Y2K as a poly to get national sales tax.

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With the imminent demise of the dreaded IRS, according to reliable govt reports, how exactly does Washington propose to fund itself into the next millennium?

Especially given the failure of the existing system -- as evidenced by the increasing numbers of individuals (10 million? 20 million?) that are volunteering themselves out of the present tax scheme -- to collect all that they can get.

Contrary to popular belief, I'm sure the made "movers & shakers" in the smoke filled backrooms have been huffing & puffing overtime to assure themselves of continued transit on the gravytrain.

How exactly might "they" do this? Well, doesn't there exist in most states an apparatus for the collection of taxes at the point of sale? Hasn't there been kicked around the possibility of a national sales tax? A tax much like the universally hated Canadian GST? Wouldn't the state govts just love to collect (for a small processing fee of course) a national sales tax?

Again, contrary to popular belief, the boys in Washington do make long term plans, especially if it involves their induhvidual welfare. NAFTA is a good example.

As we get closer and closer to the dreaded year 2000, the PR induced hype is just going to increase. The 50 million or so Social Security recipients will not be denied their check every month. The 20-30 million govt retirees will not be denied their checks every month. The 20-40 million welfare recipient will not be denied their checks every month! So, to summarize, those 90-120 million people will not be denied their checks every month.

In 1996 there were about 250 million people in the U.S., of that there were about 176 million adults. The reality is that about half the adult population receives a govt check every month.

So as the hype increases, a last minute "solution" will be dusted off and proposed in which the existing "income" tax is replaced by a "use" tax, and then when the new computer system is up and running, a combination "use" and "income" scheme -- which of course will be "fair" to the lower economic classes -- will come into play. And we all know how fair this scheme will be to the middle class, don't we?

As the man said, the "public" will be played like a fiddle.

-- chuck petras (cpetras@stratos.net), April 09, 1998


Set aside your political opinions for a moment, and consider the practicality of your prediction. It seems that you're predicting that the federal government will instruct all 50 states to collect monies through an existing sales-tax conduit, and then funnel the monies to Washington. First and foremost, this implies that all 50 states still have functioning computer systems in the post-Y2K era, and most specifically, that their sales-tax computer systems are functioning. But it would require new systems to be developed, because the states would want to collect their existing sales taxes IN ADDITION to the new federal sales tax, and they would need systems to account for the monies and transport it to Washington. Chances are the states would squawk and drag their heels, and at least a few of them might argue about the constitutionality of the whole thing...

Here's a simpler alternative: since the overwhelming majority of working adults receive a paycheck from a corporate employer, there's already a mechanism to collect taxes "at the source" -- the witholding taxes removed from the paycheck by the employer. As you may know, the employer aggregates all such witholding taxes, and deposits it in a bank, which then transmits it to the Treasury. If corporate payroll systems are still working, and if the banks are still working, and if the telecommunication system is still working, and if the Treasury is Y2K compliant, then all of this can continue to function as it currently does. Of course, if there's a breakdown in any of this "supply chain", then it won't work either...

In any case, the point of this is that if/when the federal government concludes that the IRS won't succeed with its Y2K program, an alternative will have to be found very quickly, and it will have to be something that requires a minimum of new systems development, and a minimum dependence on other Y2K-vulnerable systems. I don't think it will be very easy.

-- Ed Yourdon (yourdon@worldnet.att.net), April 12, 1998.

The real reality is that it is not possible long term to play God and pretend omniscience. Reality is too "organic" and attempts to take on God's attributes end up being too brittle to survive the natural flexing of our overall environment over time.

The microchip and the Internet are part of the same trend as Y2K - power is flowing from the center to the edges. The Soviet Union was one of the first to fall. We are right behind them.

-- Too Scared (cant@dothat.com), April 12, 1998.

I had a similar thought. The GOP has been trying for a while to abolish the IRS. If Y2K disables the IRS, I can picture the Republicans using that as an excuse to close the agency permanently. "It'll be cheaper to switch to (flat tax/universal sales tax/other scheme) than to fix the IRS" It might even be a popular sentiment. Current Congressional actions could ensure the IRS' demise. Page 252 says "But given the IRS' dismal track record in using previous computer-related appropriations successfully, there is some doubt as to whether these funds will indeed be approved by Congress." This year's Congress could deny necessary Y2K funding to the IRS, on the grounds of fiscal responsibility. That would ensure the IRS would die in two years, thus opening the way for a new tax system. I know one shouldn't accuse subterfuge when incompetence is a more likely excuse, but this scenario actually does worry me.

-- Elisabeth Riba (lis@netcom.com), June 15, 1998.

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