A Rasmussen poll says 66% believe we’re overtaxed. Hmm: 47 percent don’t pay federal income tax. So 19% feel overtaxed? This either means they think they’re getting totally jobbed when it comes to taxes on cigarettes or lottery lump-sum payouts, or they have a great fellow-feeling for the taxpayers who do shovel the shekels to Uncle Sugar, and believe those guys need a breather. If nothing else, it suggests there’s a general mood afoot that believes the government hoovers up too much, and not because it has so many obligations. It raises taxes for the same reason they say a dog, er, does that thing it does: because it can.
But at least a dog comes when it’s called. Add high taxes and feeling that government just might put its own needs ahead of yours, and you have discontent. Add the sense of overtaxation with the realization that we still have to go cap-in-hand to China to borrow the occasional trillion, you get something: an entirely new opportunity for the Republicans to squander.
Lucky for them, the Democrats are acting as if they want to get their application for asylum to the EU notarized and stamped before the November elections, so they’re talking about the VAT. (If you wonder why they support gun control, it’s partly due to their own ability to shoot themselves in the foot.) The VAT is a perfect tax: it taxes everything several times and it’s largely hidden. Prices go up, up, up, but unless there’s a law that specifies the exact amount of VAT-fat injected into the product’s subcutaneous tissue, no one notices.
No doubt some Republicans would push for such a law as a sop for passing the VAT, and content themselves that they’d done their part. These are the same guys who would vote for a bill that taxed soda, but attach a rider that declared Coke “part of our national heritage.” We got something, they got something. But canny Republicans will yell from the rooftops about the VAT, and force Democrats in squeaker elections to repudiate it — and hence admit there just maybe might be a limit to the number of millstones you can pile on the economy’s chest — or give it bland endorsements that make them sound like they really believe we can bring back jobs by making everything more expensive. No Democrat can say the VAT’s required to pay for ObamaCare, since we’ve been told it will lower costs to the point where MRIs will be so cheap they replace tanning-bed clubs in suburban strip malls.
We won’t see a VAT soon, but progressives have patience. Ideally, they would like America to be as much like Europe as possible before continental drift brings the continents together, but if there are still some details to clear up as the land masses come within hailing distance, fine. But it’s important to have alternatives to propose — so what can the GOP push?
The Standard Operating Revenue Overall Seizure, or SOROS tax. This would take every penny George Soros has in exchange for Sen. Max Baucus’ 125,000 acre ranch. Advantages: deeply satisfying. Disadvantages: only works once.
The flat tax. Everyone pays the same amount. Advantages: everyone knows what they owe. Disadvantages: ridiculously unfair, unless you take gazillionares like Bill Gates and declare him to be, in legal terms, 350,000 people. At least that would boost sales of the Zune.
The flat-rate tax. That’s more like it: everyone pays the same percentage, with the poor getting a break. Right now we have different brackets — hand, arm, leg, torso; this would mean everyone would have to pay a finger, or ten percent. Some people have bigger finger than others, so they’d pay more. Advantages: simple. Disadvantages: confused people mailing severed fingers every April 15th. Defenders of the ever-hungry Jabba the Fed would note that the upper classes still have enough for diamond-tipped stick pins and ostrich-egg omelettes, but let them shriek.
Would they raise enough money? I don’t know. But the point isn’t to design a tax system capable of supporting the government, but to devise the simplest, fairest tax code devoid of niggling manipulations, and tailor the government to fit the revenues. Heresy! Which is why you fear reform is doomed. What was the last enormous government program anyone succeeded in whittling down to something tiny and benign?
Besides the military. But we still don’t know if they’ll be successful with that project.