Furthest Right

A Sensible Tax Bill, If We Hack On It A Bit

Most conservatives do not recognize this, but Leftists are egalitarians — those who believe people are equal or should be made equal — and conservatives are not. We decline to participate in that illusion like many others.

The founding fathers (“framers”) of the Constitution followed the idea of the Declaration of Independence, namely that people are “created equal,” which means in the language of the time that birth is the only equality.

Language of this nature occurred in reaction to the situation in Europe, where social caste was still active but failing as the middle class bought their way into the aristocracy, and implied the American ideal that no one should be promoted merely by the status of his parents.

On the other hand, Jefferson and others shared the assumption of a “natural aristocracy,” namely a ruthless capitalist system where the best would rise, become prosperous, do notable things, and therefore ascend to power so that all might benefit from their greater competence.

In this view, people started out at the same level, and then nature sorted them as it always did, producing the equivalent of a European aristocracy through wealth. That order lasted until very recently when government took over the economy and ideology determined wealth for many people.

You still have occasional wildcards who managed to become billionaires through business, but very few of them did not do so by taking government subsidies or soliciting government contracts. At this point, obedience to ideology determines who succeeds and who fails.

Since the days when our income tax created the Great Depression, conservatives have aspired to a “starve the beast” strategy whereby through depriving government of income, they would be able to limit its ideological reach through social engineering and bring the country back to sanity.

Their latest attempt at this involves a now-mostly-dead venture in tax reform:

This bill imposes a national sales tax on the use or consumption in the United States of taxable property or services in lieu of the current income taxes, payroll taxes, and estate and gift taxes. The rate of the sales tax will be 23% in 2025, with adjustments to the rate in subsequent years. There are exemptions from the tax for used and intangible property; for property or services purchased for business, export, or investment purposes; and for state government functions.

Under the bill, family members who are lawful U.S. residents receive a monthly sales tax rebate (Family Consumption Allowance) based upon criteria related to family size and poverty guidelines.

The states have the responsibility for administering, collecting, and remitting the sales tax to the Treasury.

Tax revenues are to be allocated among (1) the general revenue, (2) the old-age and survivors insurance trust fund, (3) the disability insurance trust fund, (4) the hospital insurance trust fund, and (5) the federal supplementary medical insurance trust fund.

No funding is authorized for the operations of the Internal Revenue Service after FY2027.

Finally, the bill terminates the national sales tax if the Sixteenth Amendment to the Constitution (authorizing an income tax) is not repealed within seven years after the enactment of this bill.

We can instantly see the appeal: replace a large doddering federal agency with a simplified form of tax collection that, instead of being “progressive” and punishing the wealthy so that money can be redistributed, instead taxes consumption and therefore discourages waste.

This may be the greenest bill ever advanced in Washington. If a new car comes with one-third of its price in taxes, people will keep their old cars for a few decades, eliminating the huge environmental impact of manufacturing new ones.

In addition, this way, no one who votes does not pay; all feel the pain, therefore all have an interest in reducing the number of giveaway programs and vote-buying gambits so that we all pay less. After all, the more free stuff we vote for, the more the cost of products goes up.

That would make the economy more responsive and healthier because instead of a delay, where taxes go up and businesses and individuals demand higher salaries and prices over the next year as a result, with a sales tax prices would go up and be recognized as tax costs instead of hidden as simple price rises.

Very few voters now recognize that all costs are paid by the consumer. If taxes go up, they go up on the tree cutters, lumber mill, architect, construction workers, painters, and movers, so to get a shack built on your property gets more expensive in proportion to the rise in taxes.

If we dropped taxes entirely, prices would go down to half or lower of where they are now, since every level of the economy pays tax. The grower of lemons pays taxes, so do the people supplying water and fertilizer, as well as those picking, moving, and selling lemons, adding up to more than half the cost.

Instead of letting that money run free through the economy, it gets cycled through government, which exercises control through its ability to make winners and losers. If you do what government wants through its ESG or Green New Deal or DEI initiatives, you win bigly, and if not, sucks to be you.

Making the cost rise explicit by loading the tax onto products at the time of sale, which allows the economy to recalculate more quickly the impact of changing tax rates, also forces voters to confront an immediate, visual, and tangible reminder of what they just voted for.

Some of the other stuff tacked on here makes no sense. America does not want a UBI; even the limousine liberals realize that outright Communism is for poor people and failed nations. Trying to force a repeal of the sixteenth amendment this way seems silly as well.

Offloading entitlements into trust funds makes sense from a fiscal/pragmatic perspective but not a realistic one. In the long term, no one can afford the cradle-to-grave care that socialism espouses because it drains the productive to fund the unproductive.

However, seeing actual realistic attempts made to reform the tax and wealth redistribution mess gives one heart. It shows us more than anything else how changes in just a few laws could unravel the knotted mess that is our modern subsidy state and transform us into a more functional society.

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