Let's Declare the Fourth of July a Tax-Free Day!

[Ed Hudgins]

Let's Declare the Fourth of July a Tax-Free Day!

[This op-ed was published in The Washington Times, The Sun Sentinel (Fort Lauderdale, Florida), The Orangeburg Times and Democrat (Orangeburg, South Carolina), and The Pueblo Chieftain (Pueblo, Colorado); it was the subject of a commentary and quoted extensively in The Tribune-Democrat (Johnstown, Pennsylvania). Enjoy the op-ed and the holiday!]

July 4, 2007 -- On July 4, 1776, America's Founders declared the country's independence from Britain, largely as a revolt against excessive and unfair taxation. So in our nation, which is much more overtaxed than it was over two centuries ago, it would be fitting if, in recognition of our Founding principles, federal, state and local governments made July Fourth a totally tax-free day.

Many cities already suspend sales taxes for a few days a year on items such as clothing and school supplies, usually to garner the favor of overtaxed parents struggling to raise kids and to give mom and pop an incentive to frequent overtaxed downtown enterprises struggling to make profits. So wouldn't it be appropriate for all of us who struggle every day to be allowed to keep our money on that day on which we celebrate our freedom?

The total direct tax burden on Americans — not counting the indirect taxes of regulations — is estimated at about 35 percent of our $13 trillion gross domestic product, or $4.5 trillion. That works out to more than $12 billion we would keep in our own pockets if we were truly independent on Independence Day.

We wouldn't have to pay taxes on the hotdogs, beer and barbecue we purchase for Fourth of July picnics. And since for most of us this is a paid holiday, for that day we would receive our paychecks without income tax, Social Security taxes, unemployment insurance taxes and the like taken out.

Such a tax-free day would be the time to fill up large SUVs and save $10 a tank in various fuel taxes. Malls would soon see Christmas-season sized crowds as shoppers seek to stretch their dollars.

"Cute idea" you might say, "but since July Fourth is a holiday, many enterprises would be closed and therefore many individuals would not reap the full benefits of such a policy."

But no doubt many individuals and enterprises would seek ways around other taxes. Eventually Wall Street, brokerage houses, banks and the like would stay open to avoid, for example, capital-gains taxes. Everyone could end up working that day but, hey, most of us would get overtime pay that would not be taxed.

The Fourth of July could become the most commercially active day of the year. Picnics would be pushed aside for pension plans. Fireworks would give way to long work days. Time with the family would be replaced by time with financial facilitators.

But won't this defeat the spirit of Independence Day? No. Taxes defeat the spirit of Independence Day.

The Founding principle of this country is the right of each individual to life, liberty and the pursuit of happiness, which all of our Founders acknowledged includes the right to acquire and own property.

Millions of individuals came to these shores not to have their income redistributed by politicians but to work producing goods and services to make a prosperous life for themselves and their families. They wanted to realize their dreams of personal autonomy and independence, to run their own lives without the interference of masters, whether feudal lords or local bureaucrats. So what better way to celebrate Independence Day than through economic activity independent of government?

Still, it would be better to retain traditional celebrations of the Fourth of July by returning to the antitax traditions we celebrate. Excessive taxes and government regulations rob us of our money and our autonomy and thus undermine that spirit of individualism by which each of us creates our own flourishing lives and spirits and that constitutes the spirit of America.

Yes, let's ask our elected officials as a start to declare July Fourth a tax holiday. And let's insist they build on that day by cutting back taxes and thus expanding individual independence, which is the essence of America's political and moral revolution.

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Edward Hudgins is the executive director of the Atlas Society — the center for Objectivism that celebrates human achievement.

[Chris Grieb]

Ed; How about having the rest of year tax free and we pay taxes on the 4th.

[galtgulch]

Ed; How about having the rest of year tax free and we pay taxes on the 4th.

Ron Paul said that the income tax only accounts for about one third of federal revenue at this point. What would be left if the income tax were repealed and replaced with nothing, the remaining federal revenue would equal the entire federal budget of the year 2000 and cuts could certainly be made to reduce the federal budget to that level.

Your suggestion sounds like it was made in jest and would certainly be a step or an increment in the directio we want. However you and we should be careful not to give our moral approval to what we consider to be immoral. It is obvious that I mean one should not approve the taxation on the income or assets or capital gains or inheritance or property of any individual even for just one day!

It is comparable to the Abolitionist's contention that slavery be abolished all at once and immediately on moral grounds and our position should be the same regarding taxation given we consider it is an abomination and immoral.

galt

Edited July 4, 2007 by galtgulch

[Ed Hudgins]

Chris -- Yes, I'd go for 364 days of no taxes with one day of very, very low taxes to fund a very, very small government!

Galt -- I usually use the short op-ed format to get people thinking rather than to present long policy or philosophical arguments, which wouldn't get published in most newspapers anyway.

I was actually in a meeting and the chair was announcing that we wouldn't be meeting the next Wednesday, July 4, that we'd be "free that day." As a witty retort I said "It would be great to be free that day" meaning politically "free." The line got a laugh and I thought "That would make a good op-ed. Start with the premise that on the day we celebrate our 1776 revolution to establish individual liberty, maybe the government at minimum could free us from the tax burden for that day." Such an op-ed would get people thinking.

I did mention in the piece not only income taxes but capital gain and many others that make up that tax burden that Ron Paul rightly damns. I didn't mention in detail the regulatory burden, which is probably about $1 trillion at the federal level alone because, since this was supposed to be a short, thought-provoking op-ed, not a policy paper. So let's hope lots of readers get the point!

By the way, if you go to our website, www.atlassociety.org, you'll find a lot of pieces addressing the moral aspects of the tax system.

Here's one on "April 15: A Day of Moral Shame."

Here's one on "Tax Policy is Moral Policy."

In most cases I made presentations of these pieces at an annual April 15th anti-tax events at the National Press Club in Washington which were broadcast on CSPAN.

[Michael Stuart Kelly]

Ed,

I like this piece! It is a wonderful idea.

You know, this could become a political issue if someone wanted to invest the time and energy to collecting signatures, etc.

That would be a precedent. Then there are other holidays...

Michael

[Chris Grieb]

I see one problem. Very few places are open of July 4th. A better idea might be the day after Christmas.

In this discussion there was a small debate in the Libertarian Party about going to flat tax. The party moved to the position that there should be a flat tax and it should be zero. I think the same thing should be done with tax holidays. All days should be tax holidays.