State Revenue and Expenditure:: Formulation of Taxation ----------------------- The state cannot enact taxes except as enumerated in this document. The tax levied on a particular act or transaction must not vary within the nation. An extraction tax is levied on all physical raw materials - ores and other minerals, fuels and timber, atmospheric extracts (raw gases such as nitrogen, oxygen, argon, and helium), aquatic extracts (salt, fish, seaweed), livestock and agricultural products, water, etc - each taxed according to mass, at different thresholds (below which no taxation is levied) and rates according to environmental impact of the product and the process of extraction. The disposal of waste products - the return of any resource, processed or not, to the environment - is taxed according to environmental impact. Where it is not feasible to account for consumption of a resource, the consuming agent (e.g., livestock) is taxed upon transfer of ownership of the agent. Yet-untaxed goods leaving the country are taxed at the same rate as though they were extracted and sold domestically. Taxation on imported goods is described below in
. The rate of taxation for a given product relative to those for other products can be formulated only on the basis of environmental impact. The production and disposal, of agricultural goods within a household, including the combustion of timber, wherein no transfer of ownership occurs, are exempt from taxation. A given item or quantity of goods cannot be taxed more than once for extraction, and if disposed, not more than once for disposal. this represents a taxation cycle, and re-extraction is taxed at the usual rate. For each product or activity or portion thereof which has a localized environmental impact, the state must specify in a detailed bulletin the additional tax charge levied on a responsible party that fails to satisfactorily reverse the impact, and must specify precise time periods over which the cleanup must be performed, and precise criteria for determining exactly of what a satisfactory cleanup consists. A responsible party that completes the cleanup is exempt from the additional tax. The only type of environmental impact which does not lend itself to the above, by dint of non-localizeability, is pollution of the atmosphere. Primary among atmospheric polluters is the combustion of fuels. When the environmental impact of a product or activity can be delineated into localizeable and non-localizeable components, the processes of cleanup for the localizeable portion must be treated as described above - particularly, a tax exemption for satisfactory cleanup performance must be provided, in an amount proportional to that portion of the environmental impact which is localizeable and has been cleaned up. Through advance agreement, a responsible party can arrange to assume only a portion of the processes of cleanup, and receive a proportional and agreed-to reduction in cleanup tax. Additional cleanup tax money received as specified above must be maintained in an account separate from all other state money, and must be spent exclusively on cleanup activities. Royalties paid for intellectual property protected by law are taxed at a strictly uniform rate of up to 20%, as set by law. For the purposes of this section, trademarks are not intellectual property, and revenue from sales of products marketed under a protected trademark, but not otherwise protected by , are not candidates for taxation. In a given year, total resource tax revenue must equal total intellectual property tax revenue within one percentage point, except that if the maximum legal total resource tax revenue is less than half the maximum legal total tax revenue, the total IP tax revenue can exceed the total resource tax revenue provided the actual total resource tax revenue is equal to the maximum legal total resource tax revenue. Any intellectual property protected by law, must be licensable and available as an individual item in isolation. The entire license fee charged for this item is taxable. If legally protected IP items are incorporated into a larger item, then the taxable portion of the larger item is the total of the license fees for the collection of legally protected IP items incorporated. Tax is paid to the state of the nation where the sale takes place. Extraction tax cannot exceed 50% of the wholesale fair market value of the item being taxed. The sum total of general tax revenue (which excludes cleanup tax money) can never exceed ten percent of the product of an average wage and the total domestic human population. State agencies must pay taxes on the same schedule as do private individuals and incorporated entities. To be general, there are no tax exemptions other than those enumerated in this section. On Subsidies, Aid, and International Tariffs --------------------------------------------- A subsidy is a grant by a particular unit of state, to a private person or incorporated entity to assist or affect private enterprise, aside from duly awarded contracts. Foreign aid is any grant by the state to any foreign state or private concern, aside from duly awarded contracts. Except where the immediate military dictates of physical national defense require it, the state cannot offer domestic subsidies or foreign aid in cash or kind. The state must enact tariffs on goods entering or leaving the nation on three bases: 1) to precisely compensate for any discrepencies between the exporting nation's taxation level and the domestic level, 2) in direct and balanced response to tariffs or other market barriers erected by another nation, and 3) to fully compensate for wage differentials between foreign and domestic laborers in equal roles. Tariffs are to be paid by the importing party. The state cannot enact tariffs on goods entering or leaving the nation on bases other than the above-mentioned and those specified in . Proceeds from the above-detailed responsive and compensatory tariffs are to be precisely offset by reductions in general taxation. Routing of Monies within the State ---------------------------------- All money paid into the state enters a single general fund from which all internal funds are drawn, except for direct payment and special taxation for services rendered and provided as enumerated in this document (which are handled internally by the agency enlisted), and payments which serve to reduce general taxation (as detailed in this document) which enter a separate general refund account. Agencies of the state must pay fair market value for products and services when dealing with each other. Contract Award Procedure ------------------------ A description of all contractor searches must be accessible to the public for at least two weeks prior to the last day proposals are accepted, except in cases of time-critical emergencies. In cases where a full description would compromise national defense, a full description can be withheld until a requester has been background-checked and has signed an agreement to maintain confidentiality. In the case that supply of a full description is delayed, requests must be accepted for at least two weeks following the initial announcement, and proposals must be accepted for at least two weeks following the last delivery of a full description. The state must award contracts on the following bases: price, quality, stability of support, and environmental impact. Price includes initial research and development costs, unit fabrication costs, and cost of repair. Quality includes ease of use, versatility, technical performance under normal and exceptional operating conditions, durability, lifetime, MTBF/MTTR, ease of repair, regularity of behavior, and adherence to contract specifications. Stability of support is the expectation that the organization fulfilling the initial contract will persist long enough to provide technical support and repair/replacements for the specified lifetime of the device, and the degree to which proper continued operation of the device is independent of this persistence and performance on the part of the contractor. The minimization of environmental impact must be used to discriminate between proposals of otherwise similar merit. Formulaic, or otherwise more detailed, evaluative procedures for comparison of competing proposals, can be specified by law in concordance with the above. Any device critical to national defense must be delivered with complete technical plans sufficient to replicate the device independently if necessary, including full source code for any software if applicable. If the contractor so requests or at the state's behest, these plans must be kept confidential. No state contract can be awarded to a contractor for at least one year following substantial non-performance, performance at a substantially inflated cost, or substantially delayed performance, on a prior or continuing contract. However, inadequate performance resulting from circumstances beyond the contractor's control, e.g. natural disasters, unforeseeable shortages and/or price increases in raw materials, or legislation affecting the terms of the contract, wages, taxes, etc., can not lead to such a penalty. No law can forbid or require the hiring of labor forces organized for negotiation leverage (unionized) for fulfillment of state contracts, or treat the union status of labor as a factor in the relative evaluation of competing proposals. The state cannot purchase products from individuals or incorporated entities who have refused to sell to a private individual a product they have sold to a state, and on the same price schedule as that offered to that state, provided law does not preclude such purchase. the price schedule for any product offered for sale to the state must specify a single unit purchase price no greater than twice the per-unit price for the greatest quantity scheduled, or for the greatest quantity sold to the state, whichever price is lower. Such purchase is contrary to law if the product contains classified technology or information and the state has not provided a waiver or license for the purchase. In the case that private purchase of a product is precluded only by classification restrictions, a version of the product with classified technology and information replaced by non-classified technology and information, which provides maximum possible functional and operational equivalence to the original product, must be offered for sale to private individuals on a price schedule equal to or lower than that of the original product. For example, if a product contains a classified encryption module, the version purchasable by private individuals must contain an unclassified encryption module providing similar resistance to known-ciphertext compromise of a key or plaintext, known-plaintext compromise of a key, and forging of a data signature, by an attacker with intimate knowledge of the algorithms implemented by the encryption module. General Ledger Certification ---------------------------- The state must provide and promptly publish a cryptographic receipt for all monies and goods it receives. Where individual privacy is at issue, the published receipt reveals only the reason for transfer. A state agency must demand a cryptographic receipt specifying full recipient name and general purpose for transfer of money or goods before transfer to another state agency or non-state entity can be completed. The state is required to promptly publish these receipts.