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Skeleton Government
Structure
A skeleton government consists of a nation's departments that are scaled-down versions of themselves (or "bare bones") when considering the minimal services that they provide.
Advantages
The primary advantage of a skeleton government is that it will allow for an extremely low tax rate. On average, a 5% tax rate would be the norm though an even lower tax rate may be possible.
In America, reducing the tax rate for individuals from 25-33% to just 5% would greatly improve personal welfare by a significant amount. Reducing corporate taxes from 21% to 5% would allow businesses to hire additional workers and offer greater incentives to their employees as well.
In addition, a skeleton government will only tax wages and nearly all other forms of taxation will be eliminated. The gift tax, estate tax, capital gains tax, etc., will no longer occur. Gambling and lottery winnings become tax-free as well as tip income received from customers. Retirement plans become tax-free though pretax contributions will no longer be permitted to ensure a steady flow of income for the reduced government.
Since only wages will be taxed, the need to file taxes at the end of the year will no longer be necessary. Employers will simply withhold the appropriate amount of tax from an employee's paycheck, and it's done. There are no deductions, credits, or other adjustments since the government should treat everyone in an equal and fair manner regarding their individual life decisions (e.g., single or married, rent or own home, children or none, etc.). The same for companies where only revenue will be taxed and deductions will no longer be permitted to ensure fair taxation among all businesses.
Other Considerations
To further improve efficiency, a skeleton government will also adopt a project-oriented, or P-series, government bond system. So, rather than an open-ended fund that encompasses all federal programs, every project will have a separate P-numbered bond that will encapsulate government programs better (e.g., no more dipping into a general fund that hides cost overruns, or siphoning funds meant for other projects). A project-oriented bond system also allows the public to have greater discretion on which projects should be funded compared to others regarding their ethical considerations.
For example, suppose a new project was created for clean energy (wind/solar) to replace fossil fuel dependency. A unique P-numbered bond will be assigned to the project that will primarily be funded by private investment. The role of government will be to initiate the project, facilitate public funding, and assist with its general management. Redemption of the P-series bond will be provided after the project is completed (e.g., it pays for itself after becoming fully operational), so only a minimal amount of federal tax dollars will be given to the project if any.
To achieve a skeleton government, dramatic cuts in government spending will be necessary for the nation. For example, a 5% tax rate will require the active military force to be replaced with an unpaid volunteer force (much like the Minutemen of colonial times). In doing so, the defense budget will primarily be used for maintaining special/elite forces, while a smaller portion will be allocated for the volunteer training camps. In any given year, however, taxes may be temporarily raised for weapon procurement whenever needed.
Nations will need to evaluate if having an excessive military force is necessary for their country's needs. For example, since World War II, America's involvement in various conflicts were against popular opinion that shouldn't have resulted in military action. In fact, only the 9-11 incident involving the World Trade Center required the use of their military to resolve the situation. So, in America's case, only one incident in the past eighty years necessitated military action which doesn't justify excessive defense spending over the years.
When considering the minimal need for military involvement is combined with the overall effectiveness of pure democracies around the world (that prevents wars by its very nature), nations will need to evaluate if excessive military spending is appropriate for them in the future. The "walk softly and carry a big stick" philosophy of maintaining a large military presence in order to intimidate others did very little for America's case (e.g., Somalia, Iran), or Russia's (e.g., Afghanistan, Ukraine).
Another factor is if every nation adopted a skeleton government with its low taxation policy, economies would improve to the point where the general population would be more satisfied and content in life. This encourages goodwill among people that will result in fewer hostilities around the world. The combined effects of pure democracies and skeleton governments will promote world peace at a level that didn't exist before in the world. With these new factors in place, nations will need to decide if excessive military spending will be necessary for them into the future.
On a domestic level, additional cuts in government spending will be necessary to achieve a skeleton government with programs being replaced with better alternatives. Listed on this website are examples how to resolve government pension plans (c.f. Social Security), debt issues (c.f. National Debt), health care expenses (c.f. Medical Insurance), costs on goods/services (c.f. Inflationary Tax), among others.
Even entire programs may be eliminated such as replacing the failed incarceration system that hasn't deterred crime for years with a more effective punitive system (c.f. Eye-For-An-Eye Justice System). Or, impose an exile measure since criminals have failed to uphold the laws of the country (c.f. True Citizenship).
State/province and local city governments will also be reduced to their skeleton equivalents. State sales taxes and local property taxes will be eliminated in most cases since only wages/revenue will be taxed by the government.
In principle, a skeleton government should have a maximum 15% total tax rate for federal, state, and city combined. Voters will decide how this may be divided (e.g., 3% federal, 4% state, 8% city).
Municipal cities will have a higher percentage to accommodate everyday needs at the local level (e.g., police, fire, schools, road repair, garbage collection, etc.). Schools at the collegiate and K-12 grades will require less funding when replaced with a better alternative (c.f. Free College). Eliminating property and workplace city taxes will require federal/state taxes to be under their 5% maximums to allow for a greater portion to be used for residential city taxes.
Overall, there will be significant spending cuts across all areas to accommodate a skeleton government's 15% maximum tax rate.
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