REVOLUTIONARIES AND REACTIONARIES CONTINUED:

Ever Felt Like Killing the IRS? (Judy Dugan, August 17, 2004, LA Times)

The sales tax idea is simple, and that's its biggest intellectual selling point. Instead of taxing income, the federal government would institute a really high sales tax, which would be collected by retailers and other sellers.

Unlike a flat income tax, it would succeed in eliminating the IRS. Because people would have so much more disposable income, goes the theory, they wouldn't be deterred from consumption by the tax, which would probably have to be in the 30%-plus range to replace current federal revenue. That's according to economists who've tried to add and compare, a notoriously slippery task when talking about trillions.

But the debate has to start with some kind of percentage. Proponents like the idea of a tax of about 20%, which probably is not enough to support anywhere near the current level of federal spending, much less provide for a bit of deficit reduction. State and local sales taxes would be on top of the federal slice. Shrinking government is a secondary aim of most flat-taxers, so they do mean it when they talk about 20%.

The distressing thing is that while the GOP is offering revolutionary ideas like a flat tax or a consumption tax the Democrats are offering naught but to defend the universally loathed current system. Around here we'd generally prefer that conservative ideas prevail, but we also think it healthy if the Democrats have an idea...or two.

Posted by Orrin Judd at August 22, 2004 6:33 PM