Bayou Business Review, 4/6/98 p. 27
This week the adherents of the West's three major religions, Islam, Judaism and Christianity, are all observing very special Holy Days. Christians are, of course, observing Holy Week, beginning with Palm Sunday and culminating with Easter. Jews are celebrating the Feast of Passover. Moslems are celebrating Eed Eladha, the Sacrifice Feast. Unfortunately, in the U.S, these Holy Days are quickly followed by their antithesis. While Franklin Roosevelt proclaimed that December 7th would forever be a day of infamy, the most infamous day of the year for most Americans is quickly upon us, April 15th, Tax Day.
While Christians were certainly admonished to "give unto Caesar," it is incomprehensible that so much could really be Caesar's, Caesar's to throw away. Lately, we hear of transportation budgets that are loaded down with demonstration projects, along with the waste we already know is going on.
There is a lot of talk about reforming the federal tax code, making it simpler, making it flatter. The problem is that once an income tax code is simplified and flattened, it is just as easy for special interests to make their special pleas to legislators get their special exemptions or special rates. With an income tax system of any form, we still have the IRS, "The Tax Man," that The Beatles complained of, that most of us complain of. There was a reason that St. Matthew, a tax collector before becoming one of the 12 Disciples, like all other tax collectors of his day, was a social pariah.
Obviously though, there are things that we do through government spending, that could probably be done no other way, that are important to us, and we should pay for them. With income tax withholding, though, we never see the tax bite, except a little bit on April 15th. And then when we talk of having to pay, we talk of what we have to pay extra, over and above what we have already had taken out. Some people even talk of what the IRS is giving them. That's only what they overpaid. Withholding of income taxes creates a misperception in people's minds, a misperception of the cost of government.
If an income tax, under any scenario, has a withholding requirement (the government will not get much otherwise), it is a stealth tax. We seldom see it coming. And even after it has hit us and we have paid it, we often do not fully perceive how much we actually pay because we are not writing a check each month, it is money we never see.
If we do not appreciate how much all of these government projects are really costing us, we will not get outraged at government waste and at government doing things for folks they can easily do for themselves. If we had a daily reminder of what government spending really costs us, that "Caesar" takes more than he should, we would put Caesar on a budget as strict as our own.
Once more, we need to take Billy Tauzin's National Sales Tax seriously. With such a tax, we get that daily reminder of what Uncle Sam costs us. With our high sales tax we see what our Louisiana uncles, such as Nonc Eddy and Nonc Mike, have cost us.
While still susceptible to special interests, a sales tax is less susceptible to special interests raiding the cookie jar than an income tax for two reasons. First, we probably wouldn't stand for it, because we would see what it costs the rest of us in higher tax rates just because we more clearly perceive those costs. Second, consumer groups just are not efficient lobby groups.
It is time to think about putting Uncle Sam on our budget, a realistic budget. To do that we need to scale back the source of his spending. If we can better detect Uncle Sam's fingers slipping in to pick our wallets each time he does, we will take out our wallets and let him have our money only if we think it worthwhile. With income taxes and withholding, we don't feel those sticky fingers until several months after our pockets have been picked.