Home > Commerce > Improving Sales Tax Collection While Reducing Drug Dealing (Just an idea)

Improving Sales Tax Collection While Reducing Drug Dealing (Just an idea)

We are faced with critical federal budget issues both on a federal level and on a state level.  America needs to be smarter with how we manage and control the governmental resources at our disposal.  The federal government can assist the states with increased revenue by providing better tools to track American currency.  Since 1929 the US dollar has been traceable by serial number.  However, the technology of today can now providing better ways to utilize and process this information.  The federal government needs to modify printed money in a way that converts the serial number to a machine readable bar-code with human readable information also included.

What is the purpose of adding a bar-code to money?  Once this is done the states can transition to new more efficient tools to collect and manage tax revenue.  For instance a state could create a process that discounts sales tax for items scanned at the  “point of purchase”.  To use Maryland as an example we could adjust the sales taxes down from  6% to 5.75%.  The scanned serial numbers are transmitted through a standard XML interface to a central site that aggregates transactions by EIN, date/time, location (Geo-locate).  There is a huge amount of the local economy that simply doesn’t pay the sales taxes to the government because they don’t report the sales tax or the full transaction as a whole.  For companies that don’t scan at the point of purchase the government would increase the sales tax to 16%.  This would not happen all at once but over a period of time.  This means that they either scan it upon purchase or offer their products at a price that puts them at a disadvantage to their customers who have to pay extra at the register.  Eventually this extra tax will manifest in people attempting to avoid paying the tax all together which will expose the retailer to provable tax fraud or force the retailer to use a system that more accurately prevents the opportunity for fraud.  The additional benefits to this will include tracking dirty money and exposing counterfeit money quickly.  For example, imagine if you arrested a young kid for concealing drugs, the police could track the actual money used in the transaction and flag that money when it re-appears during a future monetary exchange.  If a bill appears in Baltimore and Tucson at approximately the same time it would evident that at least one of the notes is fraudulent.  Notifications can be sent out immediately to retailers who bear the liability of accepting bogus dollars.  Creating visibility to how and where our currency is being used will allow us to better confirm that everyone is contributing to the costs of our society.
Categories: Commerce
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