A Viable Plan to Eliminate Income Taxes?

From George Will’s article “A National Sales Tax” at TownHall.com:

The power to tax involves, as Chief Justice John Marshall said, the power to destroy. So does the power of tax reform, which is one reason why Rep. John Linder, a Georgia Republican, has a 133-page bill to replace 55,000 pages of tax rules.

His bill would abolish the IRS and the many billions of tax forms it sends out and receives. He would erase the federal income tax system — personal and corporate income taxes, the regressive payroll tax and self-employment tax, capital gains, gift and estate taxes, the alternative minimum tax and the earned income tax credit — and replace all that with a 23 percent national sales tax on personal consumption.

The article continues:

Under his bill, he says, all goods, imported and domestic, would be treated equally at the checkout counter, and all taxpayers — including upward of 50 million foreign visitors annually — would pay “as much as they choose, when they choose, by how they choose to spend.” And his bill untaxes the poor by including an advanced monthly rebate, for every household, equal to the sales tax on consumption of essential goods and services, as calculated by the government, up to the annually adjusted poverty level.

Today the percentage of taxpayers who rely on professional tax preparers is at an all-time high. The 67 percent of tax filers who do not itemize may think they avoid compliance costs, which include nagging uncertainty about whether one has properly complied with a tax code about the meaning of which experts differ. But everyone pays the cost of the tax system’s vast drag on the economy.

Linder says Americans spend 7 billion hours a year filling out IRS forms and at least that much calculating the tax implications of business decisions. Economic growth suffers because corporate boards waste huge amounts of time on such calculations rather than making economically rational allocations of resources. Money saved on compliance costs would fund job creation.

You can read George Will’s full article at TownHall.com, and you can learn more about the Fair Tax plan at FairTax.org.

Walter Williams also wrote favorably about the national sales tax back in December, in his article “National Sales Tax.”