Lots of foolish people rail against the idea of a national retail sales tax. But why? We already have a national sales tax. It is called the corporate income tax. The reason the corporate income tax is the same as a national sales tax is that everything you buy has the fallout of this tax lumped into it. The only difference is that the amount of this current “sales tax” which you pay with every purchase is hidden and shows up nowhere on your bill when you go to the grocery store or shop for clothes or buy yourself a new refrigerator.
In fact, if the truth be told, the corporate income tax is the worse of the two options. It is worse because that income tax is tacked on to every item in the chain of producing any other item making that national corporate income tax a cumulative tax. With a true national retail sales tax you pay tax only on the final purchase of a good or service.
What? Did you think corporations actually paid that tax government levied on them! Ha! You fell victim to one of the classic blunders - The most famous of which is "never get involved in a land war in Asia" – but only slightly less well-known is this: all taxes levied upon businesses trickle down to the end consumer. It is he, i.e. you and me, who foots the bill. That tax trickles down just like every other cost involved in producing something does. It is basic Economics 101.
Now, wouldn’t it be much nicer if you were no longer lied to? Wouldn’t it be nicer if instead of having no idea how much government imposed “cost” you are paying on that new car, which you are signing the loan on, if there was actually a line item on your receipt that read, “National Retail Sales Tax X%?”
There are several reasons why people are against a true national retail sales tax.
The politicians are against it because they do not want the poor and the middle class to know that they pay upwards of 30% “tax” on everything they buy. Could you imaging the uproar! Could you imagine the hoards of lower income folks flooding the offices of their local US Representatives when they discover, after thinking for years that they were not paying taxes, that the government is reducing their purchasing power by 30% and not being upfront about it? I would love to see how well the politicians can duck, spin and jive out of the way of the pitchforks and torches.
Politicians also do not like the idea of a national retail sales tax because they love having special interests and their lobbyists grovel before them for special favors to be granted to them through the writing of tax laws. Where's the fun in not having that sort of control after all?
Liberals in general are against the idea of a flat national retail sales tax because it does not let them target the “rich” (a moving target) directly with higher marginal tax rates. Even though the “rich” consume more and would pay by default more dollars in taxes, liberals that have made a living off of pimping class warfare and would lose a valuable tool in the way of the progressive income tax.
Some business owners in states where there is not currently a state sales tax claim that it would be a burden on them to have to collect a new tax. Really? It would be a bigger inconvenience than spending the hours upon hours they do now filling out their corporate tax returns and worrying every year about an audit? What intelligent business person wouldn't want to have a single form to fill out where the math is no more complicated than $X sold times Y% national retail sales tax equals $Z owed?
People who have built their lives around wracking their brains every year over what deductions they can take and reduce their tax burden to the federal government kvetch about a national retail sales tax because under such a system they would lose many, if not all, of their precious deductions. You know, the same deductions that these people spend hours collecting receipts to prove in case of an audit while trying to decipher current archaic tax laws to figure out if they are even eligible for? Yeah, who would want to give up that sort of hassle!
The economic illiterate are against a national retail sales tax because, well, because it is different than what they are used to. They don't see the benefit of being able to keep every dollar in their paychecks and deciding themselves how to spend those dollars as they see fit. Instead they really would rather the government pilfer their paychecks every payday first and not let their keep their money?
In the past I have made my complaints about the Fair Tax known. I don't like the "prebate" idea first off. It is only a sop to those that have grown dependent on government and accustomed to getting their benefits check each month. But when you compare it to what we have now? There is no comparison.
It is time to stop hiding the taxes we are paying and just be upfront about it. It's time to get simpler and better. There can be only good things for the people of this nation if we do. Conversely only bad things can befall those who have scammed the system and used it to fulfill their desire for power.
First we must repeal the federal income tax. Then we must install a national retail sales tax like the Fair Tax. Plain. Simple.
Copyright ©2011 J.J. Jackson