Typical of any election year, taxes have been a front and center issue. Flat tax, fair tax, 9-9-9, end the IRS, “the rich” paying their “fair share”… we’ve heard it all. A new plan I’d like to propose is one that clearly segregates the natural sovereignty of the individual, the state, and the nation. The idea is simple:
Whatever taxes an individual state collects, it pays 50% of that amount to the federal government.
That’s it. Some main points:
- Federal income taxes are eliminated, on both corporations and individuals.
- The IRS is eliminated – there’s no need for it as each state already has a department of taxation in some form.
- Each state can implement its tax structure as it wishes, just as it is today. Want a progressive income tax that makes the wealthy pay more? Fine. Want no income tax and only sales & property tax? Fine.
- Control is restored to the people. It is far easier to change a politician or policy at the state level than it is at the federal level. In the worst case, the citizen can vote with his/her feet.
- The states act as a barrier between & check on a bloated federal bureaucracy violating of individual sovereignty.
Essentially the citizen becomes the taxpayer to the state, and the state becomes the taxpayer to the federal. Think of it as the state paying a fee for belonging to the club and enjoying the benefits provided by the federal government. At the same time, the fee is held to a reasonable level. After all, if a state needs N dollars to effectively run its own government and provide the services that it provides to its citizens, there is no reason to think that the federal government should need more than the sum of all 50 of the various N’s to “provide for the common defense, promote the general welfare, and secure the blessings of liberty to ourselves and our posterity.”