Let's Abolish the IRS! Here is how! (PSS... State Use Tax)

For many years there has been a cry in the wilderness to abolish the IRS. And while steam has picked up in conservatives circles to replace the income tax with a VAT style tax, they completely miss the point. There will still be bureaucracy, there will still be discounts depending on how much you make , and there will still be corruption. There is also a sense of paternalism in this policy that government knows best by nudging you towards savings instead of spending. While I fully support savings, influencing economic behavior is not one of the functions of government if it is to exist at all. Regardless we can't back down from government just yet, but we can encourage states to be more independent and compete among each other (mini-panarchy) in the marketplace of ideas. So what do I propose?

If we look at history, some of the founding fathers got it right the first time. In other words we should have kept the Articles of Confederation. Now we could argue over the other merits of the Articles, but one thing they got right is the tax plan. The one flaw is the federal government could not enforce payment, which would be the one difference between that and the idea I propose, the state use tax. With the state use tax, you pay for what you use. So if for instance if Michigan uses $10 billion in federal services, then they will need to pay for it at the state level. However they come up with it is their business. They could impose an income tax, carbon tax, whatever. The important thing is the power to tax is closer to the people that will have to pay them.

Of a state becomes too burdensome, then an individual could just go to the next state that does not overtax them and set up residency there. This would fit spending to the populations needs. When you have a population of over 320 million people, each will have different needs. So why not have it be closer to the people it serves? It would also make the US more competitive by have 50 financial districts, which could compete effectively by tailoring their state's advantages to the global economy.

The major reason this would work is bipartisan support. More support has come from liberals than conservatives for this measure. Conservatives are skeptical, while liberals get that paying as you go makes more sense than extorting it through taxation, The major sticking point for liberals is that it would fix the red state takers, blue state takers mess, so they support it on that count. Conservatives find it hard to believe liberals would support getting rid of the income tax, but from what I have gathered, it seems like there would be universal support for this measure. However, not all conservatives are against such a measure. Darrell Castle, the Constitution Party candidate for president spoke in favor of a measure similar to this one. It is just a matter of time before it replaces the fairtax and the ultimate measure that will abolish the IRS.