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Tuesday, November 02, 2004  

Politics: Meet the Max Tax

Not long ago, I read up on the history of the idea of a national sales tax. The topic is of interest because the Bush administration is said to be plotting to impose such a measure if it achieves a second term. The Club for Growth and other Right Wing groups pursue the idea of a national sales tax because it would favor the wealthy. A form of flat tax, a national sales tax would mean all persons making a given purchase pay the same amount of tax. But, since the poor and middle-class have less income to begin with, the brunt of the tax would fall on them. An example. Jack the venture capitalist must pay a 30 percent sales tax on gas. So must Jane the supermarket clerk. However, because her wages are low, the tax takes away much more of her income than it does his. One of my concerns in reading about the national sales tax was that citizens would not understand that most of them would lose more income to taxes under it. Instead, they might focus on the rhetoric of the Right, which emphasizes there would no longer be an income tax. A political race in Georgia has raised the topic in a way that cuts through such obfuscation. A Democratic challenger to a Republican representative has brought the topic to the forefront. He says the Republican helped sponsor Rep. John Linder's, (R-Ga.) House Resolution 25 (2003), which is a proposal for a national sales tax. The contender has decided to call the it the Max Tax.

The Augusta Chroniclereports.

The 12th Congressional District race between incumbent Republican Max Burns and Democrat John Barrow has boiled down to a war of words. Angry words at that.

Angry words over negative campaign ads and Mr. Barrow's turning Mr. Burns' support for a national sales tax into a catch phrase, the "Max Tax," have Mr. Burns crying foul.

. . .Mr. Burns said the sales tax will increase the number of Americans paying taxes from 110 million to 250 million and force illegal immigrants and those in the underground economy to pay taxes.

Mr. Barrow contends it will shift the tax burden from big business and the wealthiest to the lowest-earning 80 percent of Americans.

Barrow, a Harvard Law School graduate, is right. The hidden economy would not more than double the number of people paying taxes even if it could be tapped by a national sales tax. The rhetoric about illegal immigrants has more to do with xenophobia than reality. They already pay most taxes.

I was reminded in a recent discussion at a large group blog that there are lunkhead working-class people out there. Tell them they will not have to deal with the IRS anymore, and they might favor whatever is being offered in its stead. Never mind that they would be working against their own best interests. So, it is important that the problem with a national sales tax be made clear. Burns is angry partly because his first name, 'Max' is attached to Max Tax. But, I like the term. It describes what most people would be paying under a national sales taxation plan -- maximum tax. I hope the name Max Tax sticks and goes national.

Reasonably related

• I previously blogged the history of the idea of a national sales tax.

• This just in. Barrow has been projected as the winner of the House seat.

11:30 PM