Prescott Valley, AZ Correspondent-Eliminating taxes will likely not happen as there will be tax shifts to make up for any termination of state or federal income taxes. If taxes are done away with, there will always be replacements through other sources of revenue.
If alternative sources were to be eliminated, there likely would be negative consequences but with many states currently proposing tax shifts, there will be replacements offered that will, in the long run, compare to the cost of taxes. People will challenge the productivity of the alternatives, but if they know that the tax replacement will help the infrastructures of their states, the alternative to state income taxes might be an easier pill to swallow. With state and federal entities needing monies to support the state and federal decline in infrastructure, any impending doom will be absorbed by individual taxpayers who share most of the burdens anyway.
Common tax shifts are developed by state legislatures and are based on the elimination of personal and corporate income taxes and many states are taking these shifts into consideration. Any loss of tax revenue is usually made up for through expanded sales tax programs and other programs disguised as taxes. Gasoline taxes, cigarette taxes, food taxes, liquor and soft drink taxes are all revenue generators and every state looks to these kinds of taxes to offset income taxes tax programs. A number of state legislatures that support lowering and eliminating income taxes are looking for and using these tax alternatives.
To soften the blow, the trend in tax cuts is one of small incremental increases over longer periods of time, which is supposed to project revenue losses into the future, while other trends show movements toward one or single rate income taxes and expanded sales tax programs to make up for personal and corporate income tax revenue losses.
Offsetting taxes in one way or another through tax shifting programs appears to be the trend of state legislatures and until federal income tax guidelines are drastically changed to eliminate heavy tax burdens on certain segments of the populations through fair or flat tax policies, these kinds of ideas will continue to be part of what state legislatures will do to say that they are meeting their promises of reducing income taxes through shifting tax burdens in various directions.
Never say never, but disastrous circumstances are not likely to occur with the elimination of taxes because there will always be other sources of revenue to take the place of state and federal income taxes. Sales taxes, value added taxes and related tax shifting will be the new revenue producing burdens that citizens of various states will deal with next while they’re waiting for the long overdue overhaul of the IRS.
Owatonna, MN Correspondent-A letter to the editor published recently in my local paper about the need for, and benefits of, taxes caught my attention. The writer asked: “Where would we all be if the generations before us had not been willing to pay taxes to set up the infrastructure we depend on now? Our roads, schools, teachers, emergency personnel, clean water and air, etc., would not exist.”
My answer is this: We might be magnitudes better off without taxes. The letter writer wrongly presumes—as do most people—that the absence of taxes, and by extension, the absence of government, would result in a vacuum. If the government hadn’t taxed us to provide that road, bridge, school, or service, it would never have been produced.
I wholeheartedly disagree. We can’t know what our lives would be like without taxes because we can’t turn back time and conduct a world experiment by which taxes were never conceived of and imposed by our so-called leaders. Entrepreneurs and business owners, seeing ways to make life better for citizens and/or realizing a profit potential, would have all along been filling the vacuum left by no taxes.
Smart people with a talent for teaching would start their own private schools, which is what actually happened centuries ago. Public education didn’t become widespread until the 20th Century. Education would have spread to the masses as owners of these schools realized the desire for people to learn. School owners open more schools, hire more teachers, and admit more students. Competition with other schools would drive costs down, making education even more affordable. Schools, teachers, and education would not merely vaporize without taxes.
Business owners who desired to market their products to more consumers would have (and did) build their own roads, then ships, then trains, then airplanes to make distribution easier. They might have banded together to build and maintain more roads, which would encourage more business to business trade. When roads became numerous enough and reached more locations, workers and other travelers might be inspired to use them and be willing to pay a small fee to the owners of the road for the privilege of driving on them.
Other government functions we assume can’t be handled by anyone else would be taken over by interested parties who would either provide their services voluntarily or find a way to make at least a small profit and make that service available to all who were willing to pay.
Nature abhors a vacuum. Abolishing taxes would only create a vacuum that would immediately be filled by another entity. Humans are unique that way. They are always looking for ways to make life better, simpler, and less expensive. Taxes have hindered those goals more than they have helped achieve them. A world without taxes would not be a disaster.