Stop the (Tax) Madness

Jan Larson

April 15 marks the culmination of an annual rite of spring for most Americans - the arduous task of filing their federal income tax return. Local newspapers devote several column inches to provide taxpayers with information on tax law changes, where to get forms and where to get help while local news stations devote a few minutes of airtime to plant a reporter at a post office to interview or photograph beleaguered taxpayers rushing to get their returns postmarked by the deadline. Yes, Tax Day gets media coverage, but it is not good news.

If you would like to download the Internal Revenue Code [1], I hope you have a high-speed Internet connection, as it occupies over 24 megabytes, and plenty of paper to print the 10,000 pages. If you have a question about a particular aspect of the tax code, you might try reading any of the over 450 publications and notices [2] or 800 forms and instructions [3]. If you don't have time for that, a quick call to the IRS will resolve your problem. Maybe. Of course if you called again, you might get a different answer.

Let's face it, the U. S. tax system is hopelessly broken and is beyond repair. It is a massive collection of patchwork fixes to real or imagined problems, special favors for selected individuals and groups and attempts to implement social engineering to control or influence the behavior of all Americans. Every attempt by Congress to correct something "wrong" with the tax code results in additional layers of complexity.

For every tax break or credit one group receives, another group must make up the difference. For every child tax credit a parent receives, a childless individual or couple must pay. For every mortgage interest deduction a homeowner claims, a group of renters must pay. For every tax credit received by businesses in one industry, a small business in another industry must pay.

Tax credits and tax breaks for favored groups are a politicians' currency. John Kerry's entire campaign is based on handing out tax breaks to one group or another.

It is time for the U. S. tax system to be abolished and the favors, breaks and credits for the few at the expense of the many be abolished as well. It is time for the Fair Tax [4].

The Fair Tax would eliminate the Internal Revenue Service as we now know it and replace the income tax with a national consumption or sales tax. There would be no favors or credits that could be manipulated by Congress. Congress could, of course, raise or lower the sales tax percentage, but that would be abundantly clear to every person in the country when he or she purchases goods or services. Knowing what you are paying to the federal government every time you make a purchase would make the government accountable to us, the American people.

The Fair Tax would eliminate an estimated $225 billion in compliance costs to American businesses and individuals. The elimination of these costs would provide a tremendous boost to American businesses with respect to foreign competition. The Fair Tax would eliminate the many hours Americans spend each year poring over receipts, W-2 and 1099 forms. It would eliminate the cheating and fraud that results in millions of dollars of taxes due each year to escape collection. The Fair Tax would capture taxes from the so-called underground economy. Even drug dealers, embezzlers and thieves buy things, but as of today, none of them pay income taxes.

Under the Fair Tax, every worker would keep 100% of his or her paycheck. Tax is collected only when goods or services are purchased at the retail level.

The Fair Tax protects the needy by providing a monthly rebate payment equal to the amount of tax that would be paid for necessities up to the federal poverty level. Every family with income below the poverty level would not pay any federal taxes.

There are bills in both the House (H. R. 25) and Senate (S.1493) to implement the Fair Tax and abolish the income tax. (The text of both bills may be found by searching the Thomas database at http://thomas.loc.gov).

There is growing support among Americans of all economic circumstances for a tax system that is fair. Fairness demands that no one should benefit from the tax code at the expense of others. Nothing could be fairer than a consumption tax that affects everyone equally.

If you are one of the millions of Americans tired of seeing a massive portion of their paycheck disappear before it is cashed, spending hours filling out indecipherable tax forms and feeling glad to get back a few dollars of your own money every spring, write or call your Congressman and Senators and urge their support for change and for fairness in the tax code.


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[1] http://uscode.house.gov/title_26.htm
[2] http://www.irs.gov/formspubs/lists/0,,id=97819,00.html
[3] http://www.irs.gov/formspubs/lists/0,,id=97817,00.html
[4] http://www.fairtax.org

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Jan A. Larson is currently employed in private industry in Texas. He is a staunch supporter of honesty in government, fiscal conservatism and equal opportunity for all. He holds a bachelor of science degree from the University of Nebraska, a master of science degree from the University of Kansas and an MBA from Colorado State University.
jan@pieofknowledge.com