How much do you pay in taxes every year? Most people would not be able to answer that question. In fact, I would hazard to guess that many people would think that "paying taxes" means that they owe money to the IRS on April 15th; and that if they get a refund from the IRS, they have beaten the government and come out ahead. In both cases, one is completely ignoring the twenty to forty percent of their income that has already gone to the federal and state governments.
If you want a quick and easy tax revolt (and maybe a general uprising as well), then stop the withholding of taxes. If people have to pay federal and state taxes at the levels they are currently at, every month or every quarter, they will be more than slightly perturbed, they'll be downright mad. The mere act of writing a check will incite and foment the populace. Withholding is one of the most insidious, but clever concepts the government has ever come up with. Let's see, we'll devise a plan where people pay us money that they never really knew they had. It will never touch their hands, their wallets, nor their bank accounts. It will just go directly from the employer to the government, do not pass go, do not collect $200. What a great scam. Adam Smith talked about the "invisible hand", but I don't think that he envisioned one picking your pocket. There needs to be some way for the populace to find out exactly how much they are paying in taxes and to be able to make choices as to the amounts they want to pay. Some people fear that if we eliminated withholding and left it up to the citizenry to send in their tax money each month, the government coffers would come up short. That may be true, but would underscore the point that we are overtaxed.
One way for citizens to see exactly how much they are paying in taxes and to be able to have a decision on the amount of taxes that they pay, is to institute a national sales tax. A national sales tax (NST), of say 20%, would raise the requisite amount of money needed to run the federal government. It would inform the citizenry of how much money they are paying in taxes with every transaction. It would also let the citizenry decide how much money they want to pay in taxes, through their spending decisions. The populace would become much, much more sensitive to an increase in the tax rate, as that would mean the cost of goods and services would rise.
Two things would have to happen coincident with the enactment of a national sales tax. The first is the repeal of the Sixteenth Amendment; which brought the income tax into being. We don't need both an income and a sales tax. The second is that the law (or amendment) enacting the NST would have to include a provision explicitly prohibiting (outlawing) a value added tax (VAT). The VAT is specifically designed to hide how much the populace is actually paying in taxes by taxing each step of a product's existence, so that by the time a product is on the shelves, nobody knows how much of the price comes from taxes. The VAT is very popular with politicians in Europe and it's no wonder. The VAT is so dangerous, that the mere mention of it by a politician should result in an immediate death sentence (although I seriously doubt that would pass constitutional muster).
Once the NST was in effect, it would no longer be any business of the federal government to know how much money you make, or how you made it. That would be your own business, as it should be. People would no longer be concerned with hiding their income, or trying to artificially lower their income, by crazy investment schemes or going into debt. Investment decisions would be based on real risk and return, and not the tax implications. A national sales tax would give the investment and real estate markets a little jolt of reality.
One of the stronger arguments against the NST is that it would detrimentally affect poor people, who spend a much greater portion of their income (up to 100%). There are several ways to remedy this; among them, exempting food from the NST, or allowing people under a certain income to file for a rebate or exemption card. In only those cases where someone is filing for an exemption, would the government need to know, or be allowed to find out, how much an individual is making
Another, but less effective, argument against the NST is that it would raise prices and thereby cause an economic slowdown. While prices would increase, the projected economic slowdown is not necessarily a valid assumption. In fact, the opposite would probably happen. Imagine if overnight everyone in the country received a 20% to 40% raise in pay (no more withholding!). There would be an explosion in spending that this economy hasn't seen in years.
"Law, being a sign of Corruption in Man; many laws are signs of Corruption of a State."
JSC
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