World Library  
Flag as Inappropriate
Email this Article

Automated payment transaction tax

Article Id: WHEBN0012276509
Reproduction Date:

Title: Automated payment transaction tax  
Author: World Heritage Encyclopedia
Language: English
Subject: Financial transaction tax, APT, Alternative minimum tax, Capital gains tax in the United States, Corporate tax in the United States
Publisher: World Heritage Encyclopedia

Automated payment transaction tax

The Automated Payment Transaction (APT) tax is a proposal to replace all United States taxes with a single tax (using a low rate) on every transaction in the economy. The system was developed by University of Wisconsin–Madison Professor of Economics Dr. Edgar L. Feige.

The foundations of the APT tax proposal—a small, uniform tax on all economic transactions—involve simplification, base broadening, reductions in marginal tax rates, the elimination of tax and information returns and the automatic collection of tax revenues at the payment source. The APT approach would extend the tax base from income, consumption and wealth to all transactions. Proponents regard it as a revenue neutral transactions tax, whose tax base is primarily made up of financial transactions. The APT tax extends the tax reform ideas of John Maynard Keynes,[1] James Tobin[2] and Lawrence Summers,[3] to their logical conclusion, namely to tax the broadest possible tax base at the lowest possible tax rate. The goal to significantly improve economic efficiency, enhance stability in financial markets, and reduce to a minimum the costs of tax administration (assessment, collection,and compliance costs). There is disagreement over whether the tax is progressive, with the debate primarily centered on whether the volume of taxed transactions rise disproportionately with a person's income and net worth. Simulations of the Federal Reserve's Survey of Consumer Finances [4] demonstrate that high income and wealthy individuals undertake a disproportionate volume of transactions since they own a disproportionate share of financial assets that have relatively high turnover rates. However, since the APT tax has not yet been adopted, some argue that one can not predict whether the tax will be progressive or not.

Daniel Akst, writing in the New York Times,[5] wrote "the Automated Payment Transaction tax offers fairness, simplicity, and efficiency. It may not be a free lunch. But it sure smells better than the one we eat now." On April 28, 2005, the APT proposal was presented to the President's Advisory Panel on Federal Tax Reform in Washington, DC.[6]

See also


  1. ^ Keynes, J.M. (1936). The General Theory of Employment, Interest and Money, Harcourt Brace, New York, NY.
  2. ^ Tobin, James (July 1978). A proposal for international monetary reform',"'". Eastern Economic Journal 4 (3–4): 153–159. 
  3. ^ Summers,, Lawrence; Summers, V. P. (1989). "When Financial Markets Work Too Well : A Cautious Case For A Securities Transactions Tax". Journal of Financial Services Research 3 (2–3): 261–286.  
  4. ^
  5. ^ "ON THE CONTRARY; Dreaming Out Loud: One Tiny Little Tax". The New York Times. 2003-02-02. 
  6. ^

External links

  • Automated Payment Transaction Tax plan website
  • The Transaction Tax official website at

This article was sourced from Creative Commons Attribution-ShareAlike License; additional terms may apply. World Heritage Encyclopedia content is assembled from numerous content providers, Open Access Publishing, and in compliance with The Fair Access to Science and Technology Research Act (FASTR), Wikimedia Foundation, Inc., Public Library of Science, The Encyclopedia of Life, Open Book Publishers (OBP), PubMed, U.S. National Library of Medicine, National Center for Biotechnology Information, U.S. National Library of Medicine, National Institutes of Health (NIH), U.S. Department of Health & Human Services, and, which sources content from all federal, state, local, tribal, and territorial government publication portals (.gov, .mil, .edu). Funding for and content contributors is made possible from the U.S. Congress, E-Government Act of 2002.
Crowd sourced content that is contributed to World Heritage Encyclopedia is peer reviewed and edited by our editorial staff to ensure quality scholarly research articles.
By using this site, you agree to the Terms of Use and Privacy Policy. World Heritage Encyclopedia™ is a registered trademark of the World Public Library Association, a non-profit organization.

Copyright © World Library Foundation. All rights reserved. eBooks from Project Gutenberg are sponsored by the World Library Foundation,
a 501c(4) Member's Support Non-Profit Organization, and is NOT affiliated with any governmental agency or department.