Since so little is going on here, I thought this would be a good opportunity to float this idea again...especially since the WSJ is toying with it today. (See David Weidner's column)
A TRANSACTION TAX
Why not a single, easily administered, non-regressive tax?
It can be done, and undoubtedly will be done. The question, really, is when?
The Federal Government could replace its entire system of taxation with a levy on all transfers of value. The actual percentage rate would be quite small—one percent or less—because all transactions (other than the payment of the tax) would be subject to this tax.
There would be no income tax as such, nor any import taxes, or other federal taxes of any kind (and this could be the first step in the elimination of all taxes—state and local as well as federal).
The tax would be levied on stock trades and dividend distributions; wages; inheritances; retail and wholesale purchases; rents; interest; property purchases, etc. In other words, any time there is a transfer of value, the federal tax would be applied to the amount of the transfer.
Apportionment of federal revenues would then be made to the states and local governments on the basis of population, and inversely to the amount of local taxes levied. Those state and local governments with higher taxes would receive less federal revenue. State and local governments would gain the most by not levying any taxes and therefore not incurring collection costs.
Collection of the transaction tax would be a relatively simple matter, since it would work like the collection of existing excise, sales and value-added taxes. The only way individuals or corporations could legally avoid the tax would be by not spending, or in any way using, any wealth in their possession.
And there would be an additional advantage to the tax. The smaller the transaction, the less temptation there would be to avoid paying the tax, while the larger the transaction, the more difficult it would be to avoid paying it.
A TRANSACTION TAX
Why not a single, easily administered, non-regressive tax?
It can be done, and undoubtedly will be done. The question, really, is when?
The Federal Government could replace its entire system of taxation with a levy on all transfers of value. The actual percentage rate would be quite small—one percent or less—because all transactions (other than the payment of the tax) would be subject to this tax.
There would be no income tax as such, nor any import taxes, or other federal taxes of any kind (and this could be the first step in the elimination of all taxes—state and local as well as federal).
The tax would be levied on stock trades and dividend distributions; wages; inheritances; retail and wholesale purchases; rents; interest; property purchases, etc. In other words, any time there is a transfer of value, the federal tax would be applied to the amount of the transfer.
Apportionment of federal revenues would then be made to the states and local governments on the basis of population, and inversely to the amount of local taxes levied. Those state and local governments with higher taxes would receive less federal revenue. State and local governments would gain the most by not levying any taxes and therefore not incurring collection costs.
Collection of the transaction tax would be a relatively simple matter, since it would work like the collection of existing excise, sales and value-added taxes. The only way individuals or corporations could legally avoid the tax would be by not spending, or in any way using, any wealth in their possession.
And there would be an additional advantage to the tax. The smaller the transaction, the less temptation there would be to avoid paying the tax, while the larger the transaction, the more difficult it would be to avoid paying it.