Proposed House Bill: Subchapter A Section 1, item`(a) IN GENERAL- There is hereby imposed a tax of 15 percent on the gross payments for the use, consumption or enjoyment in the United States of any taxable property or service, whether produced or rendered within or without the United States.-- National Retail Sales Tax Act of 1997 (Introduced in House)
"If duties are too high, they lessen the consumption; the collection is eluded; and the product to the treasury is not so great as when they are confined within proper and moderate bounds." --Alexander Hamilton
When you tax something, you get less of it. Put a tax on cigarettes, liquor, gasoline, etc., and consumption naturally falls (or people go across state lines to get it at the right price).
If we agree to a national sales tax, where a car costs $25,000 instead of $20,000; or a TV that yesterday cost $449 now costs $565; the economy will come to a screeching halt. Sure, people have to buy food. They have to buy dish soap. But do they need the big ticket items? Can they put off remodelling the bathroom? Is this trip to The Gap really necessary? When those questions are finally answered, you will see that people will find out they can do without a lot of stuff.
Half the people in the U.S. don't pay tax today, and that's the way they like it. Now we're going to ask them to start paying 15-17-23% in sales tax? Ha. Talk about a plan that's DOA. But let's say the politicos do manage put such a plan into play. The people buying things now will stop buying things for at least a year. Can our economy survive that? I doubt it.
3 comments:
Coupla questions: Why are you bringing up a bill introduced in 1997 that didn't go anywhere? Is there a resurgent interest in this issue of which I am unaware? Also, isn't it the case that proponents of NRSTs also propose the simultaneous elimination of income taxes? And if so, what's NOT for a libertarian to like?
Coupla observations, too: Opponents of sales taxes point out how regressive they inevitably are: poor people spend proportionately more of their income than rich people, therefore they're being taxed at a higher rate than the rich. Also, it's not true that some people don't pay taxes. Everyone who buys a quart of milk, sells a Buick, punches a timeclock, or pays a phone bill is paying taxes. They may not all be paying INCOME taxes, but believe me, they are paying plenty o' taxes.
The NRST is getting airplay now because of tax day tomorrow. I guess that makes it a "current event". The bill continues to evolve. Not all proponents care about abolishing the 16th amendment and the IRS, but most of us understand why that would be a requirement.
Libertarians are a bit analytical about it. Cato Institute's Policy Analysis 289 (http://www.cato.org/pubs/pas/pa-289.html) describes the sales tax as tending towards regressive, especially in the short term. Interestingly, the analysis points out that it also substantially shifts the tax burden from the elderly to the young, as the young tend to be in higher consumption mode.
The libertarian in me says we should first reduce the size of the government about 80% before deciding how to pay for it.
When you subsidize something, you get more of it. When you tax something, you get less of it.
This will never happen as a replacement for the current income tax system. I can't see congress giving themselves less power. The power to write tax laws that favor one group and punish another is HUGE.
However, I think it WILL happen at a very low initial rate as a suplimental tax - probably for a special cause like presciption drugs or other high-ticket federal program.
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