A national sales tax is one of many conservative alternatives to the current income and automatic payroll deduction tax system. A national sales tax would be collected in the same way state and local sales taxes are collected. No tax money would be deducted from paychecks as taxes would be collected at the point of sales of goods instead. Life necessities such as food and medical costs could be excluded, but most other items, luxury goods, and personal services would be taxed equally (though politicians often like to punish consumers with higher taxes
for behavior they dislike, like drinking soda
and getting a tan). Let’s take a look at some of the advantages of implementing a national sales tax and ending the current tax system.
Reduce Government, Increase Privacy
Today, tax filers must fill out detailed personal and financial forms and hand them over to the IRS every year. After the passage of Obamacare
, individuals and families must now also provide information about their healthcare coverage. The government requires records of a variety of information that many people would rather not hand out or feel the government has any business knowing. With the current tax system, the victor of elections often dole out tax breaks to allies, and a sales tax could end this cycle of crony capitalism
. At the same time, eliminating the income tax would also effectively eliminate the IRS saving over $120 billion dollars over 10 years.
Increase the Tax Base, Reduce Fraud and Cut Taxes Paid Per Person
One of the common features of the most conservative states
in America is that many of them managed to gain revenue from out-of-state or other creative sources. The United States enjoys millions upon millions of tourists every year. Why not let them help pay into the federal tax system and reduce the tax burden of American citizens? Likewise, millions of illegal immigrants, individuals who earn money “under the table” and do not report income, and people who engage in illegal activities and do not report income would not be able to evade paying their fair share in a way they currently do. And the current income tax system effectively runs on an honor system for a majority of filers, requiring individuals to be honest about the taxes they pay. There simply isn’t the manpower available to make sure taxpayers are honest and paying what they should. Even people in line to be treasure secretary – which oversees the IRS – “forget”
to pay taxes or only do so when scrutiny is soon to be applied.
Get Americans Out Of Debt! - If They are Responsible
By not taxing life essentials (such as food), a national sales tax does not unfairly harm lower income brackets. Only when non-essentials are purchased would the tax be applied. And while the federal government has no interest in reducing or eliminating their debt problems, millions of Americans could find themselves getting debt free with a tax switch. Since Americans would be taxed on what they spend rather than what they earn, they would be able to keep 100% of their paychecks. If they decide to get out of debt and to not purchase unnecessary items, they would have all of their income to spend wisely.
Ends the “Hidden Tax”
The reason politicians love payroll taxes is that the money is deducted from paychecks before people realize it ever existed. If taxpayers were forced to write checks to the IRS every two weeks, they would probably not be very happy and would fight to have taxes lowered. In the era of big government, that is not acceptable to the heavy spenders. Much of the objection to a sales tax is the reality that people actually see the tax and actually have to pay for it firsthand. If a sales tax started in the 20-25% range to make up for the income tax, how quickly would politicians be elected who promised to lower those taxes? The current income tax reduces outrage by taking out the money before anyone sees their check.
How Conservatives Would Implement a National Sales Tax
One of the chief worries conservatives would have in implementing a national sales tax is there is no guarantee that it wouldn’t simply just become another tax in addition to all other existing taxes. Of course, a national sales tax could currently be added at any time under current law. However, adding a new tax source without permanently removing the one it is intended to replace could be problematic. Conservatives would support the repeal or amending of the 16th Amendment which allows for an income tax to be collected at the federal level. The sales tax would not be implemented until the income tax has been abolished. One variation of the national sales tax – the FairTax
– would set the initial sales tax rate at a level that would match what is currently being taken in by the IRS.