The Automatic Micro-Tax (AMTDC) represents a new paradigm for tax collection. No longer are citizens and corporations and their respective incomes and profits the sources for government revenue. Instead, flows within the financial system itself are taxed: each electronic transaction, representing a debit/credit pairing, becomes the grounds for this new Micro-Tax. Because it is levied automatically, the Micro-Tax is both fair and easy to administer. The processors of these payments, the financial industry itself, become collectively responsible for an automatic tax contribution, thus completely eliminating the current strain on individual taxpayers and corporations to both file and pay income- or profit-based taxes.
The Micro-Tax also serves another purpose: to illuminate financial flows, bringing transparency to their nature and magnitude. Indeed, we citizens are entitled to knowledge of the size and structure of our financial system, since both our current tax revenues and claims on the future productive capacity of our economy are used as collateral in times of crisis.
Because it is an abundant new source of revenue, the Micro-Tax is capable of replacing all existing taxes and contributions. In harmony with the constitution of the Swiss Confederation, the Micro-Tax should be implemented sensibly and in steps. First, taxes and contributions at the federal level must be replaced. These include the Value Added Tax, the Direct Federal Tax, and Stamp Duties.
The Automatic Micro-Tax comes the closest to the ideal of a just and equitable tax system that is easy to understand and friendly to all taxpayers.
Working Paper January 2013 – January 2020
Felix Bolliger
lic.oec. HSG
In 2012, the transaction volume processed by Swiss Interbank Clearing (SIC) alone amounted to 95 trillion (German: Billion) Swiss francs (CHF) net. This amount includes sight deposit transfers (Giroüberträge) on accounts held by domestic banks at the Swiss National Bank (*). In addition, in 2012-2013 the Swiss market for foreign exchange processed more than 50 trillion CHF (according to BIS statistics) and on top of this a considerable number of transactions are settled directly in-house by PostFinance, the domestic banks, and correspondent banks. For these internal movements, no official statistics are available; a conservative estimate places them at 35 trillion CHF. Though invisible to the man on the street, a massive financialization of our economy continues to unfold. These giant financial flows represent a new and very promising tax base.
The Automatic Micro-Tax on Debiting and Crediting (AMTDC) is founded on a wholly new paradigm from the existing tax code. For example, by levying a mere 0.1% Micro-Tax on all debits and credits in a system that moves 100 trillion CHF in annual payments, existing taxes and social contributions paid by individuals and corporations — and amounting to 30% of GDP — become obsolete. The Automatic Micro-Tax is easy to understand, easy to implement, and its revenues are abundant.
