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Editorial: Consider the benefits: national sales tax vs. income tax
Guest ColumnFebruary 20, 2013 | 1,572 views | 4 comments
Occasionally we hear commentators discuss on the TV that maybe our country would be better off with a national sales tax instead of the current income tax program. But almost immediately in the discussion it is noted that the sales tax would hurt the low income too much and therefore it can’t be considered.
Let’s compare the sales tax vs. our current plan for income taxes. And, let’s be clear, we don’t want both. If a national sales tax is ever begun, we must have a constitutional amendment that would repeal the 16th Amendment, the federal income tax amendment.
But let’s compare the difference that might be evident with the public if we change to a national sales tax. It is estimated that we would have to pay about 24 percent tax on every item that we purchase, and that would be an “eye awakening” event each time when the sales tax is added to our purchase.
But, let’s look at the words of President Ronald Reagan as he discussed the taxes on bread vs. sales tax ... here is his quote from 1975:
“If people need any more concrete explanation of this, start with the staff of life, a loaf of bread. The simplest thing; the poorest man must have it. Well, there are 151 taxes now in the price of a loaf of bread -- it accounts for more than half the cost of a loaf of bread. It begins with the first tax, on the farmer that raised the wheat. Any simpleton can understand that if that farmer cannot get enough money for his wheat, to pay the property tax on his farm, he can’t be a farmer. He loses his farm. And so it is with the fellow who pays a driver’s license and a gasoline tax to drive the truckload of wheat to the mill, the miller who has to pay everything from Social Security tax, business license, everything else. He has to make his living over and above those costs. So they all wind up in that loaf of bread. Now an egg isn’t far behind and nobody had to make that. There’s a hundred taxes in an egg by the time it gets to market and you know the chicken didn’t put them there!”
In Texas we do not pay a sales tax on a loaf of bread, but let’s look at the difference between a sales tax and the 151 taxes that are hidden in a loaf of bread.
Guessing at the percentage of the price of a loaf of bread as taxes, we would possibly arrive that we are paying 50 percent or more. So if we take the current price of $1.79 and remove the taxes paid that are hidden in our purchase, the price of a loaf of bread could be reduced to maybe 90 cents. It would take a little while for the price to be reduced in this manner, but because the United States is a capitalist system, the competition would reduce the price, and then if you add 24 percent tax back on to this new price, we would be paying $1.12 for that loaf of bread that we currently pay $1.79 with the income tax hidden in to the price. The poor that are always taken into consideration as the main reason that a sales tax is not considered, they would be saving money.
And, we would also have the Internal Revenue Service off our backs. Many of us probably make mistakes when we file our taxes; the current IRS laws are so complicated that it is hard to not make errors. That would reduce our worry about filing.
Also, if we were paying a national sales tax on every item that we purchase, we would become much more aware of the taxes being paid and maybe we would look to Congress to stop their spending.
Maybe the national sales tax is the way to fund our country.
Loyce McCarter is a resident of Wilson County and works actively for conservative causes.
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