National Sales Tax

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been opposed to the idea of a national sales tax from the first
time I heard of it – so long as it does not involve a dramatic
reduction in federal spending. Without a reduction in spending,
it is just rearranging the burden of big government (which is also
the case for any tax cut that doesn’t involve a reduction in spending).
And thus is a complete waste of our time and effort if we support

I’ve said that, once the poor have been made exempt and all the
politically strongest industries have exempted their products from
the tax, the rate will have to be at least 30% – and probably
even more than that. Because of this, it’s very unlikely that the
tax will ever even be enacted.

Now Bryan Russel has written to me to provide a number of other
reasons to shun the idea of a national sales tax. Here’s some of
what he said:

  • It would
    hurt the economy because it would be an incentive for people
    not to buy new products, but to buy used items instead (garage
    sales etc.) to avoid the huge tax.

  • Immediate criminal
    element in all retailing. Can you say "black markets"?!

  • Endless companies
    lobbying for their product to be tax exempt or at a reduced
    tax because it is environmentally friendly or is produced by
    a minority owned company, etc. In short, we would end up
    with a complicated sales tax code similar to the income
    tax mess.

  • We might
    end up having to carry "tax I.D. cards" because sooner
    or later the politicians would decide that poor people should
    pay at a lower rate and maybe rich people would pay at a higher

  • We would
    need to keep records of how much sales tax we pay – to
    make sure someone who is making $200,000.00 a year is not paying
    only $500 in sales tax and thus must be "cheating" by
    buying things in the new black market or whatever.

  • Government
    regulations would be overwhelming. The government would be prying
    into inventory books, as well as tracking all goods to make
    sure the tax is paid. TVs and other high dollar items might
    have to include microchips to track them to make sure the tax gets

The more you think about it the more problems you can imagine, and
the bottom line is that we will still have to pay too much,
special interests will still get exemptions, and government will
still be collecting the bulk of our earnings to make war and force
expensive political schemes on us.

Amen, Brother Bryan.

9, 2005

Harry Browne [send
him mail
], the author of Why
Government Doesn’t Work

and many other books, was the Libertarian presidential candidate
in 1996 and 2000. See his website.

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