Sales Tax = Less Sales

Republicans in the U.S. House of Representatives and in several of our recently elected state governments seem to be favoring an increase in sales taxes to finance their activities. This is insane if they truly wish to serve their supporters in the business community. Sales taxes take the wind out of the sails of the economy more directly than any other form of taxation. Sales taxes siphon money out of the transactions that create a healthy economy, namely the making and movement of stuff. If the money in people's pockets buys less stuff then stores sell less stuff, salespeople and transporters and manufacturers lose the business of making and moving stuff and more people are laid off and our economy begins to resemble the U.S. in the 1930s.

Do the Republicans hate Obama so much that they are willing to tank the economy and damage their base just to keep him from succeeding? Is the business community willing to let them do that?

Perhaps the problem is simply that income taxes are politically unpopular. Republicans have pledged not to increase income taxes, but the budget cannot be balanced responsibly without increased revenues. Where else can they go but to sales taxes? Well, other nations have gone to Value Added Taxes. That is one possibility but the problem is that those other nations are European Socialists. Certainly we don't want to copy them.

We could tax imports more heavily but import taxes are really another form of sales tax levied at a higher level. Wal-Mart would scream bloody murder.

So how about taxing land use more heavily. No one really owns the land. Kings used to think they owned land and could grant it to their favorites, but the American Revolution disposed of that notion. Our governments at various levels reserve some land to themselves but individuals and corporations pay for their land, either in purchase price or rent. One of the gaps in our economic laws is that land purchases exist in perpetuity and can be passed on to inheritors. This often leads to poor economic use of our national land treasure.

A better and fairer system would assign all land to a unit of the people's government and limit land usage entitlement to a fixed period, such as 50 years, after which control reverts to the government. A person or corporation wishing to continue to use the land would negotiate a price for a fixed period. That price could be a lump sum or a rent but the proceeds would go to the government and would be used to pay for necessary government services.

For Republicans the wondrous part of this solution is that it takes us back to our roots. Hallelujah!