For years I've had someone do my taxes, not because I can't figure out how to fill out the form, but because I need an expert who knows what deductions I can take and who constantly keeps up with all the confusing changes the IRS makes.
From the web site US Tax Code online: "The complete Internal Revenue Code is more than 24 megabytes in length, and contains more than 3.4 million words; printed 60 lines to the page, it would fill more than 7500 letter-size pages. Looking for something buried in that mass of verbiage can be daunting." This is ridiculous. How is anybody, other than an attorney or tax expert, supposed to be able to negotiate that maze? We need a change, and we need it now. For some time now I have advocated scrapping the entire U.S. Federal tax code and replacing it with a national sales tax. Think of it. Not only could we get rid of this daunting morass of legalese and bureaucrat speak, but we could replace it with what would surely be one of the most fair taxes around. No need for tax preparers. No need for tax attorneys. Everyone would pay into the system, commensurate with what they spend, meaning the rich would pay more than the poor, but all would feel as if they were contributing.
A national sales tax would be easy to collect and easy to police. We wouldn't need the thousands upon thousands of IRS agents looking into everything we do to make sure we are complying with line 2, item 27 in sub paragraph 112. We'd have to do some rough numbers, but I'm calculating somewhere in the neighborhood of a 20% national sales tax would get the job done. We would eliminate all deductions as well, and April 15th would no longer be the day your taxes were due. You would pay your taxes as you consume. Yes, there would be no mortgage deduction. But there would be no income tax either. Everything would be taxed under my plan, but only to the extent that the revenues required to operate the government efficiently and pay down our debt were collected. You'd pay the national sales tax on everything from a stick of gum to your car to your house. Corporations would pay on what they buy as well. The machines they use, any supplies, anything they buy, would be subject to the tax. Of course, this idea goes hand in hand with balancing the budget and eliminating the deficit. While eliminating the deficit is the priority, tax reform must happen as well. You've read about my plan to balance the budget. Well, in some areas we could save more than the percentage I recommend, which would allow us to not cut as much in others, as long as the overall spending cut totals were met. In this vein, and with this idea, the IRS could be reduced in size by 80 or 90%, allowing us to divert some of those cuts into savings elsewhere. I've also written that I think we need to get rid of the plan known as "Obamacare." As part of that plan, thousands of IRS agents are being hired to enforce the punitive taxes in that plan and the mandate which goes with it. I hate to stop any kind of job creation, but this is one place job creation should be not only stopped, but reversed. As I've said before, if we balance the budget, there will be a renaissance in investment and the economy will start to flourish. Then we can absorb all those IRS workers. The IRS will be out of your life, April 15th will no longer carry such a stigma, and we can get on with moving this country forward. Maybe we could turn the building into a giant mall or something which would generate revenue instead of sucking it up.
Tuesday, July 12, 2011
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Good work, Mr. Grady.
ReplyDeleteI hope you'll consider the FairTax (FairTax.org) as your tax reform solution however.
There are numerous benefits, but here are some of my favorites:
You get to keep your whole paycheck.
No more Internal Revenue Service (IRS), no tax forms or returns. April 15th would be just another nice Spring day.
Will bring back jobs/investment to the USA because the USA will be the best place in the world to have a company.
It would jumpstart the stock market. Trillions of dollars now held offshore to avoid corporate taxes would come flying back into the USA.
It doesn't solve the immigration problem in the USA, but it would at least make all those who are here illegally pay for the services they use, and because they would not receive the FairTax prebate, they would actually be double taxed.
The federal government would pick up billions in taxes they aren't getting now from all the tourists, drug dealers, and other "underground economy."
Transparency. Everyone would know exactly what they're paying for taxes (it will be right on the receipt), so we'd demand that our government make better choices with our money and not waste it. Currently, it's taken out of our checks before we even see the money--which is by design--so everyone doesn't revolt (imagine if once a year you just paid your whole tax bill like they used to before they changed to taking it out of your check).
Thanks for you input. This is exactly what a national sales tax would do, and I would use the savings from reducing the size of the IRS about 90% to offset cuts in other areas per my deficit elimination plan.
ReplyDeleteAs a tax professional I applaud your desire to kill the Tax Code. For 30 years I have told everyone that we need to pay Federal taxes with every purchase and forget the income tax. I believe your 20% number is very high. Once we have the underground economy paying taxes I believe a rate of 9-10% would provide more revenue than even our congress can spend.
ReplyDeleteI'm not sure we could ever provide more revenue than our Congress could spend. (Smile) However, you may be right on the percentages--I said we'd have to work out the numbers--but it just makes sense to me to have a system which would be really easy to collect and which would make everyone contribute.
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