This
article, "States tackle tax reform when Washington won't,"
deals with three topics: seven states now make ends meet without income taxes,
unshackling businesses from crippling income taxes would lead to job creation,
and considering tax reform at the federal level seems more necessary, yet more
unlikely than ever. All this means that
the states are beginning to take the initiative to try to get our country out
of the fiscal hole because the federal government won't.
Alaska, Florida, Nevada, South
Dakota, Texas, Washington, and Wyoming have done
fine without income taxes. Tennessee and New Hampshire have
income taxes, however, it is only on capital gains or dividends. This status has only affected the people in these states in positive ways. There
are more jobs, better jobs, and the potential for a higher income per
capita. Louisiana, Kansas, Nebraska, and North Carolina are considering
replacing their state's income tax with an expanded sales tax.
For states without corporate tax, from 2002 to 2011, Wyoming, Texas, Nevada, and
Washington, on average, had an annual economic growth that was a full percent
higher than the other 46 states. Due to the slight differences in each state’s
proposals, each state would have different results. There is evidence from the "Tax Foundation" that these states do and will prosper.
From
the business side of it, as stated in this article, unshackling businesses
from crippling income taxes would lead to job creation. Lower taxes for high-income taxpayers will potentially increase economic
activity and employment. That lowers taxes for job creators to create jobs, and
do so quickly. Inasmuch as the national
unemployment rate is 7.8%, the hope of more, and better-paying jobs is
highly welcomed. For example, a proposal to eliminate income taxes and replace them with consumption taxes in North Carolina could lead to between $14.4 billion and $25
billion more in personal income over a decade.
An additional $1,500 to $2,600 of income per employee would be received with excitement.
Federal tax reform may be
necessary, but more unlikely than ever. However, these states and their governmental leaders should be applauded for considering the eradication of income tax. What could happen is the implementation of a federal sales tax or a federal flat tax. Everyone pays tax in federal sales taxes. It is a fairer tax, as anyone in the country would pay as they purchase. A true federal flat tax would tax each person at the same percentage with no deductions or adjustments. It could eliminate the need for the bureaucracy of the IRS.
The founding fathers did the
right thing by giving states the right to change things for the people’s good. There is still hope for the country to recover. The states are utilizing their
right to pass laws for the common good whether the federal government does
anything about it or not.
