Ideal Tax Simplicity - The Sales Tax

The simplest and least intrusive tax is a sales tax. The federal goverment should replace the income tax with a sales tax.

Here is how the system could work:

1. The government would set one rate (i.e. 17%).

2. The government would decide how much spending should be exempt from taxes (i.e. $10,000 per adult, $5,000 per child, so $30,000 for a family of four).

3. At the beginning of the year, the government would mail checks or direct deposit to everyone with social security numbers. (i.e. $10,000 x .17 = $1,700 for adults, $5,000 x .17 = $850 for kids, so $5,100 for a family of four).

4. Whenever someone buys something from a store, sales tax would be collected.

5. Since most states already collect sales tax, the government could contract with the states to handle the federal tax collection as well. The states could be allowed to keep say, .2%, for the trouble. For non-sales tax states, the federal government would probably collect it.

You can read the next part of this essay here.