Ed Morrissey of Hot Air brings us the joyous news of an exciting new adventure in taxation, playing out as we speak upon the desperately under-taxed streets of Minnesota. Since high gas prices and increasing fuel efficiency standards are leading Americans to purchase less fuel, state and federal governments are mulling over the idea of taxing mileage instead. As Ed notes, “one main practical obstacle is that gaining the data from millions of cars will be expensive, clumsy, and almost certainly reliable.” Sounds like a perfect government program to me!
Minnesota’s Department of Transportation is doing its part for the evolution of tax law by looking for volunteers to help test a smart-phone app that will track their mileage and submit it to a central database. Big Government hopes it can one day upgrade this database and give it the ability to siphon money directly from your wallet.
Taxes are generally based on activity, which means they carry two built-in burdens: they increase the cost of the activity, and they require increasingly detailed tracking mechanisms to measure taxable actions. Under a flat tax with few deductions, you’d be filling out a postcard each quarter, and submitting it with a simple income statement from your employer or business enterprise. As the government grows, it increases both the level of taxation, and the realm of taxable activity, to feed its ravenous hunger for revenue. A massive government inevitably becomes intrusive, because it must calculate tax on ever-greater portions of citizens’ lives. By definition, no government will ever respect privacy more as it grows, any more than it will display a greater respect for liberty.
Before the monster State tags us like so many captured birds and releases us into the wild so it can tax our movements, I would suggest a cleaner, easier alternative… a new tax on an untapped realm of human activity. It’s time for the Tax Tax – a tax on the amount of time it takes to fill out tax forms.
Monitoring this activity would be a relatively simple affair. People have been clamoring for faster and easier online filing – you can easily apply for a mortgage online, but it’s still too cumbersome to file taxes that way. Instead of spending billions to outfit our cars with gadgets that could break down or be sabotaged, the state and national governments should invest in a streamlined, upgraded irs.gov that helps taxpayers complete electronic forms… and begins computing the Tax Tax as soon as they log in. Added benefit: if politicians want to squeeze out some more tax revenue, they could just make the website a bit harder to use, and increase the page loading times. Subtle, and effective!
The Tax Tax would be steeply progressive. The Noble Poor wouldn’t have to worry about it at all – the bottom 47% of American wage earners don’t pay income tax, but most of them do have cars, so they’d be hit hard by a mileage tax. The Sainted Middle Class only needs a few minutes to fill out their 1040EZs… and if they’re lucky enough to have enough itemized, deductible wealth to merit a full 1040 form, they should pay a little more, right?
At the other end of the spectrum, the Evil Rich fill out extremely elaborate tax returns. President Obama’s pals at G.E. had to push a lot of paper to come out with zero taxable income on $14 billion in profits. Why not tax all that paperwork, as part of the never-ending effort to make them pay their “fair share?”
High taxes tend to suppress taxable activity. If the Evil Rich decide to spend less time on paperwork that becomes subject to the Tax Tax, and overpay their taxes instead of looking for shelters, great! It’s win-win for the Treasury. If they under-pay their taxes because they’re in a hurry… well, we have already have enforcement mechanisms and fines in place for that, provided the scofflaw is not a Democrat politician.
A recent study by National Taxpayer Advocate Nina Olson concluded that Americans spend about 6.1 billion hours a year complying with the tax code. That’s a lot of taxable activity just begging to feel the hot breath of our corpulent, starving government. A tax of just two hundred dollars per hour on federal taxes would wipe out the deficit! Call or write your Congressman to propose this exciting idea today. You can thank me for the inspiration by suggesting a generous exemption for bloggers! We’re shut-ins who don’t drive around much, so the mileage tax wasn’t going to get us anyway.