Wall Street Journal op-ed (membership required) concerning the consumption taxes option in fundamental taxes reform is, of course, excellent and really worth reading. But his evaluation reflects some underlying assumptions that I’ve for a long time questioned. Although I am more of a usage tax advocate (supposing maintained progressivity) than he could be, I question these studies due to an important underlying assumption that he is completely straightforward about.
A key component of the GDP (and efficiency) gain that he finds is the wealth levy on holders of existing possessions that would arise upon enactment without changeover relief. Since this is one-time-only wealth taxes ostensibly, he models it as a lump-sum (i.e., as having no effect on future behavior because people do not be expectant of their wealth to be taken again). My objection spelled out at duration in my reserve When Rules Change is twofold.
Second, I believe of the wealth levy as conceptually and virtually unique from the shift from income taxes to a usage tax. If you like the ostensibly one-time capital levy, you might have it without switching taxes systems. As Bradford showed, wiping out tax basis, and once only once, while retaining the current system would impose a comparable transition hit otherwise, although admittedly it could be trickier to make people believe the “once as soon as only” claim. Or we could enact, say, a one-time 25% prosperity tax, plus a constitutional amendment to again avoid us from carrying it out. Alan and I have discussed this issue before, and I believe we agree about the basic analytics. We will have a chance to discuss it further Perhaps. For individuals who follow the NYU Tax Policy Colloquium, which I co-taught with David Bradford before tragedy last February, I will be co-teaching it with Alan in winter/spring 2006, which he shall spend at NYU as a visitor.
Are all commodities accounted for and consolidated? Are commodities aggregated across the enterprise? How does each supplier fit into the spend? Are formal agreements for the majority of the goods there? Does each commodity (category) have a sourcing strategy? Is every (key) stakeholder accessing and using the system? Are contracts being continuously monitored for compliance?
- System Administrator
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- Formal and informal connections to departments
- 20C is about 68F . . . I think you may have designed to say 2C
Is there continued support from C-level management? Does the platform incorporate best-of-breed features? And so are they being used? Is a shared-service approach to source development being followed? Optimize the supply base. If there are more a small number of suppliers for the same product then, consolidate. If a commodity is being solitary sourced, increase to mitigate risk.
Find the right balance. A business should learn from each and every spend analysis project it undertakes. The key to continued organizational success in the long-term is to institutionalize the knowledge gained. Continually document what is discovered, add it to a centralized knowledge repository, and improve organizational processes frequently. Probably the most successful projects are those that involve and have the support of, every one of the key stakeholders.
Invite everyone to participate, gather opinions, and action on every one of the guidelines received. Analysts should build many different datasets to explore commodity-specific and other data sources that contain more detail than “classic” accounts payable data. The current economic tough economy has placed a bigger, brighter limelight on cost decrease activities than previously.
That’s why today’s generation of advanced Spend Analysis tools improve how data is collected, cleansed, categorized, analyzed, and managed- providing new levels of real savings much beyond its cost. Greater insight and shorter lead times allow companies to make better business decisions across all levels of their organization. By identifying and achieving cost savings, companies increase their success immediately.
