Rad Geek People's Daily

The Letters in this month’s Liberty lead off with Gerald P. Trygstad responding to an article by Gary Jason. Jason defended a flat income tax instead of the current progressive income tax. Trygstad responded by suggesting a so-called Fair Tax, i.e., eliminating income taxes entirely and replacing them with a flat federal sales tax. (It’s usually estimated to be somewhere around 20–30%, but Trygstad doesn’t get into the details.) Here’s one of the arguments that Trygstad uses to defend his proposal (emphasis mine):

A national sales tax on corporate products could tax all income (including a huge amount of underground income) at the point of sale and do so in an impersonal and equitable manner.

Jason replied that Trygstad’s suggestion was appealing, but that caution was needed because the economic effects of flat (or flatter) income taxes were better known than the economic effects of imposing high sales taxes in place of income taxes. Along the way he has this to say (emphasis mine):

His suggestion that the best solution is to move to a fair tax, i.e., to replace the current income tax with some kind of national sales tax, is something I am sympathetic to, for the very reason he points to: we need to be increasing, not decreasing, the number of taxpayers.

It’s sometimes said that one man’s reductio is another man’s reason. Maybe so. But one might be a bit surprised to see this exchange went on in the pages of a professedly libertarian publication. The fact that a tax scheme would increase the government’s ability to pry money out of off-the-books income streams, and the fact that it would result in having more taxpayers rather than fewer, seems obviously to be a reason against adopting that scheme, not for it.

Just in case you’ve forgotten, when the federal government has money in its hands it uses that money for programs that are, on the whole, wasteful, stupid, and often insidious or actively destructive. Government revenue pays for pork-barrel projects, inane subsidies, sclerotic bureaucracies, meddlesome regulation, finding harmless drug users and locking them in cages, finding harmless immigrants and exiling them from the country, domestic surveillance, extraordinary rendition, torture, and blood-soaked imperial wars and occupations. Expanding the government’s ability to get that money and diminishing people’s ability to hide their money from the government should not be a libertarian policy goal. And neither should making sure that everybody gets robbed at about the same rate–you know, just to be fair.