While it might strike you as odd that this column should begin with a disclaimer, it seems appropriate nonetheless.You see, this month's column has absolutely nothing to do with logistics. Its topic does, however, have one very important thing in common with logistics. Like logistics, it touches the lives of every single American every single day in a very substantive way.
It's not that I had planned to wander off the topic of logistics: I fully intended to write about Congress's call to restrict the use of tandem trailers on interstate highways, or the expansion of the "lean" concept from manufacturing operations to logistics operations, or how quickly Wal-Mart and its top-tier suppliers are moving forward with RFID. But as I was picking up my pen (or, to be precise, putting my fingers to the keyboard), I got distracted by an online news alert that popped up on my computer screen: "Fed Chief Greenspan Suggests Shift from Income Tax to National Sales Tax." Wow, I said to myself. Imagine the impact. No more federal payroll deductions. No more annual tax filing stress. A lot more money in your pocket—at least, that is, until you spend it.
It's not a new idea, of course. Politicians as dissimilar as Jerry "Moonbeam" Brown and Steve (Money Bags) Forbes have floated the idea of a national sales tax. One former presidential candidate, in fact, based his entire campaign on a call to abolish the federal income tax and replace it with a national sales (a.k.a. consumption) tax. That candidate (who wasn't even a politician) made his point so clearly and eloquently that I've never forgotten his words: "There is something inherently evil about a government that penalizes its citizens by requiring them to pay a huge tax for committing the crime of earning a living." (Can you guess who said it? I bet not.)
Any U.S. citizen who works hard for his (or her) money—and is rewarded with the privilege of paying a "fine," or tax, for his/her trouble—should give this serious thought. The benefits leap right off the page when you compare a sales tax to an income tax. For starters, with a sales tax, individuals have full control over the extent to which they're taxed at all. Save more of your money, pay fewer taxes. Spend more of your money, pay more. It's beautiful in its simplicity.
Next, it would do away with those tax loopholes we're always hearing about but that few American can take advantage of. All those opportunities to "hide" money from Uncle Sam's tax collectors would vanish.
Or consider the criminal element. It's a safe bet that peddlers of heroin or crack cocaine aren't declaring their income to Uncle Sam each April. It's an equally safe bet, though, that they spend much of their ill-gotten gains on cars, jewels, furs, mansions, whatever. With a consumption tax, they'd pay their taxes when they spent their money, just like the rest of us.
So why hasn't such a common-sense idea gathered much traction? First, the transition wouldn't be easy to orchestrate. In fact, it could create a short-term, but nonetheless crippling, cash flow problem for Uncle Sam. But that's hardly a reason to shy away from an idea that makes eminent sense. Second, proposals like this always meet with opposition from Democrats, who contend that a sales tax unfairly burdens the poor because it applies to food, clothing and other necessities. Based on personal experience, I'm pretty confident middle and upper class Americans also wear clothing and eat food, so that argument doesn't hold much sway.
What is clear is that a taxation system that seizes almost 40 cents of every dollar earned by the average citizen is a system gone terribly awry. In fact, it might just be, as that old presidential campaigner suggested, an evil system that borders on being criminal.Who was that candidate? The late, great and supremely eccentric "Mother of Invention" himself, Frank Zappa. But don't laugh. Frank was right!