Before I begin, some recommended reading about legalized gambling from Emo Phillips.
A large part of Mike Huckabee's platform is his plan to replace the income tax with a 23% sales tax. I've been intrigued by this idea ever since I heard Alan Keyes propose them back in 2000.
I like that it moves the tax punishment from earning money to spending money. This does more to promote moral living. A person, to some degree, would be able to choose whether to be taxed a lot or a little. Buy less stuff, pay less in taxes.
The hope is that the uber-wealthy, billionaire types would not be able to dodge their share. As it is, there are so many shelters and loopholes that they avoid tax on millions of dollars of income each year.
If that would work, it would be great. But I have my doubts. Wealthy people don't get wealthy by giving their money away. They get wealthy because they are exceptionally good at getting and keeping money. They will find ways to avoid paying tens of millions of dollars in sales tax. They could come up with complicated swapping methods. They could find ways to smuggle goods from across borders. They could turn to the black market. They can use their money to get law makers to create new loop holes. They're shrewd, they're powerful, and they don't want to pay taxes.
Even if you could somehow get our bought-and-paid-for house and Senate to pass this law, I doubt it would be so airtight that these guys would throw up their hands and forfeit their share.
A larger concern I have is how this tax would effect the nation's poor. How would those who do not make enough to get taxed handle a price jump of 23%?
I think of some elderly people I know who do not make enough in retirement to even have to file with the IRS, who now would have to make their few dollars stretch even further.
I still think the idea is intriguing, but I would like to hear how these concerns would be addressed.
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I also find this idea intriguing, but see many problems.
The biggest problem comes with the sales tax on food. As you pointed out, the poor are already poor, and adding increased cost to necessities (like food and clothing) make it even worse. I don't know the plan in detail, but does the sales tax include food? I see many purchases for which this tax that it would be appropriate such as luxury type items (cars, boats, technology).
In regard to loopholes, here is a real life example. Here in Tennessee, there is no state tax, but the sales tax is pretty high. Many just go over to the Wal-Mart in Virginia to buy food at a much lower tax rate. Thus, they don't pay state income tax and they avoid the sales tax by shopping in a different state.
All in all, I would like to see it completely presented, but like you see no chance of the rich and privileged laying down and giving up their wealth without a fight.
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