A National Sales Tax: The Time is Now

by Nader Ghali

"If you elect me, Senator Katherine Laforge, as your next president, my National Sales Tax will give you back true equity in the share of taxes you pay. You will no longer be the utilitarian taxpayer for the elite." "Hulagu's Web - chapter 10"

The heroine in "Hulagu's Web" is a true believer in Frank Chodorov's compelling view that income tax is the root of all evil. Why, under our current National Income Tax system, do billions in real income earned by criminal endeavors, the underground economy and illegal aliens go totally untaxed? Why are the complexities of our tax code so onerous that only the wealthy can afford the resources, knowledge and ability to truly access expert advice on how to legally minimize their taxes? The answer to these questions is that the everyday wage earner with his passiveness, unquestioned acceptance, and fear of the taxation process has become politically impotent. His naïve trust in the wisdom of his elective officials has made him the elite's utilitarian taxpayer.

It's time to move the proposal to implement a National Sales Tax out of the realm of political theatre and into reality. The idea bobs up and down during key election years but continues to meet stiff resistance inside the corridors of power. Clearly a vast lobby of Washington's politicians, lawyers and accountants with special interests seem intent on declaring such a proposal "dead on arrival" before giving it a fair hearing.

However, soon that may change. No less an authority than Federal Reserve Chairman Alan Greenspan has recently endorsed a National Sales Tax. While Mr. Greenspan has been known to easily roil financial markets by his cryptic oracles on the state of the economy, his stance on a National Sales Tax rings resoundingly clear. Speaking before the President's Advisory Panel on Federal Tax Reform, Mr. Greenspan said he believed that a consumption tax—such as a National Sales Tax—could spur economic growth. One of his most important arguments was that a consumption tax could lead to increased savings. The reason for this is obvious. If, instead of taxing income, the government taxes spending—then consumers will think twice about what they spend their money on.

Greenspan made it clear that completely eliminating the current income tax with a consumption tax would meet with tremendous opposition and involve a great deal of complex transitional issues. It's also clear that the loopholes in the current, convoluted tax system continue to benefit the elite and industries.The proposal for a National Sales Tax is part of the President's push for a complete overhaul of the tax system, a pledge he made in his re-election campaign. It's clear that no idea is off the table, and this one certainly has a long pedigree. Mr. Greenspan noted that the National Sales Tax was considered back in 1986, but reformers instead chose the more politically cautious approach of working to "overhaul" the current system instead.

So much for "overhauling"—the current tax code is substantially more complicated and confusing now than it was then. The National Retail Sales Tax Alliance, which supports the complete abolition of our current income tax system, gives some key figures that illustrate how complex the system has become. They point out that in the year 2000, the 1040 form alone was 70 lines long, with 117 pages of instructions. Americans spend nearly two hundred billion dollars a year in filing their taxes. The current push for an "overhaul" should do more than simply tiptoe around the elephant in the living room. It should strike a dagger into the heart of this burdensome behemoth once and for all. The current tax system has made liars out of many otherwise decent, hard-working Americans, while providing endless shelters and loopholes for the elite and wealthy.

A National Sales Tax is a more equitable proposal, and would bring in greater revenue streams. Everyone who buys goods or services would pay taxes. Unlike the current system where illegal aliens can dodge their taxes by carrying on business under the table, nobody would be exempt from a National Sales Tax. This includes everyone from the honest workers to hardened criminals or drug traffickers. With the acceptance of a National Sales Tax, endless man-hours and millions of dollars otherwise spent in "audits" would be saved. The chance of property confiscation for improperly paying taxes or going to prison for tax fraud would be alleviated or at least greatly reduced. A National Sales Tax will bring many denizens back into our society as productive members and true citizens of our country.

Our politicians and leaders should not underestimate the great groundswell of support that exists for eliminating the current income tax and replacing it with a National Sales Tax. Nothing taps this nation's populist impulses like opposition to the tyranny of taxation. Whether it's the Boston Tea Party, or grassroots organizations like the National Retail Sales Tax Alliance, Americans have always rallied against an unjustly oppressive tax burden.

The idea of streamlining the current tax system, of course, has always been popular with many citizens. Americans should continue to vote and voice their opinions on the matter. It seems that all of our leaders are finally getting the message: the President, the Federal Reserve Chairman and elected officials.

In the political thriller, "Hulagu's Web: The Presidential Pursuit of Senator Katherine Laforge", the charismatic Senator Laforge openly embraces a National Sales Tax as part of her political platform. One of her supporters asks her an important question.

"How much will that add to everything we buy?"
"It probably will be around 14 to 17 percent," replies Senator Laforge. "At first glance that might sound high to you but remember, no federal tax will be taken out of your pay, so your check will be much higher."
"Well, if you win, it will be like a revolution here in America," she is later told.
Indeed, it would be like a revolution.

Critics point out that eliminating the current income tax system would require repealing the 16th Amendment. That is an obstacle but its repeal should not be that difficult. Amendments have been repealed before. For example, the 18th amendment was repealed by the 21st Amendment. The infamous 16th Amendment reads: "The congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several states, and without regard to any census or enumeration." Rep. Ron Paul, R-Texas, had already proposed such a repeal a few years ago.

In short, if the utilitarian taxpayers for the elite would just stand up and make their plight known to their representatives, the politicians would take note and likely accept the will of the people. Clearly, only a popular ground swell of the voting public can change this broken tax system. By putting government representatives on notice that their honeymoon with a National Income Tax is no longer acceptable, we can hopefully unburden ourselves with the intrusive, regressive and oppressive Income Tax system of today.

"If the elite and publicity seeking celebrities can muster thousands in favor of Income Tax, then you, the hard working unrepresented taxpayers must come out in droves to create the million man march for the repeal of the 16th amendment and freedom from the yoke of taxation slavery." "Hulagu's Web Chapter 10"

Let these words from Senator LaForge be the marching orders for every American committed to a fair system of taxation under a National Sales Tax. Frank Chodorov's book, "The Income Tax: Root of All Evil," can be downloaded for free off the Internet and should be required reading for all of us.

About the Author

Bio for Nader Ghali
A computer programmer working in the telecommunications industry for the past six years, Nader Ghali lives in Tulsa, Oklahoma and spends his free time writing on subjects ranging from computer security to economic and political issues.