Let’s pick up where our IRS-defunding I&I editorial board brethren lately left off: “There is … a better way to fund federal operations. Move to a single-rate income tax paid monthly with no deductions and no withholding, or implement a national sales tax.”
This commentator chooses National Sales Tax for several trillion dollars, Alex. While he has engaged in many exercises to explain why that levy solves a whole range of problems, here are some highlights in Lettermanesque fashion – the Top 10 Reasons for a National Sales Tax:
10. Keep it simple, stupid! Flat tax or no, the biggest problem with an income tax: it’s on income. The complexity and intrusion relates to determining what is and isn’t, and tracking, income.
Uncle Sam gets to snoop on hundreds of millions of taxpayers to make sure you’re not hiding income. Admittedly, for most taxpayers calculations get simpler without deductions, exemptions and the like. But eliminating withholding would only increase demands for government to stick its nose into your business to ensure you’re not getting money under the table. Especially for the self-employed.
Even many employees get income from multiple sources, including savings and investments. The revenooers want all those records, plus taxpayers will also have to pay monthly to account for non-payroll sources. Who’s going to tell them how much? Certainly not the IRS. Citizens will overpay to be safe, still being stuck with near-compulsory overcharges.
Moreover, what about the corporate income tax? Twenty-seven million private companies generate billions of calculations and pages of required record-keeping. Will that tax also be flat? Gucci Gulch is guffawing.
A sales tax? One number for companies: percentage of sales. For consumers? No record-keeping, filing, or engaging professional help to pay a bill for a service. And no spying on individuals or companies other than sales income.
9. Jobs, jobs, jobs. The second reason taxing income (and payrolls) stinks: your government taxes work and hiring. While paying people not to work. Madness.
Leveraging a sales tax to eliminate business as well individual income taxation would generate a historic supply-side growth spurt, making re-shoring of jobs back to flyover country a near-imperative.
8. Decoupling: That onshoring would advance a long-needed decoupling from our enemies in China. ‘Nuff said.
7. Transparency + skin in the game = fiscal discipline. Worried about government spending and debt limits? Show America exactly how much it pays for government.
Even under a flat individual tax, the cost of government will be different for every taxpayer, embedded in every price via business taxes paid, economic distortions/lost productivity and mind-boggling compliance and avoidance costs: buildings full of accountants and lawyers angling big companies’ tax bills down to zero.
With a sales tax, it’s one number: some percentage of sales appearing on receipts for every purchase. Presumably, Republicans would drive that number lower than Democrats, spurring voters to comparison-shop and demand fiscal discipline. By the way, it’s why this pundit no longer favors versions of the FAIR Tax wiping out tax liability for lower-income Americans. Skin in the game is essential to changing voters’ calculus regarding Big Government.
6. Disinflation. Washing out of prices the hidden costs of government and economic distortions would make everything cheaper, and again, government’s actual cost easier to see.
5. True equity. Let’s talk fairness: productive Americans will still pay most income taxes. With the sales tax, everyone pays the same percentage – and benefits from a stronger economy and cheaper goods.
4. Entitlement bills coming due. Again, don’t forget payroll taxes. Pending insolvency means Social Security and Medicare benefits will be cut (again) and payroll/self-employment taxes raised (again). Moreover, another current code inanity: taxing people for saving. Uncoupling old-age programs from payroll taxes will allow a re-thinking – ideally, privatization. And incentivize individuals to salt away more for their futures.
3. Less debt. One major reason for the 2008 financial crisis, the current bank failures panic and recent layoffs within Big Tech: market distortions from favoring debt financing over equity. Plus dipsy-doodling with incentivized borrowing makes corporate balance sheets indecipherable.
2. Family formation. Letting families decide to keep more of their own money, plus restoring well-paying jobs for men in particular, will make it more conceivable for strained Gen Z couples to marry and, pun intended, conceive. Which is critical as drying-up fertility is already wreaking drastic economic and fiscal consequences.
1. More power –– and privacy and freedom – to you. Think the government is the biggest problem facing America today? Wait until its full might is unleashed by an increasingly tyrannical, spendthrift leadership.
Big Tech, Big Business and Cancel Culture can isolate and deprive you. But as your I&I editorialists made clear, Big Brother, with its whip hand, the income tax, allowing seizure of wealth and untrammeled intrusion into private lives, can crush you.
The exposure of an ex-president’s tax returns reinforces that citizens have no privacy and no rights. They came for conservative advocacy groups first. They came for The Donald next. Rest assured, they will come for you next.
For these 10 reasons and hundreds more, it’s time to come for the IRS instead. Long past.
Bob Maistros is a messaging and communications strategist, crisis specialist, and former political speechwriter. He can be reached at bob@rpmexecutive.com.
Using these vague “policy violations,” Google is now threatening to demonetize us. It’s part of Big Tech’s effort to silence conservative voices.
While all of these are good ideas and needed I fear that unless a Flat Tax or National Sales Tax is restricted from being increased without 3/4 of the State Legislatures approving it then Congress will just put us right back where we are now. One only has to look to Europe to see the creep in the Value Added Tax (VAT) in which duties, shipping costs are added to the cost of goods before the VAT is applied. Frankly I do not trust Congress and the People need to give approval to increases via their State Legislatures. It is called Checks and Balances as opposed to letting Congress run fiscally amok.
Well, of course, no reform can happen in a vacuum. Together with tax reform must come a return to the Constitution on all matters of government. Which means vastly reducing federal expenditures by eliminating not just the three department Gov Perry couldn’t remember, nor just the ones Vivek Ramaswamy is proposing, but a wholesale eradication. Once we ask what is the constitutional justification for HHS, DHS, Labor, Transportation, Housing, Agriculture, Energy, Education, their defenders will be stuck for answers. Even the VA — I’d give all combat veterans unlimited housing/medical credit cards to use as they need rather than forcing them to go through the bureaucratic nightmare the VA became! Even with some measure of abuse, it would still be much cheaper, and better for the vets. As is true with nearly all agencies relating to their respective constituencies. As for Commerce, the US is constitutionally obliged to regulate interstate commerce, so that one can stay, with responsibilities limited to that. Other non cabinet agencies for the chopping block include all the usual culprits – IRS, TSA, EPA, ATF, CDC, FDA, a plethora of “intelligence” agencies, plus a host of others — do we really need a Surgeon General? — there are over 400 of them! Few would be missed were they to disappear overnight. And no doubt all the surviving ones could be trimmed back severely.
To quote the Honorable Jim Hacker: No buts: Cuts!
A sales tax replacing the income tax still requires addressing the question of what is to be taxed. Every transaction, including for services and not only products? Big ticket one time purchases like homes? Sates have sales tax exemptions for food, medicine, and other “necessities”. As we saw from the pandemic mismanagement, it matters who decrees what is “essential”. I foresee special interests fighting hard over plausible exemptions, so there should be none — as we all supposedly benefit, we all should be invested in sponsoring government services. But can that fly, politically? While we’re at it we should also abolish the FICA and Medicare taxes; those too are part of the general government services. (If we keep those …)
In principle, it’s a great idea. It’s also a new bonanza for a whole class of lawyers. How do we keep it so simple that everyone understands it? And it places an extra burden on every business, making them in effect the nation’s tax collectors. Do we want that? It is also crucial that the tax be applied only at the last point of transaction, to the consumer’s purchase of the finished product, not from one middle man to the next. Lots to keep the lawyers busy …. !
Lastly, now that the data collection apparatus is fully deployed, how can we stop that? Abolishing the IRS, though absolutely necessary, still does not end the spying by government on all our activities, unless we specifically tear down that capability too.
It’s a good, essential start, but the devil is in the details.
President Trump’s campaign team gets it right and releases ‘Ron DeSalesTax’ ad
Debunking Ron DeSantis’s 23% national sales tax policy.
Essentially you would get a value added tax at every stage of the economy, and the suggestion is a 23% rate (until it’s inevitably raised).
It is an extremely regressive tax. The rich would do just fine; they have an ample cushion to absorb the “dramatic increase” in costs, but the poor and middle classes don’t.
https://www.americanthinker.com/blog/2023/05/president_trumps_campaign_team_gets_it_right_and_releases_ron_desalestax_ad.html
No, a sales tax is not necessarily an Value Added Tax (VAT). It should be applied only at the last point of sale, by the ultimate consumer. And the legislation establishing it could include severe restrictions on future rate increases, such as requiring the same level of consensus as for ratifying a Constitutional amendment.
Will the “revenooers” find loopholes and excuses to raise it anyway? Of course. When is that not true?
Our only hope, really, is that Mr Trump, or someone with the same determination and thick skin, dismantles the entire administrative state, and voters throw out the skimmers who populate Congress. And we need to face the fact that our entitlement programs, both the earned and unearned, are unsustainable, and need to be pared back to aid just the very few who are utterly incapable of looking after themselves. Otherwise, we get the ruination we deserve. Nearly all fully employed people have the means to plan for their own retirements and medical expenses. Unless our education system has already succeeded in creating a thoroughly incompetent population.
I can elaborate on this if interested.
I just think about the Post Office and the three cent stamp, except a national sales tax is a percent which has a maximum. So when they reach 100%, then what?
Actually, unlike an income tax, there is no limit to a sales tax — it could very well go up to 110%, 150%, 1000% — there’s no mathematical limit at all! A $100 item could cost $300 when including the tax! Frightening, ain’t it?