adage: “out of sight, out of mind.” ROOPA removes the cradle of this apathy. ROOPA exposes each issue to this broad, on-going, public scrutiny. Politicians can no longer just toss the cost on the back end to be paid by ‘everyone.’ ROOPA re-activates our role to take up our rights, rewards and responsibility of managing our gov’t. ROOPA has us begin by managing our own lives. Therefore, ROOPA is the definition of Economic Democracy.
People are actually happy to pay more to improve services associated with their interest. 80% of those polled would be willing to pay more in alcohol taxes if used for alcohol related programs. ROOPA replaces our penalty based tax and fine system with something akin to a voluntary fee. This fee is set aside and now directed to your own preferences. The concept of a non-penalty based tax system seems foreign to us after centuries of abuse.
*ROOPA will provide each tax payer a discretionary tax in which they decide by choice or action which programs to channel up to 50% of their taxes. If you are a smoker, you will know that up to 50% of your taxes are going directly for treating you. Should you fall sick from smoking, you are covered. If you are a sexually promiscuous woman, 50% of your taxes will now be dedicated to treating sexually related issues. The bulk of discretionary spending would be left to each tax payer.
The flip side of course is that you have removed up to 50% of the gov’t’s involvement. 50% of all gov’t corruption, incompetence and corresponding political trauma is removed along with it. Economic democracy means replacing the politicians’ preferences with those of the people. ROOPA finally brings this democratic mold into our tax and social policy system at long last. ROOPA is the very ideal of Economic democracy.
*However, some people simply don’t like that some will have to pay more in taxes than others. That is fine too. We don’t have to cut taxes by half and then add the social cost on top. If this makes people uncomfortable, we can skip this whole process. We can instead keep today’s sliding income tax rate just as it is. ROOPA would then let you decide how 50% of those taxes are spent. This approach of course would be easier to institute. If you have no other ROOPA fee, you decide how the tax difference is spent. In this way, the sense of fairness is in tack. All of us will pay the same higher tax rate, but given more say in how the money is spent. This would work just as well.
The real point should be obvious. ROOPA provides us a host of new ways to look over the issues and discover new worlds of possibilities. It may be comparable to communism versus democracy. Democracy simple taps more possibilities because it is people based rather than committee. This is the advantage of democracy. Welcome to Economic Democracy.
