Fewer lawyers and fewer accountants sounds like a pipe dream, but there is a simple piece of federal legislation that could make a significant impact on their numbers: The introduction of a flat federal sales tax.
Think about it. If the U.S. Government, and, indeed, all democratic governments, could take the enormous step of establishing a flat rate for the sale of everything, they could do away with income tax, and make the playing field level for everyone: For example, a ten per cent sales tax rate. No deductions, no exceptions, no exemptions and no credits. Everyone pays 10% on everything they buy. The more you buy, the more you pay.
It makes eminent fiscal sense, even without the intriguing idea of reducing the armies of lawyers and accountants we are forced to use every day. It might also put a significant dent in the number of economists.
If you buy a trailer home for $60,000, or a Mac-mansion for $20 million, you pay 10% tax on the purchase. If you buy a junker car for $600 or a Rolls Royce for $350,000 you pay 10% sales tax. Businesses and corporations buy huge amounts of materials and services – 10% on all that as well. No exceptions and no deductions.
The only entity that would not pay the tax would be the Federal Government, although that could be open for discussion as well. It might help curb wasteful expenditures.
A flat sales tax would not be easy to implement, and it would certainly not be easy to police effectively. It would require a large infrastructure, but, if collected at the point of sale, would be much more difficult to avoid. However, it would considerably reduce the multitude of tax authorities, tax lawyers, tax accountants, tax collection agencies, litigation lawyers, psychologists, mental health professionals and might even reduce the suicide rates.
The idea of a flat sales tax is certainly not new, but every time it is proposed, an avalanche of objections descends on the idea from all the vested interests in the current, very-cheatable, system. You’ve only got to look at the massive corporations, which seem to pay almost no tax at all, and the individuals who pay smaller and smaller amounts as they get richer and richer, because they can afford an army of lawyers and accountants to cheat for them…..apologies, who are able to find the legal loopholes which allow them to cheat legally.
We could make it even easier. Abolish all the different definitions of what constitutes “sales’ and tax everyone and everything at the same rate. Everybody, and every entity, buys things, so a “tax-at-source” has to be simpler, more effective, and easier to police and collect.
Many U.S. States already have sales tax in their legislative codes, but those codes are plagued with exemptions, credits, deductions, etc. that have been included by the same vested interests that object to a federal sales tax. Is it even possible to think that the Federal Government could collect all taxes, and distribute them to the States, on a per capita basis? How many more lawyers and accountants could we eliminate with that step?
Am I naïve in thinking this is possible, NO? Am I naïve in thinking it will happen, YES? However, the idea of far fewer lawyers, far fewer accountants, and far fewer economists has to be attractive to everyone, even to the lawyers, accountants and economists themselves.
The objections are so loud and comprehensive when the idea of a federal sales tax to replace income tax raises its “ugly’ head that there must be some logical reality in the idea. Loud and comprehensive objections are normally created by fear, which would indicate that the idea is good enough to attract substantial support. May the idea continue to surface and grow. The dream of far fewer lawyers and fewer accountants is far too enticing to dismiss.