Income tax, what a crackpot idea

BY RANDY ALCORN
Former Arkansas governor Mike Huckabee, who has come out of the political Ozarks to challenge the frontrunners for the Republican Party’s presidential nomination, has done so, in part, by supporting the abolition of the federal income tax and replacing it with a national sales tax. While Huckabee’s bold position on taxation has received enthusiastic support from many Americans, it has also provoked demeaning criticism from those who benefit from the current tax system. Some of those disturbed by the notion of unshackling Americans from the labyrinthine federal tax code and its Gestapo-like compliance measures have labeled the proposal for a national sales tax a “crackpot plan.”

They have inferred that because Huckabee supports it, he cannot be taken seriously as a candidate for the presidency.
Here we have the classic confrontation between the forces of rational change and the forces of smug complacency. Politicians love the tax code because it allows them to micro-manage the lives of citizens and influence the course of institutions. They have no interest in relinquishing the strings with which they can manipulate the many personal financial decisions of individuals and of institutions. Joining them, snuggled in the comfort of the status quo, are the IRS bureaucrats and the burgeoning tax service industry, which includes tax accountants, tax attorneys, tax preparers, estate planners, tax guide publishers, tax forms printers, and tax software vendors.
Each year, Americans spend billions of dollars and eons of time complying with arcane, confusing tax regulations, and then face the possibility of the intrusive, intimidating, inquisition of a tax audit if they misstep in filling out a form, or if they are just unlucky enough to get selected in the audit lottery.
Is all of this really necessary to fund government? No, but it is necessary to maintain the positions, power, and income of those who benefit from the current income tax system.
If a national sales tax is a crackpot idea, what, then, is the federal income tax system, the standard of sanity?
The federal tax code has become so cluttered with regulations designed to advantage or disadvantage various segments of society that it has grown to 20 volumes encompassing over 16,800 pages of mind-numbing nonsense. Its formulae and calculations, concocted by cloistered bean counters exploring the bowels of numeric esoterica, have created mathematical mazes in which thousands of frustrated taxpayers get lost every year.
No one can master the tax code, not even the Secretary of the Treasury or the Director of the IRS. But, you and I are expected to get it right when we file our annual tax confessionals.
Sales taxes are not a radical new idea, untried and untested. Sales taxes have been effectively employed in many states for decades. And, while a national sales tax would not be without issues, it would be a far simpler, and fairer system than the current income tax scheme that Americans naively inflicted upon themselves with the ratification in 1913 of the 16th Amendment.
There is more rationality in taxing consumption than in taxing activity that produces wealth and rewards productivity. Income taxes are confiscatory, intrusive, and detrimental to saving and investing. Conversely, the sales tax alternative promotes economic health by eliminating the tax on investment and savings income, and by restraining the impulse buying and compulsive consumption to which many Americans have succumbed.
One of the frequent objections to a national sales tax is that it is regressive, meaning that it taxes everyone impartially and at the same rate. Such fairness is objectionable to those concerned about the welfare of folks whose incomes are below the government’s arbitrarily determined “poverty line”. Even so, there are certainly more effective and straightforward methods of addressing this issue than subjecting the entire nation to the perennial rigors of the repressively “progressive” income tax scheme.
Huckabee, from the Razorback state, apparently knows how to cut a fat hog. He, along with many Americans, understands that the income tax system does not serve the majority of Americans. It serves the few, the privileged, and the powerful. It has no place in a nation founded on individual liberty, justice, and equality. The positive public reaction to Huckabee’s condemnation of the income tax is disquieting to the income tax industry and to those politicians vested in the current cumbersome tax system. Their mordant reaction to Huckabee, therefore, is not unexpected.
Charismatic leaders can unite free-floating public discontent into cohesive movements that challenge conventional wisdom and overturn entrenched institutions. That is what has the income tax industry worried. Although there have been, and are currently, other presidential candidates, like Ron Paul, who have taken unequivocal stands against the federal income tax, few have demonstrated the potential to actually get elected. Huckabee’s rapid rise as a viable presidential candidate is making the income tax establishment nervous.

Read Randy Alcorn’s Right on Target column every other Tuesday in the Daily Sound. E-mail your questions or comments to letters@santabarbarafree.com.