National Sales Tax

by Harry Browne
by Harry Browne

I've 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 it.

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 rate.

• 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 paid.

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.

May 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.

Copyright © 2005 Harry Browne

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