McCain and Obama may both be on the wrong page!
Everyone knows that sin taxes on alcohol and tobacco are intended to discourage their use. Exactly the same rationale should cause one to question our present income and social security taxes. Working and investing are both desirable. Yet our nation collects over ninety percent of its income from taxes on American labor and investment. Does this make sense?
Certainly workers and investors should both pay taxes, but should we tax them more when they do these desirable things more often and better? Republicans see this problem when they advocate cutting taxes on corporations and investment. Neither party seems to recognize what our present taxes do to American labor.
When a business hires a worker, it has to come up with enough money pay the worker and also for the worker to pay taxes on his wages. Every incentive exists to cut jobs, automate, use imports, and outsource labor.
Unfortunately there are other problems. We are now living in a highly automated and global economy. We are not getting adequate revenue from businesses that hire few workers, like software, CD’s, movies, rock concerts, sports events etc. Neither are we getting funds to support our infrastructure from imports and outsourced jobs. Business deductions are out of control. Creature comforts, like athletic skyboxes, gourmet meals, conventions in Las Vegas are all being paid for with untaxed dollars. Add to this 66,000 pages of IRS loopholes enabling the privileged to hire an army of CPA’s, tax lawyers, and financial planners to avoid taxes and you have a nation that may not long exist in a competitive global economy.
There is a bill in Congress, co-sponsored by over sixty representatives, that addresses many of these issues. It is called the Fair Tax. It is described as a progressive sales tax, because it does not tax essentials. There may be other ways to deal with these problems, but the Fair Tax deserves consideration. Ralph R. Layman Sr.