Friday, June 24, 2011

Representation Without Taxation

"Taxation without representation" was one of the sticking points that drove the American colonies to revolt against the British Crown in 1776, but today we have the opposite problem. We have representation without taxation. Behind all the so-called budget talks in Washington lurks the dirty little secret that almost half of all Americans pay no income tax whatsoever. The number is 48% to be specific. For these low income people, the only way that they financially support the Federal government is if they drive a car (gasoline tax) or they smoke (tobacco tax) or they drink adult beverages (alcohol tax). That might be okay, but for the fact that all these folks get the full benefit of government assistance, including Social Security (if they qualify) and Medicare and food stamps, not to mention the protection of the U.S. Military against foreign threats. They vote and take the goodies that are available, but financially they have no skin in the game, so to speak.

So what's the answer to this? We absolutely need a national consumption tax, a sort of national sales tax on everything but groceries and prescription medicines. This would give every American a stake in fixing the budget problem, something that's lacking now. Most other developed nations have this tax in place, although for the life of me I don't see how they were able to put the tax into effect, given the politics that worked against it. Politically, the very mention of a national sales tax in America would be suicidal to the first political party that suggests it, and this probably will prevent it from ever coming up in discussion. But the smart people-- the REALLY smart people (most of whom don't hold elected office) -- who truly understand money and budgets and finance, all these experts quietly say that a national sales tax is the only way out of our monetary problem.

Don't look for this monetary solution to happen. The riots in the streets of Athens over the Greek government's austerity measures are a vision into the future of the United States if we ever tried to implement the national sales tax. We in America would prefer national bankruptcy instead.

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