Every April 15th as people hustle trying to get their taxes turned in I am reminded why I dislike income tax and would prefer a national sales tax. It would be less costly to administer, it would allow more people to participate in the funding of our government, and it would reward the saving of money.
Today is the end of a strong annual run for the tax preparation industry. Billions of dollars are wasted every year in the preparation of tax documents, spending on tax attorneys, and funding the IRS. Large portions of this would be eliminated under a national sales tax.
Today, millions of people that are in our country illegally only pay sales tax. The don’t pay income taxes. Some people that are here legally also don’t participate. That cost us all money. These people would be less likely to miss the honor of funding our government with a national sales tax.
Finally, tax policy influences behavior. Even liberals believe that sometimes. Why are we punishing those people that are earning money? We are sending the wrong message. We should encourage work and productivity by not taxing it. We should make people pay taxes when they consume goods. This also would increase the savings rate and the supply of money available for economic expansion.
The arguments generally are that this is a regressive tax. Whatever. Right now we have millions of people that are taking full advantage of our "progressive" tax system by not paying a cent. The report below actually covers the regressive nature of this proposal.
This is an issue that deserves more discussion at the national level. I believe it is something that would improve our country.
April 15th, 2008 at 12:00 am
Of course it would also encourage black markets on sales and disproportionately impact the poor, especially the elderly who have to spend a certain amount just on basics to get by.