I know, not everyone owns a house. Or has children. And how in the world would the government reward you for giving to charity if it didn't know?
What? The government has favorable tax treatment for home ownership, kids, charity, and a whole host of other things? It seems that the government is incentivizing certain behaviors, no?
Why is that? What difference does it make if I have a child? I didn't do it for the tax credit, and I didn't give to charity because I wanted a tax break!
Remove ALL of these exemptions, credits, and deductions. It is stupid. Everybody in this country should have access to all the benefits our tax dollars fund. Right?
Oh, wait, what about all those "home businesses" that the government is always talking about? Well, they either report the income now, or they don't. Liars are liars and they'll try to skirt the system whenever possible, regardless of tax "breaks."
I say, tax the corporations (more broadly, the businesses) that sell us junk. Be done with it. A flat 35% (or whatever) on all corporations doing business here. Buy a book, charge the seller 35%. Tax consumption (a behavior we should actively discourage, within reason), not income (a behavior we should ACTIVELY encourage).
Want to incentivize behavior? Let people keep the money they earn to buy and invest in the things they want! Perhaps books don't get taxed, but yachts do. See? This is how taxes originally were: A luxury tax.
Want people to quit smoking? 100% tax. Whatever. Lobbyists with the most money would still win the lowest costs, be it in terms of taxation, regulation, or supply costs, just like they do today.
Will prices rise? Perhaps. The 35% tax levied against the sale of a product or service will become a sales tax and will be passed along to the consumer, so prices will rise one-time by 35%. But the 7 percent or so payroll tax and the 25, 28, 31, or 35 percent marginal tax rates will disappear. You'll have more of your paycheck but depending on what you buy, you'll pay more for it.
But what about the homeless? What about them? Get a damn job!
What about the guy making minimum wage? Well, he pays no taxes now, maybe even gets money from the government. He'll only be taxed on the things he buys, so don't buy anything!
Food might be exempt. So, too, gasoline. Maybe other items, like rent would be tax-free (it already is, isn't it). Necessities could be exempt from taxes. That would encourage more companies to produce necessities, driving down the cost of necessities. Less companies would produce yachts, driving up their prices.
But what about the mortgage deduction (I had a $22,000 deduction for interest expense. Yikes!)? What about it? Phase it out. Or do it all at once (giving notice that in 3 years, for example, it will no longer be eligible for a deduction). What difference does it make? All our damn houses are worth less than we owe on them anyway. We're all going to be homeless in 2009 anyway!
Seems like a simple idea. Easy to implement. Easy to collect.
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