Every year on April 15, members of the Libertarian party can be found protesting outside the Monroe County post office as people are mailing in their tax forms at the last minute. Their placards say things like “Work is a crime; pay your fine today.” I must say, I think they have a point.
I do understand why some sort of taxes are necessary, and I think we generally, if grudgingly, agree. Granted, most people would like it if other people or groups were the ones taxed and not them, and I suppose I’m no different from what I’m going to propose.
On the surface, an income tax makes sense. The more money you make, the more you can contribute to taxes. This also seems to be the rationale behind property taxes, as the amount paid is proportionate to the size of property owned. Since one of the primary uses of property tax is funding for public schools to provide educational opportunities to all children, I see this as a good thing.
But it does seem that an income tax is a penalty for trying to earn money, and leads to a disincentive to work hard. It is also used as an excuse for tax evasion. Being paid in cash “under the table,” not claiming cash tips, or other types of undocumented income are common methods. For these folks, I’d suggest bartering work or goods; that seems more honest. But I do understand where they are coming from and it is especially difficult when trying to rise out of poverty.
Therefore, I think instead of relying so heavily on the income tax, we should rather increase consumer taxes. One reason is that you have control over what you consume. It could be argued that you also could decide how much money to make but I don’t think that deciding to be poor just to avoid paying taxes is a good strategy. I think changing one’s buying habits has a better long-term prognosis.
I haven’t sat down to do the math, but I think we could reduce or eliminate income tax for those who earn under a certain level, based on household size and regional costs of living. In return, sales tax would be increased on many types of items. If you don’t want to pay so much in taxes then quit buying so much stuff. This would have a side benefit to helping reduce the materialism that is so rampant in our culture.
Any type of luxury item should be more heavily taxed. I realize my definition of what is a luxury is probably far broader than most; I’d define it as anything that’s not really necessary. Jewelry, home entertainment items, minor appliances, and all those gadgets and gizmos we think we need would fall into this category.
Lottery tickets and any winnings from gambling should be heavily taxed; additionally tobacco, alcohol, fast food, cookies/candies, prepackaged microwave meals, soft drinks—basically, if it’s unhealthy then it should be taxed more heavily. This may sound harsh but with the obesity epidemic drastic measures need to be taken to encourage Americans to give attention to their health.
The things that would be taxed at a lower rate would be raw materials that can be used to make something else. Fresh produce is currently this way; this could apply to all grocery items if it doesn’t already. If it is an ingredient used to make a meal then it would be taxed at a lower rate, if at all. (As an aside, with regard to grocery items, food stamps should be expanded to allow such things as toilet paper and soap, but should be restricted so as to not include cakes or other prepared items.)
Building materials would be taxed at a lower rate so as to encourage do-it-yourself home improvement projects. Fabric and patterns to be used to make your own clothes and household furnishings would have lower taxes. If it is already made furniture or clothing the rates are higher; if it is the materials to make them then it’s lower. It’s time we rediscovered the life survival skills our grandparents had of being able make things at home.
To keep your own money: Quit buying so much, learn how to do things yourself, and don’t let yourself fall into “intaxication”—the euphoria you feel when getting a refund from the government, until you realize it was your money to start with.