BUH-BYE, IRS: Former Libertarian presidential candidate and former New Mexico Gov. Gary Johnson calls for replacing income and corporate taxes with a single consumption tax.
By Rob Nikolewski │ New Mexico Watchdog
SANTA FE, N.M. — For 2012 Libertarian Party presidential candidate and former New Mexico Gov. Gary Johnson, the ongoing controversy at the Internal Revenue Service is further proof the agency should be eliminated.
“Imagine life without having to deal with the IRS,” Johnson told New Mexico Watchdog in an interview just two days after a new development in the IRS story, in which former IRS official Lois Lerner warned colleagues to be careful about what they write in emails amid congressional inquiries.
“None of it surprises me,” Johnson said. “To a higher degree or a lesser degree this is what happens when you have bureaucrats in charge that can manipulate the system any way they so choose.”
A federal judge on Thursday ordered IRS officials to explain under oath how Lerner’s emails disappeared and how they might be recovered.
“Come on, loss of emails? Give me a break,” Johnson said. “If that doesn’t outrage anybody who looks at this, then you’re out to lunch.”
Johnson’s call to abolish the agency dates back to 2009, after he met with a number of economists, including Jeffrey Miron, director of Undergraduate Studies in the Department of Economics at Harvard, who became an adviser in Johnson’s 2012 campaign.
“Let’s abolish the IRS, let’s eliminate income tax, let’s eliminate corporate tax, let’s balance the federal budget and if we need a tax, it can be one federal consumption tax,” Johnson said.
But how would that work?
Instead of collecting taxes from various sources, a consumption tax works from a single point of purchase. It taxes people when they spend money on any given item or service. By eliminating income tax, sales tax and others, the idea is that overall price would not go up and may, according to its advocates, actually decrease the overall tax burden on citizens.
“I think a great starting point for a debate and discussion over a national consumption tax is, let’s start with the Fair Tax, legislation that has been written up and I think signed up on by 80 congressmen and women,” said Johnson.
Critics say that a consumption tax benefits people with higher amounts of savings and, therefore, could hit low-income households harder.
UNDER FIRE: Some officials at the Internal Service have been accused of targeting conservative political groups.
“Under a consumption tax system all savings would be tax-free, it would all be taxed like a 401(k),” said Len Burman, a senior fellow at the left-of-center Urban Institute, in a 2005 interview with PBS. “But the question is, if people don’t get the special tax break will they still be putting money into retirement savings and if they don’t, if they just put it in their regular bank account, are they as likely to keep it until retirement, and a lot of people are concerned that in fact without the special tax breaks you could actually end up with less retirement savings and possibly even less savings overall.”
But Johnson said the advantages outweigh the disadvantages.
“Why would any company, anywhere in the world, locate anywhere but the United States, given zero corporate tax?” Johnson said. “The entire world will change their tax structure to emulate no income tax, no corporate tax, no more filing.”
Would it ever happen? After all, the current tax system is laden with incentives and tax breaks, such as deductions for charities.
“I believe it will take place because at some point all these smart people will actually get with it,” said Johnson, who has a page devoted to tax reform at the website for the Our America Initiative, a political advocacy committee he founded.
Johnson made headlines last week for becoming the president and chief executive officer of Cannabis Sativa Inc., a small company based out of Nevada that sells products that come from extracted oil derived from marijuana plants. But they’re not smoked; instead, they’re packaged as lozenges.
“We sell a product that’s sublingual, so it’s a sucked-on product, very pleasant, and I believe, much safer than alcohol,” Johnson said, adding the lozenges can be used for medical treatment as well as recreational use.
In 1999, Johnson became the first governor in any state to call for the legalization of marijuana.
“I remain the only governor that has ever espoused legalizing marijuana, to this day,” Johnson said.
Since being named CEO, Johnson said the company’s stock jumped two points.
“Tens of millions of Americans use marijuana … those people make up half of everyone we know,” Johnson said. “These are our friends, these are our families, these are our co-workers, and you can label their choice to use marijuana as a bad choice, but I’m going to say it’s not criminal. Our kids are not criminal, our parents are not criminal, our co-workers are not criminal, our friends are not criminal.”
Here’s New Mexico Watchdog video of Johnson talking about taxes:
And here he is talking about his support of marijuana legalization:
Contact Rob Nikolewski at firstname.lastname@example.org and follow him on Twitter @robnikolewski