The tax deadline is upon us, and many of us still need to file our returns or are waiting for their refunds to hit their accounts. (Me, I filed in January, that money is LOOOOOOOOOOONG gone!) One thought I keep thinking is, can we just not do this?
Most people seem to agree that our tax system needs to be repaired in some way. The rich could pay more, the rich could pay less, there shouldn’t be so many deductions, etc. I keep asking why should we even tax income period?
Right now, the more money people make, the more you get taxed. This is a harmful paradox of our financial system. If you make more money, you should not be rewarded with a higher tax rate. You should be rewarded with more money.
Let’s eliminate the income tax completely. It is sheer lunacy that we reward increased production, increased work, increased performance, with increased taxes. The income tax seeks to transfer any positive outcomes due to earning an income from the individual to the government. We should replace the income tax system with a system that taxes people based on their consumption and takings from the environment and society- a national sales tax.
One of my Reynolds School of Journalism professors, Ben Birkinbine, taught me that if you buy a good, whether it be food, clothing, electronics, etc., you prevent someone else from using that good. Every bite we take, every thread we wear, every gallon of gas we guzzle, we take from society. We take the resources needed to make it, we take the time it took to make it, so on and so forth. If we’re taking something away, that’s when we should pay. A national sales tax would serve as society’s charge for consumption.
My idea is derived from the FairTax, a national sales tax designed to replace all income and corporate taxes. First, the FairTax would be 23 percent inclusive sales tax on all goods and services at the final point of sale. That means if you spent $100, $23 of the price goes to taxes. This translates to a 30 percent sales tax in the traditional sense. Also, corporations do not pay the tax if the good or service is meant for resale or for strictly business use. Another large feature is the “Prebate”, which would be a check sent to every American every month in order to cover the costs of the FairTax for household necessities like food and clothing. All these factors together make for a rather nonsensical application of the sales tax. I suggest the following corrections:
A Three Rate System
While a main feature of the sales tax is a flat rate (in Nevada), if a national sales tax were to be implemented, we should institute three tiers of taxes based on the nature of the good and service. For simplification, the tiers would be five, 10 and 20 percent. Five percent for essential purchases, such as food, medicine, routine health services, etc. Another category for the five percent rate is anything that reduces energy consumption to serve as a tax break/thank you for responsible ecological decision making. Lastly, five percent would be applied to purchases made in charity shops, like Goodwill or Savers. The ten percent tier would be for most goods and services, like clothing, books, etc. A 20 percent rate would be attached to items that are “luxury” in nature, such as gas-guzzling cars, yachts, vape pens, etc. With three rates, we can try to steer public buying towards categories that are better for society as a whole and away from the needlessly wasteful. Also, many states have multi-tiered sales tax systems, so the logistics can be relatively easy to solve.
We should follow the Walmart and Winco example, keep the rates low enough so that large-scale welfare programs such as the Prebate are not necessary.
I’m for tax fairness, corporations should pay taxes at the same rate people do, there shouldn’t be a rule that allows corporations to not pay taxes.
A beauty of a national sales tax is that it would spread the tax burden as far as possible, to any person or entity that utilizes our national resources. Everyone pays according to their consumption. If people save their money and invest, they won’t be taxed. We need to consider a national sales tax as a legitimate avenue for revenue and growth. The income tax penalizes personal economic prosperity and has become a symbol of America’s problem with special interests, complexity, and needless traditions. We need to demand our leaders change the way taxes are paid.