I’m so lucky I get to be a cynic for a living — it’s so much fun. This week I get to throw water on an idea for taxation fairness floated in a New York Times opinion piece last week that told us “most wage earners pay their fair share while many business owners engage in blatant fraud at public expense.”
I know that’s already cynical without my help, but the article went on to endorse an optimistic solution to the problem: simply have banks report inflows and outflows.
Mm-hmm. We know how trustworthy banks are about reporting things.
But let’s suppose the banks do their civic duty and open up all their books for the government. What do you think happens now? You know how creative businesses and tax lawyers are.
Suddenly cash and bitcoin become much more popular. My immediate thought was to wonder what a $100,000 bill looks like. It turns out that it had Woodrow Wilson on it but they don’t make them any more. Now the biggest bill you can get is $100 because hardly anyone was using the larger bills.
That will change. Cash will be king (and queen) and bartering will make a comeback. So will Swiss and Panamanian banks.
Businesses, by the way, are not the only problem. The Wall Street Journal also last week reported that a “forthcoming” research report “estimates that the top 1% of households fail to report about 21% of their income.” The top .1% may be hiding twice as much.
Apparently, the more money you make, the less you can afford to pay taxes. Or maybe rich people are modest and don’t want to brag on their tax returns. Correlation isn’t the same as causation, so it may be that avoiding taxes makes you rich.
Whatever the reason for this phenomenon, those of us who are non-rich get annoyed by this.
So how do you make taxation fair? Long-time readers with eidetic memories will recall that I’ve already solved this problem. All the government has to do is give up on the idea of taxes and instead print all the money it needs. That’s what a mint is for.
This has multiple benefits. No one can cheat on their taxes — because there aren’t any. We don’t have to stress over complicated forms and worry about doing it right. And everything the government wants or needs gets paid for.
And, no, this won’t drive up the federal deficit. We just print money to pay it off.
I know what some of you are thinking — there will be horrible inflation. No there won’t. You just have to know how to spend all that money.
You could do the traditional thing and raise interest rates — elderly savers will be overjoyed. But what we’d really need to do is spend the new money on making things.
Consider basic economics: prices go up if demand exceeds supply. That means they don’t go up if you jack up supply.
So you take all the newly printed money and give everyone in the country a good-paying job making things or doing things that other people with new money will pay for.
No inflation and everyone is happy.
Write your legislator and demand action.