The Equal Tax (a head tax system) treats all citizens equally. It is the homeowners association model – everyone pays the same fee regardless of their income level. Those that believe in wealth redistribution won’t like it but then again thieves don’t like security systems. So, without further ado:
Arguments against the Equal Tax – Answered
1) How would you collect the tax? Government becomes just another service paid for monthly, like a cell phone bill. You could choose to pay it all at once or have it drafted monthly or weekly. Your employer no longer acts as the middleman for the IRS. Retailers no longer act as middleman for the local sales tax authority. You are responsible for yourself and you alone bear the consequences of not paying just as you would any other bill you do not pay. All restrictions on immigration would be repealed. Prospective immigrants would simply pass a criminal background check and then be issued an ID# for Equal Tax accounting (an increase in the population would naturally drive the tax down as the required budget is divided by a growing population).
2) What about those that sneak in and don’t pay the tax? Without immigration restrictions there is no incentive to sneak in. The incentive to sneak in was due to an artificially long time frame for entry. Remove the wait time and you remove the reason to “cut” in line. Immigrants will gladly sign up to get their ID# so they can reside here legally. To catch the few that would try to cheat the tax system we would employ the honor system found in many subway systems. In these systems there are no turnstiles, anyone can go through whether they have a ticket or not. This works because the fine for not having a ticket is extremely steep…virtually no one risks it (would you risk a $1,000 fine to avoid a $1 ticket?) High risk and low reward incentivizes compliance.
3) It’s not “fair” because the wealthy would pay little relative to their income! In no other arena of goods or service purchasing are we asked what our income is before we are given a price. The price of a gallon of milk doesn’t change depending on who is buying it. So why should the cost of government services change depending on who’s buying it? Paying based on income is subsidization. Subsidization is theft. Last time I checked, theft is considered unfair.
4) The per capita cost would be too high because the wealthy would no longer be subsidizing it! Exactly! It would force a reduction of our bloated government. If government were cut down to its core functions (defense, justice, contract enforcement) it would be affordable for everyone (considering that all income, property and sales taxes would be abolished). The tax would be driven downward as voters demanded ever more efficient government.
5) And what of the poor, this would surely harm them the most? Not at all. It would drive up their wages by an amount at least equivalent to the additional tax (and employers could easily afford that as they aren’t paying income and payroll taxes). Why would it drive up wages? Consider: if you are the sole wage earner for a family of four and make $15k/year and your tax bill just went up by $10k, you’d be a fool to work for anything less than $25k/year – NOBODY would work for less thus wages would necessarily go up (market based minimum wage). Likewise costs of goods would drop as the tremendous tax burden built into every good and service is eliminated. Everyone would be much better off in terms of purchasing power.
6) What about those that are disabled or on fixed incomes? Private charities would step in to assist people truly in need of tax help just as they assist them with their other needs today. Charity donations would explode because of the dramatically lower tax burden. Those on fixed incomes would no longer owe income, property or sales taxes and as described in Question 5 the purchasing power of their dollars would go up – so they would be much better off.
The idea of a progressive tax system has been ingrained into our psyche since birth so I can understand why the Equal Tax might seem bizarre. But if you consider the logic behind it, it is undeniably the best tax system. It is fair. It is fraud proof. It incentivizes smaller government. What more can you ask for?
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