Why replacing the income tax with sales tax won’t work

One of the things proponents of a fair tax code (as opposed to the current labyrintine tax code filled with special exemptions and loopholes for favored groups and social policy manipulations) suggest is that an alternative means for extracting citizens’ wealth is a sales tax. Now, on a national level, I think this could possibly work in the realm of pure theory – a single sales tax on everything but food and medication.

(What counts as “food” is going to be a bear, since the government loooooooves to manipulate what “counts” and what “doesn’t count” and what gets extra taxes laid on it as an attempt at manipulating people’s behavior… well, somebody needs to tell the government that “If people eat it, then it’s food. Period.” Yes, that means no tax revenue raised on Fruit Rollups and candy, but it also means there is no opportunity for powerful corporations to use well-funded lobbying to get their preservative-laden shelf-stable twinkies on the “no tax” list while the downtown bakery that sells fresh cupcakes has to collect, file, and pay the sales tax.)

A nationwide sales tax is something that could even be levied on internet sales, because while yes, that does increase the amount of paperwork sellers have to do, it would be the same for everybody. (And it would have to BE the same for everyone. No exceptions, waivers, etc. Any time there are any new regulations, especially new regulations plus waivers granted, you can be sure that a megacorporation is behind it, paying off the politicians to ensure that any competition from smaller businesses gets cut off at the knees.)

The reason this isn’t going to work in the real world, is that states are already salivating over the prospect of collecting sales tax on internet sales… and the way they’re trying to implement it is guaranteed to hand companies like Amazon total market control from potential competition. Here’s an article, go read it. Now, if the federal government wanted, they could easily simply say, “internet sales are multi-state commerce, and the states may not enact sales taxes on internet sales, but we can” but, given the astonishing amount of corruption in government, there’s probably some companies that make sales-tax-prep software akin to TurboTax just begging the bureaucratic aides that do the real law-writing work (you didn’t think our elected representatives would ever stoop to such demeaning labor, did you?) to ensure that there’s plenty of opportunity for graft and lucrative jobs as Head of Internet Sales Tax Compliance Division available.

So yeah. “Burn the entire tax code and replace it with a truly just, transparent, and equitable system” is actually a pretty good idea, but in the real world, nothing “fair” is ever going to get through the federal government. They’re all far too attached to being able to extract juicy lobbying goodies from corporations, then taking jobs with those same corporations as compliance officers when they decide to ditch the government work for higher-paying corporate work.

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About pancakeloach

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