Home of Today's Common Sense

Submitted 8/25
While surfing the Cable Channels recently I came across Congressman D. Hastert speaking, on one of the talk shows, about a national Sales Tax with certain rebates to lower income groups as an alternative to the income tax.
The idea of tax reform has been with us since the time of the Boston Tea Party and in effect “Tax Reform” is a large reason for the birth of the United States.
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The war cries are numerous “only the top 10 or 15 percent of the taxpayers pay 80% of the taxes”, “the rich don’t pay enough tax”, “the middle class pays too much tax”, “the tax system discourages people from seeking success”, “the government is confiscating my hard earned money in taxes to give it to people who don’t want to work”, it goes on and on. Many more are voicing complaints about the payroll taxes, which to my way of thinking are not really taxes but premium payments on insurance policies providing health benefits, unemployment support and supplements to retirement.
Certainly, the current tax system is broken! It is so complex that no one understands it, not the tax preparers and especially not the IRS workers. There are many instances where inaccurate information has been given out by IRS; and the proliferation of tax lawyers and accountants further testifies to this.
The costs related to tax compliance when considered as an additional tax is staggering.
The proposal to change from a tax based on income to one based on consumption isn’t as bad as many would have you believe.
Those in opposition say it is unfair to tax spending as the poor would bear an unfair burden of being taxed. The effect of income taxation is being transferred to the poor now! If any producer or seller of products did not include the tax costs and the costs of compliance in the price of his products that business would not remain open. When you or I purchase any product the taxes are then transferred to us. So as a bit of an oversimplification you could say that, doing away with IRS and the Income tax, cuts out the middleman and removes a big chunk of associated costs. The result of a change like this would reduce the overall cost involved in paying and collecting taxes which is good.
What really concerns me even more are possible other consequences. Currently when taxes are paid you can see on April 15th how much income tax was paid and become suitably upset but if you can’t visualize how much tax is being collected and spent, it can be easy to overlook the impact.
In the here and now we take many taxes for granted just because we don’t see them, such as import tariffs, fees for food and meat inspection, airport security fees, gas taxes, taxes on tires, fees to dispose of tires, garbage collection fees, and the such. Even more insidious are the costs the government imposes on us when it wants to give us something. When you get a loan from SBA the rigorous reporting requirements and restrictions can be expensive to satisfy, when the government provides grants or benefits to education, community services etc. the reporting to show that the money was spent properly is expensive to produce (one need only look at the number of administrators at BISD), costs related to complying with OSHA requirements, costs required to comply with equal access for the disabled are all really additional taxes and are passed on.
If we change to a system of National Sales Taxes or a Value Added type tax, it would become too easy to take them for granted and not be concerned with what our representatives are spending our hard earned money on.
The Customs people would also then become the new IRS, catching us trying to circumvent the sales taxes by buying overseas and smuggling, at least they would encourage buying our own production.