Thoughts from the "King of the Hill"

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Archive for the ‘Concepts and Ideas’ Category

This is the area where I will discuss ideas that toll around in my head – ways current inventions can be improved. Other posts will cover educational topics that I have researched and want to ‘pull together’ the research into a more useful model.

Can the Sales Tax be a Fair Tax?

Posted by Rex Critchlow on November 18, 2011

Over the last few months, we have heard proposals for a new tax system by most of the candidates that want to be the Republican Nominee for President in 2012. Herman Cain has his 9-9-9, Perry his ‘postcard plan’, but all of them come under fire by the opposition with the same argument: “The poor would have to pay more in taxes”. Notice here that nothing is said about the status of the rich. What they are really arguing for is the status quo. Why? Power and Greed.

Sure the ‘fat cats’ on Wall Street are robbing us blind, but then, so are the politicians – whether that be in Washington D.C. or your home town. Insider trading, land deals, kickbacks – and a thousand other ways I don’t have the mental wherewithal to even dream up – but those are all topics of future posts. For now, suffice it to say that the current tax law is all about Congress (and the White House) and the power they wield with their ability to tweak the tax code in favor of their donors and causes. Ultimately that leads to an unfair tax code – whether you are the benefactor of the injustice or the victim.

So could we have a fair tax system? It’s probably easier than you would think – at least to design. I’ve heard some argue that everyone should pay something in taxes, and I tend to agree. For example, no person in your state is exempt from paying sales tax. In most states, businesses purchasing items for resale do not pay taxes, nor do non-profit or government entities. In some states, like Indiana, some items are not subject to sales tax – unprocessed foods and services come to mind.

The Cain and Perry plans both propose scrapping the current tax code for a tax that is ‘more fair’ and, I believe, both with the eventual goal of a national sales tax (NST) system. Let’s skip the middle man and go straight to the NST. Let’s drill down and see how this could be made fair to everyone – at lease, mostly fair.

Since studies show that most people don’t care about the rich, let’s look at a struggling family (or individual) and their basic needs.  Note that I said needs, not rights, wants, desires, preferences or any other semantic parsing. NEEDS – housing, food, basic utilities (electricity, gas, water and sewage). These items will account for at least 80% of the gross income of all low income households. So let’s make them tax exempt. Not the individuals and families – the NEEDS. That means that sales tax would only apply to a persons discretionary spending – cars, cell phones, potato chips, movies, consumer electronics, etc. Let’s throw some numbers out there…

A family of four that makes a total of $50K/year. Assuming that my figure of 80% for NEEDS is correct, this family will have only $10K in discretionary spending. With a NST of 11%, that family would pay about $1,100 per year in federal sales tax – a real rate of 2.2%. When you consider that this family is already paying 7.65% for Social Security and Medicare in today’s tax system.

Let’s face it, millionaires and billionaires have far more discretionary funds than a struggling family – and they spend a lot more for things like taxi or limo service, air fare, hotel rooms, fine dining, and more. Even though they may save while purchasing their lavish homes, they still spend a lot more than the average family and will, by default, pay more in taxes.

If there is no federal income tax and an individual that works for a company like IBM or Wal-Mart does not have taxes taken out of their pay check, it would seem reasonable that monies paid for services would also be exempt. For example: automotive service, manicures, legal fees, lawn care, computer service, etc. It could also be argued that all labor other than direct employees should be taxable. This opens that proverbial can of worms by trying to pin down an air-tight definition of ‘Direct Employee’. Looking to states like Indiana, where professional services are not taxed, and Florida, where they are, may offer a solution.

Reality bites. When discussing abolishing the current tax structure and implementing a new ‘fairer’ system, reality will bite hard. No matter how fair the new system, the odds of getting Congress and the President to sign it into law are so close to nil, I’d say my odds are better at winning the PowerBall (and lotteries aren’t legal here in Alabama). Politicians in a fair tax system are the biggest losers, and this isn’t a reality show – it’s reality.

Please comment on this idea (particularly the NTS plan). I really would like to hear what you think.


Posted in Concepts and Ideas, Uncategorized | Tagged: , , , , , | 1 Comment »

Fixing the USPS (US Postal Service) Deficit

Posted by Rex Critchlow on August 22, 2011

For too many years now I have maintained a post office box – at a cost of about $50 per year. I’ve often wondered why it is that I have to pay so much for a box that requires little to no maintenance and is so much more convenient to the postal workers than it is to me. Then it hit me – they’re doing it all backwards.

The solution is simple – FREE POST OFFICE BOXES and PAY FOR HOME DELIVERY. For everyone that wants to-your-door delivery, there is an additional fee. For everyone that wants to use PO boxes, they’re free. Think about it – no more maintenance on vehicles, gasoline and you can cut the labor force dramatically. Granted, we don’t have enough PO boxes today, but if we started migrating neighborhoods to large stations with no attendees – although they may need some sort of lighting, element protection and even a security camera – all is cheaper than paying these people to walk (or drive) door-to-door.

The suburbs and apartment complexes are easy. But there should be a minimum number of boxes per location – say 200. Traditional city housing could be blocked into ten square blocks which would typically be about 1500-1600 homes. There are certainly some issues with this idea – like where to put these boxes, but it would, in the long run, save a lot of money.


Posted in Concepts and Ideas | Tagged: , , , , , | 2 Comments »

A Better Idea Than Charging Stations for Electric Cars

Posted by Rex Critchlow on August 21, 2011

I’ve noticed in the UK that they are working on a national effort to install “charging stations” across the country for those that drive electric cars. I guess the idea is that if someone is driving more than the current 100 mile (160 km) range of the present-day electric car, one can stop and recharge the battery.  Here in the US, estimates ( claims that it will cost between $2 and $4 per full charge.

Just for fun, lets compare the cost of driving an EV (electric vehicle) to a gas powered vehicle. Lets assume you drive a newer model mid-size sedan that gets 34 MPG. With a 12-gallon tank, you can go about 408 miles per tank. A refill @ 3.29 (the average price around Montgomery Alabama today – 8/21/2011) will run you about forty bucks and take about fifteen minutes. To recharge the EV you will spend between $8 and $16 and take thirty-two hours. I guess if “Time is Money” then it depends on what that 32 hours is worth to you. Of course you can do other things – you just can’t go anywhere to do it.

There has to be a better way! What if you could simply pay $10 “at the pump” and get a gull charge in ten minutes or less? Then this idea is for you. Let’s apply the same solution to EV’s as we did to computer systems (excluding, of course, Apple products). Standardize. Here’s how my plan would work.

1. All EV’s batteries need to be standardized. Look at your gas powered vehicle (GPV) battery choices – there are a ton of them…I won’t even begin to list the variations. If we had a consortium that standardized EV batteries, the cost of the batteries would drop dramatically, making the cost of the vehicle far less than it is today. Of course there would be Gen 1, Gen 2, etc. as tome passes, and your EV would (or at least should) be able to upgrade as the new batteries come out.

2. With standardized batteries we will implement standardized connectivity – just like on GPV’s (we all use the same gas pumps and fill via the same sized fill port on the car. With EV’s, the ‘fill port’ would actually be an electronically controlled access panel on the outside of the car – just like the gas fill cover – except this one opens via a remote signal instead of manually opening the cover.

3. Power stations (like a gas station) have a place to pull your vehicle to be serviced (filled with gas) except the Power Station is a robotic station that reads an RFID chip on your car that identifies the make and model (and optionally the VIN – see the section on Protecting my Battery below). The robot reads the RFID chip and, via the database, knows the exact dimensions of the car and the location of the battery panel. Using a Red/Green light system, helps you to properly park the car. The robot then waits for payment – cash, credit card, etc. Once paid, the robot opens the panel, extracts the existing battery and sends it into the charging compartment of the station. Retrieves a fully charged battery, inserts it into your car, closes the door, and away you go – Fully charged and ready for your next hundred mules. Total time of exchange, about five to ten minutes.

4. Power Stations can be designed in different configurations for numbers of service-bots and battery capacity. For example, a roadside station in the middle of Kansas may only need to service one EV at a time, but have capacity for 50 or more batteries, while an EV in Baton may need to service twenty or more vehicles simultaneously and hold 1000+ batteries. It will take some time to determine a formula for what type of station is needed in which environment – especially since the number of EV’s on the road today is far less than the number in, say, ten years.

Protecting my Battery: With remote controlled access panels, and the way society is today, there will need to be some sort of security to protect from theft. A simple, voluntary national database that tracks which battery is in which EV would go a long way to preventing theft. Anyone in the business of buying or recycling EV batteries could be required to check the serial number against the national database to see the status of the battery.

The rest, I think you can figure out on your own. I’d like your feedback in the form of comments and/or vote on my poll. Thank you.


Posted in Concepts and Ideas | Tagged: , , , , , , , | 4 Comments »