**The National Economic Stabilization and Recovery Act** as proposed by
Dr. Harvey Barnard, PhD

The NESARA Institute

<http://nesara.org/bill/>

P.O. Box 70

Greenwell Springs, LA 70739

\(225\) 634-3228

The NESARA Discussion Board

An online community organization

in association with the NESARA Institute elects the following submission
by:

Ryan Kingsly

Administrator

NESARA Discussion Board

<http://www.thewordfiles.com/nesara/>

<nesara@thewordfiles.com>

April 26, 2005**\
**

Summary

"True tax reform is futile without reform of the current monetary system
and its policies." This statement, written by Dr. Harvey Barnard (PhD in
Applied Science with an emphasis in Systems Philosophy) has captured the
essence of the current financial woes of our nation. Tax reform, though
a nice bandage for solving things temporarily, does not in itself
provide the remedy this nation needs to combat a rising deficit, a
rising trade imbalance, a rising public debt, and rising inflation.

Only by reforming both parts of our nation's economy, the fiscal
policies, as well as its monetary policies, can the nation recover from
decades of waste, bloated government budgets, personal spending habits,
and continual cycles of serious recessions that hurt our economy and our
national strength.

No one change is perfect, and the changes that do need to me made are
too extensive as to be practically applicable in any single
administration. What is needed is a transitional solution. Not a band
aid. Only the National Economic Stabilization and Recovery Act as
proposed by Dr. Harvey Barnard at the NESARA Institute at
[http://nesara.org](http://nesara.org/), has presented itself as the
practical transition this nation needs, and we ask the President's
Advisory Panel on Tax Reform to take a serious look at its proposal.

Sincerely,

Ryan Kingsly

Administrator

The NESARA Discussion Board\
<http://www.thewordfiles.com/nesara/>

**The National Economic Stabilization and Recovery Act** as proposed by
Dr. Harvey Barnard, PhD

<http://nesara.org/bill/>

Contents of Proposal for Comprehensive Reform

Identification and Cover Sheet

Summary

Contents of Proposal

I.  Description of Proposal

    a.  The Tax Base

    b.  Exemptions, Deductions, Credits, and Exclusions

    c.  Tax Rates

    d.  Distribution of Tax Burden

        i.  Provisions for Relief of Low Income Individuals

    e.  Treatment of Charitable Giving

    f.  Treatment of Home Ownership

    g.  Collection Methods

    h.  Treatment of Businesses

II. Impact of Proposal Relative to Current System

    a.  Simplicity

        i.  Transparency

        ii. Stability

    b.  Fairness

    c.  Economic Growth and Competitiveness

    d.  Compliance and Administrative Costs

III. Transition, Tradeoffs, and Special Issues

     a.  Impact of Transistion

     b.  Tradeoffs

     c.  Special Issues and Considerations

IV. Conclusion

I. Description of Proposal

> This proposal will primarily focus on the fiscal reform provisions of
> the full NESARA draft at <http://nesara.org/bill/>

a.  **The Tax Base**

> All non-exempt retail transactions performed within the jurisdiction
> of the United States.

b.  **Exemptions, Deductions, Credits, and Exclusions**

    i.  The necessities of life are excluded from the consumption tax.
        The necessities of life are defined as groceries, rents, leases,
        insurances, and medical services.

    ii. Charities are exempt if their purchases are for non-profit,
        non-competitive use.

    iii. Initial issues of stocks and bonds are exempt.

    iv. Government purchases are exempt.

    v.  Government services such as licenses, passports, etc., are
        exempt.

    vi. Bake sales, garage sales, and other small ventures, as long as
        they are not commercially frequent activities are exempt.

c.  **Tax Rates**

    i.  A revenue neutral National Consumption Tax Rate of 14%

    ii. Secondary Sales of Securities Consumption Tax Rate of 1.4% (10%
        of National Consumption Tax Rate)

    iii. Gaming Sponsors Gross Profits Tax: 8% (since gaming is a
         licensed activity, government is considered a partner,
         therefore players are not taxed, only the profits of the gaming
         sponsor)

    iv. Social Security and Medicare income taxes remain in effect until
        Congress decides otherwise.

d.  **Distribution of Tax Burden**

    i.  Spending decisions determine level of tax burden. Under this
        system, poor people, spending most of their money on the
        essentials pay little if any tax while the rich, who buy more
        cars and eat out, pay lots of tax.

e.  **Treatment of Charitable Giving**

    i.  The loss of the income tax removes the deductible incentives,
        however some of this loss is recovered by the government
        issuance of Credit Certificates to donors to qualified
        non-profit organizations equal to 10% of the amount over \$250.
        These Credit Certificates are used to pay consumption tax
        obligations, and can be transferred on the open market.

    ii. Businesses do not have to charge consumption tax for purchases
        by a registered nonprofit organization if the purchase is for a
        nonprofit use, or noncompetitive commercial use.

f.  **Treatment of Home Ownership**

    i.  Buying a home is considered a qualified retail event applicable
        to the National Consumption Tax.

    ii. Used homes have a taxable base of only the difference between
        the original purchase price and the new selling price. Whereas
        new homes are taxed at the full purchase price at the time of
        sale.

    iii. Compound interest on secured loans is eliminated. Only simple
         interest is allowed to be collected as a monetization fee.

    iv. Principles are required to be paid first before banks collect
        their monetization fee.

    v.  These changes are retroactive on all secured loans.

g.  **Collection Methods**

    i.  Initiating a non-exempt retail transaction makes one an agent
        for collecting the sales tax due for that transaction.

    ii. The sales tax is due at the closest regional bank by the 10^th^
        day of the following month of the month the transaction
        occurred.

h.  **Treatment of Businesses**

    i.  Businesses are treated as agents of the national sales tax
        service. They collect sales tax on taxable goods and services
        and remit their payments by the due date.

    ii. Businesses have the ability to acquire new secured loans without
        the inherent instability of a compound interest loan equation,
        as all secured loan payment plans always end in 0 since under
        NESARA, principles are paid first. This has the effect of
        generating fewer bankruptcies due to defaults, and increases the
        ability of businesses to expand and create jobs.

    iii. The elimination of the income tax will dramatically reduce the
         costs of goods and services provided due to the inherent nature
         of the embedded costs of the income tax (or any other tax
         system that adds a tax throughout the process of making a good
         or service). Estimates place this hidden embedded cost
         reduction at up to 30%. On top of the monetary reform
         provisions of NESARA, that is why we believe a 14% rate is
         conservative revenue neutral rate.

II\. Impact of Proposal Relative to Current System

> Compared to the current system and other proposals, NESARA is the
> simplest, fairest, and takes into account the moral need to provide
> for blind tax exemptions on the necessities of life.

a.  **Simplicity**

> A flat 14% sales tax on the non-essentials of life is simple,
> especially when compared to a confusing eight volume work of the
> current income tax code. A flat national consumption tax is easy to
> manage as a single percentage. All other exemptions and exclusions and
> special provisions of NESARA are tied to that number, making
> adjustments easy and understandable.

i.  *Transparency:* The true cost of government is reflected in a
    simple, flat, national consumption/sales tax.

ii. *Stability:* The monetary reform provisions of the NESARA proposal
    include the stability of our monetary system as its chief priority.
    A flat national consumption tax is a stable, easily manageable
    system if simple over-the-counter exemptions are included.
    Ultimately, however, it is the author's opinion that true stability
    can only come with a reformation of our monetary system as well.
    Please check out NESARA's monetary reform provisions here:
    <http://nesara.org/bill/part1b01.htm>

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b.  **Fairness**\
    NESARA is blinded to individuals' incomes. If the good or service is
    not necessary for living in the United States, then that good or
    service must be taxed. The rich, who pay more than just for the
    necessities, buy more goods and services that aren't considered
    necessities for living.**\
    \
    **NESARA provides Congress the freedom to legislate what is exempt
    and what is not. Also an arbitrary, intrusive, expansive, and
    expensive national rebate program is avoided altogether with simple,
    over-the-counter exemptions on the necessities of life.

c.  **Economic Growth and Competitiveness\
    **The monetary reform provisions of the NESARA proposal returns a
    benefit to the economy that is just to great to measure. It is
    estimated that \$1 trillion of the national debt would be
    eliminated, and approximately \$500 billion in bank reserves would
    be available for lending.\
    \
    A national consumption tax would also tax imports equally, however
    with the hidden costs of the income tax eliminated from purchases
    (calculated to be as high as 30% of current prices), domestic prices
    will fall and subsequently be more competitive versus imported goods
    and services. NESARA projects a modest 2.5% productivity growth per
    year, which equates to a doubling of the standard of living within a
    20 year period. It is believed that other nations would have to
    adopt similar fiscal and monetary system just to keep up with the
    United States.

d.  **Compliance and Administrative Costs**

    i.  Compliance is mandatory for all non-exempt commercial
        transactions.

    ii. Evasion is harder since it will require more than one party to
        evade paying the sales tax.

    iii. If the national tax service believes the tax has not been paid
         on a non-exempt commercial transaction within the jurisdiction
         of the United States, the parties named in a warrant of
         deficiency only have to produce a receipt of the transaction
         proving the tax was paid, or provide books and records
         concerning the transaction.

    iv. Investigation of continuing fraud becomes a mere matter of a tax
        agent making a purchase and verifying the tax was paid.

    v.  Administrative costs for the transition to the fiscal provisions
        of NESARA are relatively small. In fact, the tax service might
        find themselves with not a lot to do, and hence a smaller
        budget.

    vi. An expensive government rebate program is avoided entirely with
        over-the-counter exemptions on the necessities of life.

III\. Transition, Tradeoffs, and Special Issues

> It is believed the transition costs of both the fiscal and monetary
> provisions of the NESARA proposal are only the cost of printing new
> letterhead, new currency (monetary reform provision), and the
> elimination of current IRS staff.

a.  **Impact of Transition**

> The impact of converting the fiscal system of the United States to one
> proposed by NESARA would see a dramatic increase in tax compliance,
> competitive downward pressure on prices versus imports, and an
> increase in the value of used homes, helping to put an end to urban
> blight. The benefits are just too numerous to list here in full.

b.  **Tradeoffs**

    a.  People no longer have to fill out forms to discharge their tax
        liabilities.

    b.  The government does not have to keep yearly tabs on the income
        of the people (assuming of course the Social Security and
        Medicare income taxes are not referred to in this proposal).

    c.  A national rebate program is avoided, and so more government
        spending avoided.

**Special Issues and Considerations**\
The monetary reform provisions of the NESARA proposal provide for
sweeping, positive changes to our current monetary system, the benefits
of which are incalculable in terms of its prosperity to the economy of
the United States. Since true tax reform is futile without reforming the
monetary system, it is concluded here that the President's Advisory for
Tax Reform visit <http://nesara.org/bill/> to find out more.\
The effect of the changes would become apparent overnight. Taxes would
cause prices to increase dramatically by at least 14%, but at the same
time, businesses no longer have to collect income taxes from their
employees and so they pass on the savings to their employees who receive
a larger paycheck. Prices for non-exempted items and services become
temporarily inflated. Over time, as cost-reductions are realized, prices
come back down slightly and stabilize. The costs for the basic
necessities of life stay the same or become cheaper. The standard of
living for the working poor increases almost immediately as a result
since they are not largely affected the new national consumption tax,
but are freed from the government intrusive income tax.

New home sales will skyrocket before the bill becomes law. Once the bill
becomes law, immediately the cost of buying a used home becomes
immediately more appealing.

NESARA's new loans equations become retroactive (a provision for NESARA
to guarantee fairness when compound interest is eliminated on secure
loans). Some homeowners who are in the 17-20^th^ year of paying their
home, under the NESARA equations that are applied retroactively, many
may find themselves with their home completely paid for, or very nearly
paid for. Immediately their discretionary spending increases.

Banks will find that they have their reserves met faster as secured
loans are converted to the NESARA secured loan equations. They all of a
sudden have more money to lend. Some estimates place this amount at
\$500 billion nationwide. This new pile of cash can then become
available for the community, for new loans, or new government projects
if the voters decide to pay for them. If anything, the changes become
deflationary, and the government will probably have to spend money the
money to keep deflationary pressures low -- further increasing national
productivity if spending is increased.

In short, NESARA is a win-win solution to the country's current monetary
and fiscal problems, and we would like representatives from the
government to take a serious look at the NESARA proposal at
[http://nesara.org](http://nesara.org/) and feel free to ask questions
about it at <http://www.thewordfiles.com/nesara/index.php>

There are many more transitional changes that take place that have not
been talked about in this proposal, however we have tried to focus on
the fiscal reform side of the National Economic Stabilization and
Recovery Act in accordance with the proposal guidelines.

IV\. Conclusion

We believe NESARA is the best proposal to date that is fair, equitable,
and revenue neutral, and we would not be doing our job if we did not let
the President's Advisory Panel for Tax Reform be made aware of it. We
hope that someone on that panel takes a serious look at it. Please check
the proposed bill and its detailed summary explanation at
<http://nesara.org/bill/index.htm> Thank you.

Sincerely,

Ryan Kingsly

Administrator

The NESARA Discussion Board

<http://www.thewordfiles.com/nesara/index.php>