Tax Reform

Some people have begun converting their cars and trucks to run on reclaimed vegetable oil; that’s what Otto Diesel had in mind to begin with a hundred years ago. But as soon as success seems likely, the government is ready to place roadblocks in the path of anyone who wants to start a conversion business, and then to tax the reclaimed oil, and soon there’s no longer any advantage to anyone in pursuing it.

How many tax accountants and attorneys, looking for loopholes in 3,000-page statutes, would rather be working in some capacity on an urban monorail project along the lines of what Disneyworld has had for half a century? So many unproductive jobs are created, directly or not, by a government which could improve things for everyone if it simply got out of the way.

Some things are worth getting rid of, and the power to tax is the power to destroy. So if we want to discourage something, such as cigarette smoking, it makes a certain sense to tax cigarettes and apply the revenue to research and education on lung cancer, and try to make the culture less dysfunctional.

So if you want to discourage productivity, tax earned income.

But wait. Do we really want to discourage productivity? Let’s think outside the box instead and try alternative ways of generating government revenue, scrap the income tax, and let the tax wonks find productive work.

Let the government charge the parties who want court cases adjudicated and contracts and verdicts enforced, instead of taxpayers in general who never get inside a court except on jury duty.

Cut down on enforcement costs by creating a federal sales tax, payable at the cash register. Anyone who wants to avoid taxation can simply do without stuff.

A daily national lottery would generate tons of revenue, if it were worked right. California has lotteries that were supposed to generate revenue for education, but there’s a lack of transparency, and the revenue didn’t necessarily go where it was supposed to. Also, prizes of 100 million dollars are almost obscene; a thousand prizes of $100,000 each would increase everyone’s odds by a factor of 1,000 and provide a significant boost to a winner’s welfare without the problems attendant on a fabulous windfall (such as relatives appearing out of nowhere, right behind the tax collectors). A thousand days of a thousand non-repeating winners per day would give a boost to a million citizens, percolating up into the economy instead of trickling down.

Of course these ideas are only half-baked, but the basic ingredient, keeping Congress’ hands off our earnings, aligns with traditions going back to the founding of the country. It has to be better than Aid to Dependent Children, and that made it through both houses and into law.

If a temporary income tax cut works for 95% of the population, let’s build on it; over the next eight years, lessen government’s dependence on income taxes to exclude all of everyone’s earned income, permanently, by constitutional amendment. Then we’ll see this country take off!