Something to think about...
ALAN KEYES, IN MY ESTIMATION, is probably one of the most eloquent conservative figures presently in politics. Frankly, he was my favorite in the GOP Primary in 2000, alas he never garnered more than 10% of Republicans' support in polls, even at the best of times. Of course, he was running against two folks with far better political machines. Now that we have McCain and Bush working together so that we don't have to face four scary years of Kerry, the most liberal member of the senate, and his running mate, the fourth most liberal member of the senate (“the balanced ticket” they say…), it looks like the final member of the GOP 2000 trio is back in action too.
As you've all undoubtedly heard, Keyes is running for the senate seat in Illinois being vacated by Sen. Peter Fitzgerald ®. Jack Ryan might have been the original choice of the people of Illinois, but I think Keyes could be the really great blessing in disguise of the whole scandal mess concerning Ryan. Keyes has the oratorical skills needed to compete with Barak Obama, and his national renown should help fund raising efforts (a very important thing since he has to raise enough to compete with Obama's $10 million dollar war chest in just three months).
One thing Keyes would like to do is abolish the IRS. That's right, read his lips… no [income] taxes. Not “no more taxes,” but no IRS taxes at all. The interesting thing here is that this has been desired by conservatives for years, but never came to the mainstream until just last week. Last week, speaker of the House Rep. Dennis Hastert (R-Ill) started talking about pushing a plan to abolish the IRS in favor of a national sales tax if President Bush is in office over the next four years (because tax hiking liberal Sen. Kerry would never go for it).
Here's the deal. For most Americans, you'd probably pay the same amount to the government every year. Because, most Americans don't save their money, they spend it. So why is this a good thing? First, let's consider the obvious: does anyone really enjoy filling tax returns? Your time, money spent to pay for tax filling services and programs and so on are all things you would be saving. Most importantly, the money would stay in your pocket for longer. If you aren't self employed, most likely, your tax payments are coming right out of your check and straight into government coffers. With a sales tax system, it would stay in your pocket until you bought something — thus you'd make interest on your money.
Furthermore, many important things such as education and services aren't taxable. That makes Sen. Kerry's proposed tax credit for college education look down right small. Unlike a tax credit, you'd keep the money rather than waiting for a refund check to get your money back. You'd keep your money in your pocket where it should be. It would also encourage people to invest in the stock market and other long term investments because you wouldn't pay capital gains taxes when you pulled your money out to buy things after already paying taxes on the money when you earned it. It'd be the end of the death tax (double taxing at its worst) and the marriage penalty.
Something tells me if Americans vote for more positive change through four more years of Bush-Cheney, and Illinoisans vote for two more years of Rep. Dennis Hastert and six years of Alan Keyes, we could see some really great common sense changes to the tax system. Let's hope this happens!
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RE: Something to think about...
Hmmm. I’m not convinced [about the tax thing] but I’m open minded. I guess my first question is: what would the sales rate be? (Or rather, what would it have to be in order adequately cover the current income tax…er income.)
RE: Something to think about...
I’m like Jason, I’m open minded but not convinced. I am definitely interested in simplifying the whole thing and a sales tax would do that.
RE: Something to think about...
I think some have suggested around 20% as the tax rate. It would be painfully high looking when you bought something, but considering that ~ 30% of the average American’s income is taxed now… It would probably reduce the overall income of the government. But, the government might be able to cut back on some services since people would have more money to spend.
I’d need to look into the figures more, but I think it could definitely be a good thing. Another thought: if you got rid of the IRS, and thus were able to fire thousands of bureaucrats, you’d save a lot of dough. That might not make up for the loss, but it would lower it somewhat.
Another sensible thing to do might be to remove Federal aid to states (at least as much as possible) and have the states follow suite with sales taxes to pay for what is currently coming from Federal taxes.
If that didn’t work, combining a sales tax with a sensible, small flat income tax (say 5%) might do the trick.
RE: Something to think about...
I think, for the most part, like I said, you could adjust the percentage to get it so most people paid almost the same amount in taxes, only without all the paperwork (and, they wouldn’t pay on the kinds of things that aren’t normally taxed by sales tax).
The only problem I can see, when I think about it, is someone taking millions of dollars and spending it at some “tax free zone” somewhere abroad. Perhaps if you take the money out of the country you have to pay an income tax on it, but if you keep it in the U.S. economy you only pay sales tax?
I’m not quite sure. But I do think it could be made to work very easily.
RE: Something to think about...
I’m definitely open to replacing the IRS with something simpler. Federal sales tax would also generate revenue from illegal activities - e.g. drug deals, under-the-table work, etc. Not that these would be taxed at the point of trade but the when the cash was used to buy something. This doesn’t mean I support legalization of drugs but the government may as well collect money from it while it combats it.
I do wonder if this is just election cycle bluster though.
RE: Something to think about...
Hastert’s comments may be… but I don’t think Keyes’s comments are (since they are part of his standard position prior to entering the senate race). I do hope they seriously look into it.
RE: Something to think about...
Tim
Do I understand you correctly when you said “you could adjust the percentage to get it so most people paid almost the same amount in taxes.”?
If I do, why would you want this? Wouldn’t you want the amount of taxes to go up proportional to joint family income?? Personally I like the flat tax, but that has its problems too.
As for overseas “savings”, just ask Kerry’s wife how to do that since its reported that more then half of her “net worth” are in the bahamas somewhere.
RE: Something to think about...
Mark — By almost the same amount of taxes, I meant as you currently pay.
Some people would pay more (those who spend more than they earn), perhaps; some would pay less (those who save most of their money)…. but overall, I think the goal would be to put the tax burden somewhere in the neighborhood of its current location. I don’t expect the government would be willing to go on too big of diet all at once.
Hopefully this makes more sense…
RE: Something to think about...
I once volunteered to campaign for Keyes during a presidential primary. They never so much as acknowledged my letter. That was about the same time I was just starting Political Science classes at teachers’ college. After taking all those classes, I did get a chance to see campaign stuff from behind the scenes. That’s when I became cynical about the whole thing.
A national VAT tax is far cheaper to administer, and enforcement is vastly simpler. Targeted breaks are far easier to implement. The president could do it today, because the whole IRS rests purely on executive authority. This would also bring our nation in line with the tax scheme used by a majority of Europe. They use it to indirectly regulate economic behavior. For example, the Dutch government officially discourages private auto use. Thus, in the Netherlands, half the price of a car is taxes. Fuel is treated similarly.