Imagine if you will a world where only old people remember why April 15th is important. Or when "What is 1040 EZ?" is a correct response on Jeopardy. We could be there sooner than you think. In
this article, one of the President's economic advisors says that the switch from an income tax to a consumption tax could be easier than many people think.
here's a brief collection of comments from the article:
N. Gregory Mankiw, chairman of the president's Council of Economic Advisers, [believes]...that tax laws discourage saving and investment and that changing that could free up money for business investment... Under a consumption tax, Mankiw said, "The result would be greater saving, increased capital accumulation and higher growth in productivity and wages."
Amen! The tax on earnings we currently slave under is much more painful and economically restrictive than a tax on consumed goods would ever be. Just think, you would pay your taxes one little hunk at a time, rather than the big hunk of change on April 15.
But there are many more advantages. For starters, people would be intimately aware of when the Democrats wanted to raise their taxes, because they would notice it every time they bought something that was taxed. This is far better than the largely hidden tax system we live under today, in which the government quietly steals money from your paycheck every couple of weeks with you scarcely noticing it. Second, the large underground economy would be taxed because the income from porn, drug, sex, and all other things illegal would be taxed when those profiting from it bought something. Third, what could be more fair? Those who have a lot and buy a lot would pay a lot, and those who scrimp and save would pay very little. Fourth, one of Big Government's best tools to screw around with our lives, the tax code, would not exist. Congress could focus its time on something more productive than a four inch thick book of loopholes and incentives. Finally, the multi-billion dollar bill we collectively pay each year to comply with our bloated tax code could be spent on something better like books, opera tickets, or flat screen TV's instead of lining the pockets of accountants and IRS officers.
I know many will say that such a system would be regressive and EEEEEEEvil. They prefer the profligate waste and corruption our current system supports and legitimizes. Then again, they also think that socialized medicine is a neat idea.
They are wrong on both counts.
RMR