The Flow of Information

I am a computer programmer. My primary interest is the flow of information.

I've put two reform packages on the table: The "The Medical Savings and Loan" concerns health care reform. The second is a tax reform proposal called "The Object Tax."

Both reforms are about the flow of information. Both reforms seek to give individuals greater control over their personal information.

In both reforms I talk extensively about the flow of money. I see money simply as a tool to quantify the value of resources.

I often note that information follows the flow of money. But this is tautology because money is nothing more than a bit of information.

When one follows the money, one follows the primary flow of information.

In the current health care system, the money flows from centralized pools to large health care providers. Our health care information follows the flow of money back to the centralized provider.

The Medical Savings and Loan gives each person a Medical Account. The money flows from this account and health information flows back into the account. This gives the individual greater control over personal health resources.

Our current tax system is quite convoluted. The money flows from employers in the form of payroll with-holdings. Employers report the finalized payments on a W2 Form. People then file a tax return with necessary adjustments.

The Object Tax is named after Object Oriented Programming. This is a programming technique used in system design. It is used in the design of most operating systems, web browsers, smartphones and the Internet.

The goal of the Object Tax is to change the flow of the money.  Object Technology allows us to change the flow of money with minimal disruption. The process works as follows:

We start by making an object model of the current tax code. This model can be implemented as the current income tax.

We invite financial institutions to create new implementations of the the tax code.

A Tax Aware Account is one possible implementation. This implementation works as follows: Workers have their entire paycheck deposited into a Tax Aware Account. They pay taxes when they withdraw money for spending.

The design of the Object Tax allows for incremental change. Congress creates a tax code that can be implemented as the current income tax. It invites financial firms to create implementations of the Tax Aware Account.


We can rigorously test the implementations before putting them into production. Once in production, people would gradually adopt the new technology as they found it advantageous.

The program is based on the same solid design techniques as smartphones and the internet. This is a solid approach to reform.

The long term affect of the reform is that it would give individuals greater control over their personal finances.

In contrast, the Fair Tax takes the opposite approach. The Fair Tax replaces individual income tax with a national sales tax. The National Sales Tax removes the individual from the tax equation altogether.


From a system design perspective, the Fair Tax horrifies me because it cuts people out of the system. When you cut people out of the system, the system grows, but the people diminish.

I challenged Fair Tax Supporters to a debate. All I've received is a condescending remark and a put down.

As I pointed out in the previous post, Tax Reform is in the air.

The Object Tax and the Medical Savings and Loan are basically the same idea. The goal of both programs is to change the flow of money so that it goes through individuals accounts. Changing the flow of money would give individuals greater power over their personal information.

Giving people control over their personal information empowers people.

I fear that the opportunity to discuss free market health care reform has passed.

The issue of tax reform is in the air. Presenting a tax reform based on the principles as free market health care could set our nation on a path of restoring our nation's experiment in self rule.

The MSL and Object Tax

An ongoing series of IRS scandals has tax reform in the air.

A particularly loud group is pushing an ill conceived tax reform program called "The Fair Tax."

The Fair Tax Replaces the personal income tax with a whopping 23% National Sales Tax that will be added on top of existing state taxes.

Supporters of the FairTax make the false claim that their tax will end the IRS (tax collection).

What they are doing is replacing a personal tax with a business tax. This change reduces the need for individual audits, but will increase the need for business audits.

The Fair Tax places a 23% tax on sale of new goods and business to consumer expenses. Modern businesses tend to have extremely complex supply chains with multiple points of interaction with the mainstream economy. Deciding what is a final sale of a new item and the final sale of a service is extremely complex. It is as complex as the deduction problem.

The FairTax will require detailed business audits. Businesses will have to apply for tax ids and permits from the IRS. This gives the IRS the ability to target groups they do not like.

The current state income tax system is a complete mess. Different types of businesses have different tax rates. The rates are often collected through different agencies and have different rules. Food is often taxed at a lower rate than dry goods. Hotels are often taxed at a higher rate than clothes. Gas, you phone and utility bills are all laden with strange taxes.

If state sales taxes are a mess; then adding a national sales tax in the mix will create pandemonium.

For this last week I've been blogging against the Fair Tax.

The best way to defeat a bad idea is to create a better idea. With the other idea on the table, one can compare the ideas and see the fault of the bad idea.

While developing the Medical Savings and Loan, I spent a great deal of time thinking about the best approach to health care and tax reform.

Alongside my presentation on the Medical Savings and Loan, I developed a presentation called "The Object Tax."

The idea behind this reform is to apply proven design techniques from Silicon Valley to tax reform.

In the presentation I apply basic object oriented design techniques to tax reform ... hence the funny name.

The design starts by creating an abstract model of the existing system. Rather than taxing income, I simply state that I want to tax financial objects at some point between income and consumption using a progressive tax rate.

By breaking the current tax code into objects, I now have a tax code that can be implemented like the current income tax. I can also start experimenting with other ways of implementing the tax.

One way is to create a system of Tax Aware Accounts. A Tax Aware Account works as follows:

You have your entire paycheck (nothing withheld) deposited into the account. You pay taxes when you withdraw money for spending.

The tax aware account eliminates employee withholdings, w2, 1099 forms. If done correctly, it can eliminate the need for the annual tax return.

The great thing about this reform is that it does not require disruptive change. People happy with the income tax can continue to file yearly returns. It would only be adopted by people looking for a switch.

I wrote an intro to the Object Tax called "The Object Tax in a Nutshell"

With this reform on the table, I can argue that the Fair Tax is a Business Tax and not a true consumption tax. I make a variety of other arguments showing that the complexity of taxes is not the tax rate, but the process of accumulating tax info. With the Tax Aware Account, one touches a tax decision only once ... when you transfer money from the account.

The Object Tax is a much more elegant path to reform than the Fair Tax, and I put out a general challenge to the Fair Tax crowd to debate the issue.

My hidden agenda is that the Object Tax also happens to be the same basic structure as the Medical Savings and Loan. If my challenge to debate the Fair Tax is ever accepted, then I might be able to combine the two presentations in the same meeting.

I issued a challenge to debate the Fair Tax. I doubt anyone will take me up on the challenge, but if they do, I will be able to use the challenge as a vehicle to introduce the Medical Savings and Loan ... which is similar to the Object Tax.

AAPS Presentations

AAPS in Tucson puts on great presentations about ObamaCare from a doctor's perspective.

In the video below, Adam Harris, MD brings argues that doctors should stop accepting Medicare and opt out of ObamaCare if the laws become too intrusive.


The good doctor makes a compelling argument. Unfortunately, the case for doctors opting out of ObamaCare do not come across well. The good doctor sounds like a greedy capitalist complaining about pay and too much government intrusion.

The AAPS and AMA suffer the same problem. Doctor's have an incomplete perspective of health care. The real power of the opt out arguments comes on the consumer side. For the opt out argument to win the day, there needs to be someone arguing from the perspective of the individual.

I put together such a presentation five years ago. I am just patiently waiting to find someone to review it.

Dr. Keith Smith

Dr. Keith Smith talks about fee for service medicine and why it reduces costs and delivers a better product.

The Enemies of Freedom Hold Meetings. Why Won't Supporters of Freedom Act?

Years ago I did some contract work for a scary group called KPMG. I worked for a division that was creating a simulation for accounting systems.

In traditional accounting, one records and classifies business expenses to the best of their ability. Investors can then make investing decisions based on the information at hand.

Computer technology allows a degree of separation between the recording and analyzing the data.

The group I was with took accounting data and ran simulations to see how they could manipulate the appearance of a company. In my brief contract with KPMG I learned that computer technology empowers creative accountants to fix the books.

If a roll of toilet paper were used in the manufacturing division, that roll of toilet paper would be an expense. If the same roll of toilet paper was used in the research department, then it could be presented as a capital investment. Investors hate expenses by love to see investment in research. Simply moving the toilet paper from one category to another impacts the perception of the company.

I refused to continue the contract. Whenever I see the initials KPMG, it tweaks my suspicion.

A tweet showed up today pointing to a huge conference on health care held by KPMG held in Rome.

The report talks about how KPMG aspires to be an "activist payer" in the healthcare market. The activist payer is a rich and politically empowered third party.

The fact that KPMG is holding expensive health conferences in Rome does not upset me.

What breaks my heart is that, for some unknown reason, defenders of freedom refuse to engage in similar meetings.

Why is it that Conservatives refuse to meet to discuss free market health care?

My goal for the last five years has simply been to find a group of people within 700 miles of Salt Lake City that is willing to talk about healthcare. 700 miles is a full day's drive. I know camping spots from here to Flagstaff.

The circle I've drawn around Salt Lake is huge. It includes Denver, Boise, Cheyenne, Phoenix, Las Vegas, Reno, Colorado Springs, Steamboat Springs, Grand Junction.(Yes, the links go to directories that I've made for these towns.)

In five years of looking, I've been unable to find a group willing to meet to discuss free market health care reform.

Because people in the freedom movement refuse to act, our healthcare will be thrown to the mercy of the "activist payers" at nefarious groups like KPMG.

Finances Says Otherwise

Tax day forced me to face financial reality.

I am now no longer financially able to drive to Arizona to host a meeting.

I spent every dime I had between 2008 and 2010 trying to find people in the mountain west willing to stand up for freedom. 

I figured the cost of driving to and from Phoenix, renting a hotel room and conference room for the meeting would be range from $500 to $750.

I was willing to take out a loan. I've been left hanging so long that I can no longer come up with the money for a trip.

I am selling the domain MedicalSavingsAndLoan.com on GoDaddy. I will keep the domain HCA.me.

Personally, I am devastated that we've become such a pathetic people that no-one (within 700 miles of Salt Lake City) is even willing to take an afternoon to talk about the most important issue of our day.
 
In five years of searching, I had one offer to drive all the way to San Diego, but I didn't have enough money to get back.
  
The meeting would present the idea that the Achille's Hill of ObamaCare, RomneyCare, the state run Health Exchanges and State Run Health Coops is the false assumption that insurance is the only way to fund health care.

The way to beat the power grab is to create an alternative business model for funding health care. But if there is no one who care enough about freedom to talk with a neighbor, then we deserve every bad thing that we get.

What I am Looking For

I have a workshop on free market health care reform that I've been hoping to present.

The workshop will take several hours. In the work shop I create a model for self-funded health care. I use a combination of savings accounts, a loan reserve and grants. I then create a model for group funded care. Insurance and socialism are both forms of group funded care.

With two models in place, it is possible to explore the difference between self-funded and group funded care.

My model indicates that group funded care underserves the lower and middle classes and that it has the pernicious effect of concentrating wealth and power in the center.

I contend that the problem in health care is the use of group funding for individual consumption and that the way to improve things is to restore the concept of self-funded care.

In the modern political context, I argue the following. The current health care debate is based on the false assumption that insurance is the only way to fund health care. The weak point of ObamaCare is the insurance mandate.

The way to defeat ObamaCare is to expose the false assumption and to create an alternative to insurance.

If we had an alternative to insurance that served the working class better than ObamaCare, we could expose this fiasco as the regressive legislation that it is and possibly put our nation back on the path of renewal.

I live in Salt Lake City.

What I am hoping to find is a group within 700 miles of Salt Lake that is willing to make a firm commitment to hold a meeting on Free Market Health Care Reform.

By group, I simply mean a few people who have a firm commitment to attend a meeting. If someone told me that they could guarantee that six conservative or libertarian leaning people would meet in, say, Grand Junction on May 15th, then I would be delighted.

The workshop takes a few hours. We create a model for self-funded care. We then create a model for group-funded care, then discuss the differences between the two models.

People who attend the workshop will see the health care debate in a new light and will be empowered to promote free market health care reform.

What I am Selling

My meeting will argue that the problem in health care is overuse of group funding for individual consumption. The solution is to create a self-funded model for health care.

I will argue that funding health care is a business problem and that we need a business solution. The path to solving the health care problem is to create new businesses.

I created an entity called the "Health Care Advocates Association." The goal of the HCAA is to create a new business model for funding health care. In the meeting I will sell the idea that we need an organization dedicated to the creation of a new business model for funding health care. The absolutely worst thing that will happen to people who attend the meeting is that I will talk about starting businesses and organizations.