Paying the bills

[kandrathe]

Maybe if we could find a way to tax the idle rich, we'd be set. Sadly, as you correctly point out, they have ways to escape taxation. Consumption taxes do not seem like a good solution. The rich will simply spend their money outside the country, the middle classes will take vacation junkets (I saw this in Uruguay, where high sales taxes led people to buy luxury goods in free trade areas in Paraguay), and the poorest will end up taking the brunt, as they buy the most, save the least, and have the least mobility, although well thought out exemptions could take the sting out of it. A smart tax system would have to be able to understand and compensate for all the various ways to hide money, and that is a tough job, for which consumption taxes, I think, are inadequate, and progressive income taxes are not especially bad.

I need a government who guards the borders, not a government who protects me from my own stupidity. We have enough "Thou shalt not run with scissors!" laws on the books already.

A smart tax system should be very, very simple. It should generate a consistent rate regardless of the economy. It should be negligible, but ubiquitous. Most places already capture a sales tax, so why not just implement a small Federal sales tax on goods, and a higher rate on goods costing more than say $20,000? You could provide tax exceptions for farm produce and medicine. To prevent the vacation junket problem, you just need to enforce the "Do you have anything to declare?" duty taxes that are already a part of the law. Maybe I said this already... But I think the Sarkosky position of making overtime untaxed is simply brilliant. It gives a big benefit to those who work the hardest and are hourly wage earners, not salaried. It encourages people to work hard, and then rewards them for their hard work.

The answer also lies in shrinking services to only those who truly need them, and providing those services at the local level, rather than at a State or Federal level. A person who earns $100K in New York, NY is not as well off as a person who earns $50K in Birmingham, AL. Yet, the person in New York is going to contribute a larger share in taxation. Equal is fair. If the person in Alabama and New York each paid the same flat rate, that would be fair and equal. The person in New York is going to contribute a larger portion of their income to paying for things like transportation, electricity, and heating. I would also have the government in a place of helping to insure that there are adequate 501c3 non-profit organizations in place to help the poor rather than the government stepping in itself.