Picture the year 2013. You're in your thirties, you've got your education, and you're trying to live the good life. There's just one little catch: You've got to support your parents. Social Security is bankrupt and Congress has two unpleasant options: Raise the social security tax, which hurts you; or lower Social Security benefits, which hurts your parents. Since the elderly vote more, the latter is political suicide, so guess what happens next?
"How can this be?", you ask. "Didn't Congress balance the budget way back in '97?" Sure they did - by dipping in the Social Security funds. Instead of investing the money taken from our paychecks to prevent this disgrace, it's being spent to "balance" the budget.
This wasn't a problem in the '90s (the good old days) because there were enough workers to pay the benefits for the elderly. Thanks to modern medicine, senior citizens have been the fastest-growing age group in America for some time. When Social Security was created, there were twelve people paying taxes for every person on Social Security. In the '90s, people retired earlier and lived longer so there were only three taxpayers per retiree. Today (in the cold, cruel world of 2013), every worker pays not only his own bills but half of a senior citizen's bills as well. Not a pretty picture.
Okay, nightmare over. There's a solution to this problem, and you'll like it: Abolish the IRS. That's right, no more income tax. No tax on your paychecks, or savings accounts or profits from your future businesses and investments. Instead, create a federal sales tax of 15 to 17 percent on everything that's already taxable.
For the working poor, life is good. No more money withheld from paychecks, and most of their purchases (food and medicine, for instance) are already tax-exempt. For the middle class, not much difference. Income rises, but taxes rise too; savings rise, but inflation lowers the value of the savings. The people hit hardest are the ones who don't pay income taxes anyway: for example, criminals. Drug sales don't appear on income tax returns, but even drug dealers have to spend their income sooner or later - on pagers, cellular phones and cars with lots and lots of options. Picture 15 to 17 percent of every drug deal going to Uncle Sam, and you can see how this really benefits America.
Something else to consider: What do you think foreign investors will do if the United States stops taxing investments? Wouldn't it be nice to have more foreign investment in, and buying of, American products? Again, America benefits.
There will be some people who will object strenuously to this proposal. Wealthy people, lawyers and accountants who benefit from the status quo will not be as comfortable as before at first. Opponents, consider that investment makes you richer. Spending makes you poorer. Why should both be taxed, as they are now, when we can completely shift the focus of taxation to spending? The more America invests in its future, the brighter it will be.
This isn't a new idea. Congressman Archer (R-Houston) has been pushing similar proposals for years, but he retires in 2000, and this idea hasn't really been given a fair hearing. And it won't be - not until the voters want it so much that Congress will have no choice but to listen. Since the income tax was added to the Constitution by an amendment, another amendment will be required to appeal it. In the final analysis, the people rule in a democracy - even if only by silence.
Richard Auclair is a junior math major