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666 Plan Alright

Sort of an ironic title for the plan of Professor Frank, no?

I call it the 6-6-6 plan — an across-the-board 6 percent national sales tax (on top of any existing state and local sales taxes) in effect from 6 p.m. on Thanksgiving to 6 a.m. on Black Friday.

This plan would leave both stores and consumers free to decide for themselves whether middle-of-the-night shopping is worth it. Even if some retailers decided to stick with the early openings and even if some shoppers showed up, the country would reap a significant benefit. As every mature adult realizes, we have to tax something, and the revenue from my 6-6-6 plan would make it possible to reduce taxes on other activities that are actually useful. Best of all, it would encourage Americans to spend Thanksgiving night where they really want to — in bed.

Longtime readers will know that Professor Frank is probably the only economics professor I have ever had that has left a real mark on me, but that doesn’t mean he gets a free pass. Other writers have already much discussed the irony above that a “tax increases choice” … what I’d like to point out simply is that in much of Frank’s writings (such as this one) a major concern is that lots of spending by the rich is wasteful and that very steep consumption taxes would improve welfare since those taxes could be funneled toward the non-rich. Now of course think hard about who the typical Black Friday shopper is? Is it Daddy Warbucks in his bunny slippers just hoping to get that one extra great deal on a new toaster? So now Professor Frank finds himself in the position of wanting steep consumption taxes on the rich (we’ve written lots on this in the past) and wants to tell the non-rich exactly how and when to shop. And of course this is all done in the name of … liberty.

Let’s suppose we are willing to accept this newest of Professor Frank’s proposals. Do we think that there will be no incentive to create a substitute for Black Friday? Would Professor Frank want to ban all efforts to price discriminate in favor of this class of consumers? So much more to say … but I want to spend some time checking out what deals there might be in store for me on Cyber Monday. Would the dear professor like to see that activity taxed too? I’ll be buying lots of books tomorrow, in case anyone is wondering.

UPDATE: I should be clear. I know what Professor Frank would say in response. In the article he says that taxes have to come from somewhere, so they might as well come from Black Friday sort of things. And I am sure he is able to articulate something like this – I truly would be better off if the entire internet were banned on Saturdays. On the tax point – I am sure Professor Frank is a mature adult – sort of like he claims only some opponents of this idea are — and will recognize that we rarely get rid of bad taxes in favor of better ones – we just pile on the bad ones on top of one another. Maybe if the world were populated with more “mature adults” then we’d need neither the 6-6-6 plan nor need to replace bad taxes with good ones. What was that we hear about reality?

UPDATE #2: By the way, don’t some bars stay open every night until 4am … in an arms racy sort of way?

4 Responses to “666 Plan Alright”

  1. “Best of all, it would encourage Americans to spend Thanksgiving night where they really want to — in bed.”

    It is presumptuous on a level which I find baffling that Frank thinks he knows where I (an American) would want to be on one particular night of the year.

    I am thinking of a number between 1 and 1000000, Dr. Frank, take your best shot.

  2. chuck martel says:

    “… a major concern is that lots of spending by the rich is wasteful and that very steep consumption taxes would improve welfare since those taxes could be funneled toward the non-rich.”
    Who decides what’s “wasteful”? Guess it must be professor Frank. And when you say “non-rich”, do you mean “poor”? This afternoon I paid cash for some onions and green peppers at the market. Cash I earned employed on a construction site. The two chubby ladies ahead of me paid for their purchases with a government-issued plastic card. They got their sustenance for simply being resident in the US. Why should I care if they’re poor? Neither of them has knocked on my door offering to mop the floors or wash my clothes. Being poor is God’s way of telling you that you’re lazy and/or stupid. If you’re poor maybe that’s the situation that you deserve, at least until you’re willing to do something about it.

  3. Harry says:

    Tax ’em for the mice/ tax’em for the lice/ tax ’em for looking in the mirror twice– the words of the Master of the House.

    An extra six percent on the Black Friday earlybirds? How clever.

    In Pennsylvania underwear is not subject to sales tax, but swimsuits are. Sliced liverwurst, rye bread, and onions are not taxed, but a liverwurst sandwich prepared at the deli is. If the Federal government eliminates its complexities, for example, rules on the valuation of underwear and swimsuits donated to Good Will, and we replace the income tax with a value-added tax, how many pages of the Internal Revenue Sales Tax Code be? Less than the current tax code? Will underwear be taxed? Will American-sewn boxers be exempt? How about silk underwear, or lined underwear? Think of a ten-volume definition of underwear, and another ten volumes on swimsuits.

    By the way, I believe tuxedos are taxed in PA, but lined trousers are not.

  4. Rod says:

    So what is a tuxedo? What defines ‘tuxedoness”? All of a sudden, I am getting the sleepies here, recalling the stimulus or lack thereof of reading Wittgenstein for Dr. Brown. Maybe there is a real job for phenomenologists after all — at the Pennsylvania Department of Revenue!

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