Income taxes


One of the top five government abuses of power
A reader wrote to tell me that in my entry on progressive laws, I skipped over tax evasion. He's right, I did.

It also fits perfectly in with the results of progressive laws. If the top tier tax rate gets too high, those with the means will either hire people to find ways around the law or leave the tax jurisdiction entirely.

The really well-off won't leave, they will just find a way to make their assets leave. Tax shelters. Off-shore corporations. Nor are these methods likely to be outlawed soon because these are the same people who provide the big campaign contributions.

Progressive taxes don't hit the rich all that hard, and most of the poor are factored out. No, the real people who take the hit are those trying to become rich. When a dollar increase in income could double your tax liability, it's hard to justify.

The income tax as it exists now also turns your bank (and most of your other financial service providers) into unpaid spies for the government, with hefty penalties if they do not report your suspicious behavior.

Perhaps I am naive, but I really feel that the only "fair" tax is a sales tax that is clearly broken out from the price. First, it is mostly self-administrating, with the burden of proof on the seller. Second, you could see at a glance just how high the tax rate is (anybody know what the tax on a gallon of gasoline is in your area?) and just how greedy the government has gotten. Third, the government would no longer have a compelling interest to know what your income is and what your assets are.

Now, I know that a sales tax can be considered regressive because it impacts the poor more. But people in the US do not usually stay poor. With a little incentive, they will get richer, buy more stuff, which in turn means more tax dollars.

— NeoWayland

Posted: Thu - August 11, 2005 at 08:32 PM  Tag


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