While listening to NPR news this morning on my morning commute (why? I can’t stand commercials… my time is precious!), I heard a local legislator speaking his mind in terms of his non-support of the newest Georgia tax initiative from the Republicans that would lower income taxes and increase taxes on goods and services. His claim is the only help this measure would bring is for the wealthiest Georgians and Wall Street in terms of investment opportunities.
Yes, that’s right, sir. And your point is…?
Now I am by no means a pure capitalist, nor do I support the laissez faire mentality of no-holds barred business practices. However: there is no doubt the “wealthiest Georgians” are either a) the owners of businesses or b) the holders of investment capital. If we allow them more opportunities to invest either in their own businesses or in others, the ultimate recipients of investment cash get to open their umbrellas a bit wider which will create jobs and increase the tax base.
Sounds good, right?
Also, taxes on goods and services will bring us closer to a consumption based tax rather than a production based tax. Nothing could be fairer. Here’s my common sense example. Set the sales tax rate at 15%, 10% for the federal government and 5% for the state. If I am a doctor who wants a new $50,000 car, I’ll pay $7,500 in taxes. If I am a working class guy buying a $20,000 pickup truck, I’ll pay $3,000 in taxes. The uber-wealthy billionaire who buys a new $10 million luxury yacht pays $1.5 million in taxes. Guess what? We all paid our fair share based on our lifestyle. Isn’t that the fairest way to do business? Eliminate taxes from my paycheck and shift them to what I buy. That way even those who have those evil secret income sources that conspiracy theorists whisper about will pay into the system.
I get about $500 a month taken out of my paycheck in taxes both state and federal; $6,000 a year. Put that $500 back in my paycheck and I will be able to better pay debt, save, invest, or wow… spend and stimulate the economy. If you’re taxing me on what I spend rather than what I earn, I have more spending money available for the government to take.
Also, I will be better able to manage my money knowing that if I purchase a $1000 item, I will pay $150 in taxes right off the top using my 15% example. Make it 20%, 10 and 10… If I have $3000 in monthly expenses, I’m sending the government $600, $100 more than I pay now or just $50 less than I pay now under the 15% concept. But with more money to spend, there are more opportunities to collect revenue.
Expenses per month now would for most households increase if there is more in the kitty to spend. Add to my $450 a few dinners out, some clothes shopping, or the routine of buying birthday or holiday gifts, and the tax potential increases. $3000 in expenses plus $500 for incidentals makes for $525 in tax revenue. Looks like Uncle Sam gets a bit more.
We need to wake up and smell the coffee. Our current system of taxation doesn’t work. It’s cumbersome, confusing, and designed with shelters and loopholes in mind, the same loopholes that wealthy conservatives and liberals alike exploit to their advantage. When the Hollywood elite starts filing a 1040EZ form, then maybe I’ll agree with their “rich people should pay more taxes” mantra. When conservatives are honest with us and admit that hiding wealth is a government sanctioned shell game, I’ll be more inclined to listen to them that the disparity between the rich and the poor is unbalanced against those at the top.
Me? I’m in the middle. I’m not rich, but I’m not poor either. I work hard for what I have and would love a little more spending cash to help make ends meet. I shouldn’t have to rob Peter to pay Paul. Besides, Peter asked me for a loan the other day…
Chip Grefski
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