Outgoing Taxes

Cut taxBobby Jindal, the Governor of Louisiana, has proposed eliminating the state’s income and corporate tax.  His plan is to join the other 9 states that fund their government primarily through a sales tax.  He is attracted to this method by the fact that these states have done better economically.  There are 5 other states considering lowering or eliminating their income and corporate taxes to attract business to their states.  It is no coincidence that these states are run by Republican Governors, while Democrat led states are raising taxes.   There is a more important reason to change the state’s main source of revenue to a broad sales tax.  This step will help the public hold government accountable.  The voting electorate has been removed from feeling the effects of inefficient government over time, and this change will reverse that trend.

When any government wastes money, the only way they can be held accountable is by the voters in the next election.  If the majority of the electorate are not affected by this inefficiency, due to the fact that they do not pay taxes, there is little accountability.  Another way that these voters could track the effectiveness of government would be an aggressive investigative media.  With the press bias towards bigger government, this critical eye is missing.  It has been reported that roughly 50% of the cost of the NYC government is funded by 1% of taxpayers.  This, and a lack of media scrutiny, has been a recipe for out of control government.

Most people have such busy lives that it is difficult to track the performance of their various levels of government.  Politicians and governments are notorious for adding all different taxes and fees in order to find new ways to fund their spending.  This shell game has made it difficult for even the most interested voter to understand the efficiency of their leaders.  How easy would it be to keep track of your state government by simply looking at the sales tax?  Maintaining the sales tax will allow spending growth to be matched to the state’s growth in commerce.  The Governor can simply run for reelection by saying I did not raise the tax.

Under the sales tax scenario, imagine if there were a teachers strike.  The way that the press usually reports this event is to typically side with the striking teachers.  Invariably, there are sympathetic reports resorting to pull on the public heartstrings about “the children” and how we cannot risk the future.  Now, a Governor who wants to hold the line on spending can have a simple message by saying that if he/she gives in, the sales tax will go up 1%.  Just think of the difference in the way people will look at this issue.

These moves by Mr. Jindal and other Republican Governors are great differentiators from the Democratic Governor tax raisers.  They are also a good way to bring attention to the economics of the state.  This change ensures a larger majority to be affected by the cost of government, and the consequences of each decision.  Republicans are always trying to make the case that people don’t want bigger government.  Making sales tax the main way that the government is funded not only makes it affect all the people, but gives citizens and easy way to measure their government.

Author Bio:

Michael has been an editor and contributor at the website www.freemarketsfreepeople.net for over 2 years. He has over 20+ years of diverse business experience, from running complex operations where he managed hundreds of people, to starting and running small businesses such as www.realinterestfund.com. He is blessed, or perhaps cursed, with a logical mind which he uses to analyze government, media, politics, and culture. He believes that his life experiences help him bring a unique perspective to the issues of the day.
  • Anna S.

    An informed electorate, an agressive investigative media, one could only dream of such things. But since my wildest dreams will not come true in the near future, I agree, a sales tax is the way to keep issue in the drowsy public’s eyes!

  • Wheels55

    I have always found sales tax to be the fairest tax. It’s a consumption tax. There are so many hidden taxes out there, it’s nice to see one that you can control by controlling your spending. Internet sales screw that up, somewhat.

  • John Illinois

    The nice thing about a sales tax is that it catches those in the underground economy, visitors, and those who are able to schedule their income such that they pay little or no tax. I recall when Michigan first started the sales tax, the merchant would tell you how much the bill was, Plus “this much for the governor”.

  • wally

    I agree that one a sales tax for the states is a good way to go. However, it would be even better to go to one tax for the federal governments revenue since the fed also enjoys those hidden taxes. Many informed citizens know that corporate taxes are passed on to the consumer. What is more difficult to see is that the corporate taxes result in making US products less competitive on the world market. My thoughts on corporate taxes would be to eliminate them completely and replace those taxes with a final federal sales tax at the time of sale. The individual tax could still apply and be based on progressive system as currently done with various eliminations of deductions. The federal sales tax would apply to all purchases US and foreign so the foreign suppliers would assist in the process of paying for products and services.

  • MOrning Glory

    Sounds like a plan to me! EVERYONE would be responsible for pitching in! Even those who leach off the government! HOOT HOOT! I’d give ANYTHING if MO would do this….but we don’t have a……….wait for it………….”REPUBLICAN” governor………….so we’re stuck in the ole “tax ‘em” rut~~sigh~

  • FloridaJim

    I would like Gov. Scott in Florida to try this. Scott has 23 Florida colleges offering 4 year degrees for a total of $10,000 that should make students and parent happy and disturb other expensive and cost ridden universities.Small government is the answer and Obama is the problem.