The Statue Of Liberty Waved At Me
It’s that time of year again. On my way to work and all around town I see people dressed in Statue of Liberty costumes waving at motorists. It’s tax time and they are trying to get taxpayers to have their tax filings done at Liberty Tax service. After all the times I’ve passed ‘lady liberty’ I still don’t have a good explanation about how I feel about Liberty’s advertising model(s). Do I decide to do business with Liberty so that the poor soul on the street doesn’t stand out there waving in vain? Do I by-pass a business that would put someone through the humiliation of dressing as a 123 year old woman and waving frantically at every motorist that passes? Or should I just be happy that they have a job, even if it’s short term?
Actually I’ll do my taxes on my computer like I have the last 10 years. When I’m done I’ll back it up, burn it to a CD and put the backup in the safe. Then I’ll uninstall the program from my computer and delete the data file. Who’s to say that there might not be a data mining virus that looks for TurboTax or TaxCut data files and uploads them to Russia? It would be easy enough to do…
What really gets me about this time of year is the big cash grab of all the accountants, tax preparers and software vendors. Not to mention the terrible inefficiencies of the whole collection process. Some even make an interesting case as to the Constitutionality of taxation, but I ain’t opening that can of worms. But what are the alternatives?
Well there is the Flat Tax proposition. It’s very simple, basically everyone pays the same percentage, no mortgage deduction, no education deduction, maybe a child tax credit. That’s it. File you yearly statement on a form the size of a post card.
One of the biggest proponents of the Flat Tax is Steve Forbes, editor in chief of Forbes business magazine. During his 1996 and 2000 runs for Presidency he ran on a flat tax platform, boasting the savings of time, money and hassles, and for a time during the 1996 campaign it appeared that his message was gaining traction. I remember being torn between Forbes and Alan Keyes during the primary race that year. I ended up voting for Forbes in the 1996 primary in large part because of his flat tax stand. I voted for Keyes in the 2000 primary after seeing him on our local cable access channel speaking at a local party breakfast meeting. I still like him, but that’s another post for another day.
The other proposition that has been on the table for some time is a national sales tax, also called a consumption tax. I really like it. Basically what I means is that when you buy something whether a pack of gum or a yacht you pay a set percentage tax on it. Like the flat tax on payroll, the collection mechanism is already in place, no new government agency needs to be created, although I sure that they would.
The beauty of the consumption tax is that it ferrets out the untaxed dollars in the economy. My ex-wife worked for an payroll service that did employee leasing for a placement agency. Many of their workers were hispanic, most likely illegal. Virtually all of them had their with-holding at 9 or 10. Virtually no taxes were being taken out. Then when W-2′s were mailed out, virtually all of them came back as “Undeliverable”, bogus address, no forwarding address, etc. The company had to hold onto the returned W-2′s for seven years.
Another example is drug money. Drug traffickers and dealers don’t pay income taxes! But many live an extravagant lifestyle spending lots of money. A consumption tax would get them that way. Yes there will be some blackmarket and bartering, but that money will still make it’s way back into Uncle Sam’s pocket.
Think about it when you stroke that check to pay your taxes this year.
