How about a tax on reading?

Sept. 2003  — Q: I have heard that if there was a reading tax on every type of reading material (religion included) that it would raise $800 billion a year. And if we strictly held it to pay the debt, it would help our children. So why do we not bite the bullet and do something with this idea? This example is based on a 5-cent tax per dollar ratio. Are we so uptight that we can’t ask for help from every tax-exempt business, and make the results of the question public?— David, Alturas, Calif.

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A: There’s no shortage of ideas about how the government could raise more taxes — just look at the list of recent proposals in your state.) The question most people in California (and the rest of the country) are asking is: Are current deficits the result of government not having raised enough in taxes — or the result of government spending too much money? It’s an old question, and if there was an easy answer, we wouldn’t still be arguing about it.

Still, even the most die-hard tax-cutter will acknowledge that — no matter how much you cut spending — you need some form of taxation if you want to retain some form of government. So what should you tax? The simplest strategy is to tax income (the money that’s missing from your paycheck every week) or spending (the sales tax).

But tax policy turns out to be a very powerful “carrot and stick,” which the government uses to try to influence people’s behavior. Over the years, our tax system has grown to include a variety of incentives (tax breaks for things like home ownership) and penalties (“sin” taxes on products like alcohol and cigarettes are very popular these days). More recently, tax policy has been shaped by companies, industries and interest groups that are willing and able to pay Congressional candidates to give them a tax break. Everyone agrees the system is busted, but no one can agree on how to go about fixing it.

Slapping a tax on reading may sound appealing because it would spread the cost of government so widely — reducing the impact to almost nothing on, say, a “per word” basis. But, for starters, the mechanics might be difficult to work out. Would you tax everything we read? Road signs? What about restaurant menus? (Web sites wouldn’t count, of course.) If just just tax books, would paperbacks be taxed less than hardcover? Why?

Heavy readers, naturally, would bear a much heavier burden than those who get all their information and entertainment from television and movies — regardless of how much the couch potatoes can afford or how much they use government services. How is that “fair”?

And is reading an activity that — by taxing — we want to discourage people from doing? In a world where education is a leading cause of health and wealth, maybe we should change our tax laws to encourage reading.