Posted: Jun 06, 2005 By: Joe Hernon

Subject: Tax Reform

Comment: What is fair, and what is necessary, do not always coincide; however, with tax reform, we can have the best of both worlds. I believe we need to completely eliminate all income taxes; federal, state, and city. The reason for this is demographics and current tax law. Our population is aging and many people have taken advantage of tax free investements. How effective is an income tax when a large percentage of your population is retired and living on tax free interest??? When you look at it that way, it is not a hard point to make that the income tax is obsolete and should be replaced with a consumption/sales tax. Of course not all goods and services would be taxed at the same level. Necessity items such as food, medicine, primary housing, primary transportation, clothing, etc would be taxed at a lower rate than non-necessity items such as toys, CDs, boats, extra car, ATVs, second house, etc. The same rate would apply to the consumer, supplier, and manufacturer; materials for toys would be taxed at the higher rate, and materials for medicine at the lower rate. We can also use a consumption/sales tax to help move consumers & manufacturers to choose goods and services that are beneficial to them as an individual or to the nation as a whole. For example; an ineffecient vehicle that only gets 15mpg would have a higher tax rate than an efficient vehicle that gets 50mpg. Junk food such as candy and high fat food would have a higher rate than fruits & vegitables. This can even be applied to help convert our economy to renewable sources of energy. For example; a solar hot water heating system would have a lower tax rate than a traditional electric or gas hot water heater. The rate on gasoline would be higher than that for biofuels. And, the tax rate for power generated from coal, oil, or gas would have a higher rate than power generated by solar, wind, or nuclear. Although nuclear would have a higher rate than solar and wind, to help pay for solving the problem of hazardous waiste.

The above examples are only the tip of the iceburg. However, we would need to be very careful in determining which products and services received higher or lower tax rates. Unfortunately, corruption is prevelent in our system, and some individuals, companies, and industries would "lobby" (I call it bribe) officials to give their product or service a lower rate. We would want to set up a panel consisting of an equal number of appointed and elected members that would set the tax rate, and a 2/3 majority would be needed to pass a measure. This would help prevent politics, power, and greed from having too much effect on the process. Also, all meetings would be recorded and available to the public. And, members of the panel would be prohibited from accepting trips, gifts, money, or jobs from any company, idustry, or group. It would also be illegal to put different rates on products or services in the same catagory or class. For example; all cars that get 50mpg or more would be at the same tax rate (A GM would not be at a lower rate than a Honda). Even though it would be nice to support domestic companies; except in cases of national security, we should let the free market determine who survives.

Yes, I am an environmentalist that is also a fiscal conservative and a security hawk. Kind of a weird combination, but, I have studied history, and feel I know what I am talking about; unlike some of our current and past officials.

Thank you.