Letters

From the November 1995 issue

(Page 3 of 3)

There are other objections to a consumption tax that were simply hinted at or not mentioned. First, imagine just how far down the ladder such a tax could go. Any transfer of goods might end up subject to a national sales tax; picture the feds requiring that homeowners throwing yard sales or people selling personal belongings collect and submit sales taxes.

Second, the national sales tax's proponents claim that the Internal Revenue Service can simply be done away with and that the government will no longer have any need to track incomes. What hogwash. The IRS or a successor will have to remain, if only to investigate and try to collect owed but unpaid income taxes of years pastunless the government intends to forgive all income tax evasion, which would be foolish and unfair. Besides, someone on a federal level will have to enforce collection of a national sales tax as a last resort in case states cannot or will not handle it; it may as well be the IRS.

And the federal government will still monitor your income, since not one of the tax reform proposals now under serious considerationand this also applies to the flat-rate income tax propos alswill change or eliminate the separate Social Security and Medicare withholding from wages.

The poor often already pay more in these taxes, which start at the first dollar earned, than in regular income tax, which does have a personal allowance, so they would still get hit. Repealing the 16th Amendment would seemingly make income-based withholding for these programs unconstitutional, so just how would they be handled? No one is saying.

Along with the mechanism for monitoring income to ensure that you pay Social Security and Medicare taxes, the mechanism for withholding from income will still be there and could easily be resurrected for a revived income tax. A lack of constitutional authority did not stop Congress from imposing an income tax during and after the Civil War, nor has it prevented widespread federal usurpations of Ninth and 10th Amendment rights today. And this, above all, shows what a scam "replacing" the federal income tax with a consumption tax would be. One day we would still end up with both and with an even more pervasive federal government monitoring every sort of transaction. Better the evil you know than the evil you don't: Let's pursue something like Rep. Dick Armey's flat-rate income tax plan, not a national sales tax.
Edwin Krampitz Jr.
Drewryville, VA

I was disheartened to see that the approach to tax reform taken by Messrs. Crane and Norquist in the roundtable on tax reform favored political tactics over economic efficiency. They seem to be so intently focused on their overriding goal of smaller government that they would impose a tax system both highly visible and painful to collect. They assume that painful taxes will necessarily lead the electorate to demand lower taxes and smaller government. This approach is risky. During the 1930s, economic pain led to more government and higher taxes. Economic hardship sometimes leads to even more harmful policy and neither Mr. Crane nor Mr. Norquist address this possibility.

The growth of the central government throughout this century cannot be explained by the existence of a painless tax system. If painful taxation were an effective means to affect a lower overall tax burden, the current system would have reduced tax revenues to rock bottom. And if the present tax system is too invisible, then why is sweeping tax reform such a popular issue?

The tax system has grown larger and more complex because the system is used by politicians to grant privileges. Taxpayers do prefer complicated high taxes to simple low taxes as long as the system includes a special feature they find particularly favorable. The U.S. tax code is not a mess because taxes are painless. Our current tax code is the natural consequence of political power that lacks the proper constitutional restraint.

If individuals are to enjoy the greatest degree of economic freedom and prosperity, then the tax system must be one that is guided by economic efficiency. To protect the tax system against the political pressures of special interests, it must be buttressed by explicit constitutional constraints on Congress. The principle of equality before the law should apply to taxation just as staunchly as it should to all legislation.
Mark McNary
Santa Barbara, CA

I enjoyed your roundtable on tax reform. For a long time, I have been in favor of a flat tax and considered a value-added tax a recipe for higher taxes.

My first reactions to a flat sales tax were negative. It seemed very regressive since lower -income people spend a far greater proportion of their earnings on necessities. Although I am sympa thetic to Daniel Pilla's position that a sales tax would eliminate the IRS, I somehow doubt whether that would in fact happen. I can't imagine a huge government bureaucracy just closing their books and going out and finding real jobs.

I suspect the IRS would wind up working with the states to aggressively enforce compliance by small businessmen and entrepreneurs. With a much smaller number of tax collectors as compared to tax payers, the IRS would be able to greatly increase its percentage of audited businesses and prob ably become a very intimidating factor in the lives of our most productive segments of society.

While all the arguments for the various tax proposals were good, it was the responses that were most enlightening. I was left with the view that no proposal is going to improve the situation much, if at all. Maybe we need to go back to our roots and remember that, as Sy Leon stated long ago, "The lesser of two evils is still evil."
William Edmunds
Park Forest, IL

Classical Gas

The absurdity of attempts to censor the lyrics of popular music is perhaps best illustrated by applying to the classics the language of the legislation proposed last March in New York state, and quoted in Mubarak S. Dahir's excellent article ( "Sticker Shock," July ).

Under the proposed standard, the state of New York would criminalize the sale to minors of a significant portion of the standard operatic repertoire, starting with nearly everything by Verdi. A few more examples: suicideTosca, Tristan und Isolde , Götterdämmerung, Madame Butterfly ; incestDie Walküre is contraband. Adultery? There goes Lady Macbeth of Mtsensk, Don Giovanni, Così Fan Tutte, Falstaff, and Der Rosenkavalier. Religious violence? Samson e Dalila , Parsifal, and maybe Tannhäuser . Morbid violence? Salome, Siegfried, Jenufa, Der Freischütz, and more.

Aside from the obvious violence they are doing to the First Amendment, those who purport to protect young people by attacking their music are, of course, treating the symptoms, not the disease. Like it or not, substantial market demand for these controversial works exists; perversely, as Mr. Dahir notes, restrictions may even enhance that demand. Advocates of this silliness would expend their energies far more productively elsewhere. Let us all encourage them to do so.
Frank C. Magill
Glen Carbon, IL

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