jabowery
06-14-2012, 09:50 AM
The Iowa GOP Platform Committee removed an important plank submitted by District 3. I want to explain the plank's importance.
The County Currency Plank
"We support that transactions conducted in county currencies shall not be subject to Federal or State taxes."
First a definition:
County currency is any currency issued by a county government that it accepts as an alternative to Federal Reserve currency in payment of county taxes.
National Security
The single most important reason to support this plank is the protection it provides against terrorism. By encouraging the localization of vital supply chains, people become less vitally vulnerable to the destruction of central distribution hubs.
This is not a new, nor radical idea.
During the Cold War, a WW II code-breaker named William C. Norris founded the world's first supercomputer company in Minneapolis (Control Data Corporation). He was acutely concerned about the vulnerability of the United States to nuclear attack -- vulnerability that was increasing with the urbanization of the population and the resulting centralization of supply chains in urban centers. He set aside a large portion of CDC's fortune to pursue the renewal of rural life with high technology approaches to energy, food production and even an early form of the Internet, on which I worked, called the PLATO network. The response from Wall Street to his initiative was vicious as analysts campaigned for his removal from the helm of CDC. They succeeded and Norris failed to achieve his vision for a more secure American founded on a stabilized rural culture.
Although the Cold War would seem to be over, the national security dangers arising from centralization of population and supply chains is greater than ever. Moreover, even in the absence of direct military attacks, the ongoing financial crises have demonstrated that the first concern of monetary authorities are with the central banks, even foreign central banks, while domestic rural populations are largely left to fend for themselves when it comes to creating stable jobs that cultivate solid family formation.
By tax-exempting transactions conducted in county currencies, County governments would be encouraged to provide the monetary base for the creation of localized economies. These economies would naturally tend toward vital needs such as food, energy, housing and even medical care.
Historic Precedent
There is precedent for this sort of local-government currency working and working spectacularly. One of the best known examples is called "The Wörgl Experiment" conducted in the Austrian town by that name during the Great Depression years. I encourage you to take the time to read the article and view the video at this link (http://www.lietaer.com/2010/03/the-worgl-experiment/) describing that experiment. There are many other approaches to local government-backed currency that would work and County governments should be free to try their own approaches in a "Laboratory of the Counties".
Impact on State Revenues
So what of State revenues if, for instance, Iowa were to exempt its County currencies?
Currency exchanges involving Federal Reserve currency would, of course, be taxed as usual so it would be futile to exchange Federal Reserve for County currency and back again just to engage in a tax free transaction. With that precaution, State tax revenues would be hardly affected, one way or the other, in the first years. Local economies take time to grow. The results of the legislation could be observed and adjustments made.
If the experience of Wörgl, Austria is any indication, there would be an increase in taxable economic activity as the local economy attracted outside capital and business.
Impact on Federal Revenues
The 16th Amendment to the US Constitution, the income tax amendment, was not originally conceived as a tax that would involve transactions between ordinary citizens of modest means. The author of the original federal income tax legislation was clearly attempting to focus taxation on those with significant concentrations of economic power.
Large corporations and wealthy families can already conduct extensive internal transactions that are exempt from taxation and regulation. Local communities deserve similar flexibility.
The founders of the US government intended the Federal government to be able to regulate international and interstate trade. Those transactions clearly are sufficient to support the Federal government.
The present system of Federal taxation has fallen particularly heavily on out-lying communties -- communities that are relatively isolated or economically marginal. Allowing creation of a strong local economy will help areas to develop economically that simply cannot develop under the present arrangements.
The US worked hard to develop strong national integration of the economy after the Civil War. Part of the reason was to prevent any region from being tempted to secede again. This process has been extended to a level of international integration that threatens the very sovereignty of the United States.
The County Currency Plank
"We support that transactions conducted in county currencies shall not be subject to Federal or State taxes."
First a definition:
County currency is any currency issued by a county government that it accepts as an alternative to Federal Reserve currency in payment of county taxes.
National Security
The single most important reason to support this plank is the protection it provides against terrorism. By encouraging the localization of vital supply chains, people become less vitally vulnerable to the destruction of central distribution hubs.
This is not a new, nor radical idea.
During the Cold War, a WW II code-breaker named William C. Norris founded the world's first supercomputer company in Minneapolis (Control Data Corporation). He was acutely concerned about the vulnerability of the United States to nuclear attack -- vulnerability that was increasing with the urbanization of the population and the resulting centralization of supply chains in urban centers. He set aside a large portion of CDC's fortune to pursue the renewal of rural life with high technology approaches to energy, food production and even an early form of the Internet, on which I worked, called the PLATO network. The response from Wall Street to his initiative was vicious as analysts campaigned for his removal from the helm of CDC. They succeeded and Norris failed to achieve his vision for a more secure American founded on a stabilized rural culture.
Although the Cold War would seem to be over, the national security dangers arising from centralization of population and supply chains is greater than ever. Moreover, even in the absence of direct military attacks, the ongoing financial crises have demonstrated that the first concern of monetary authorities are with the central banks, even foreign central banks, while domestic rural populations are largely left to fend for themselves when it comes to creating stable jobs that cultivate solid family formation.
By tax-exempting transactions conducted in county currencies, County governments would be encouraged to provide the monetary base for the creation of localized economies. These economies would naturally tend toward vital needs such as food, energy, housing and even medical care.
Historic Precedent
There is precedent for this sort of local-government currency working and working spectacularly. One of the best known examples is called "The Wörgl Experiment" conducted in the Austrian town by that name during the Great Depression years. I encourage you to take the time to read the article and view the video at this link (http://www.lietaer.com/2010/03/the-worgl-experiment/) describing that experiment. There are many other approaches to local government-backed currency that would work and County governments should be free to try their own approaches in a "Laboratory of the Counties".
Impact on State Revenues
So what of State revenues if, for instance, Iowa were to exempt its County currencies?
Currency exchanges involving Federal Reserve currency would, of course, be taxed as usual so it would be futile to exchange Federal Reserve for County currency and back again just to engage in a tax free transaction. With that precaution, State tax revenues would be hardly affected, one way or the other, in the first years. Local economies take time to grow. The results of the legislation could be observed and adjustments made.
If the experience of Wörgl, Austria is any indication, there would be an increase in taxable economic activity as the local economy attracted outside capital and business.
Impact on Federal Revenues
The 16th Amendment to the US Constitution, the income tax amendment, was not originally conceived as a tax that would involve transactions between ordinary citizens of modest means. The author of the original federal income tax legislation was clearly attempting to focus taxation on those with significant concentrations of economic power.
Large corporations and wealthy families can already conduct extensive internal transactions that are exempt from taxation and regulation. Local communities deserve similar flexibility.
The founders of the US government intended the Federal government to be able to regulate international and interstate trade. Those transactions clearly are sufficient to support the Federal government.
The present system of Federal taxation has fallen particularly heavily on out-lying communties -- communities that are relatively isolated or economically marginal. Allowing creation of a strong local economy will help areas to develop economically that simply cannot develop under the present arrangements.
The US worked hard to develop strong national integration of the economy after the Civil War. Part of the reason was to prevent any region from being tempted to secede again. This process has been extended to a level of international integration that threatens the very sovereignty of the United States.