2008 Woodie Awards
Tax Code: A Toad Give it a K.I.S.S.
A simple solution that is the easiest way to pay taxes.
Brian Dean
Issue date: 11/16/05 Section: Opinion
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Taxes. If you don't despise them or detest them, you probably loathe them. But they keep the government operating and must be paid according to the fairest method possible. On Nov. 1, a panel of experts appointed by President Bush presented its recommendations for tax reform to the Treasury Department. Charged with simplifying the tax code while maintaining revenue and promoting economic growth, the President's Advisory Panel on Federal Tax Reform could have offered bold solutions like a flat tax or national sales tax. Instead, it has so far produced stale, humdrum results.
The current system of income tax is much too cumbersome and intimidating. The wrath of the IRS looms should any detail of the bewildering claim forms be filed incorrectly. At 54,846 pages as of 2003, double the size from 1984, the tax code is a frighteningly complex web of credits, deductions and exemptions, each with its own set of qualifications.
Only a few of the proposals included in the panel's report could be considered groundbreaking. For example, they suggest eliminating the federal deduction of state and local taxes. In other words, taxes paid at the state and local level could no longer be used to reduce one's federal tax burden. It's a smart idea that would smooth out the inequality created when each state taxes its citizens differently. And it would certainly eliminate a few lines from the tax code, but there just aren't enough strong ideas similar to it.
Most of the proposals make small changes to existing tax law. These changes may have a large impact on certain groups of taxpayers, but they fail in the effort toward simplicity. Reducing the number of tax brackets from six to four maintains the idea that tax rates should vary according to income. Trimming investment taxes and the homeowners' tax break preserves these rules directed at specific groups.
One method of easing the complexity of the current system is to eliminate it entirely. A national sales tax could be substituted for income tax, Social Security and Medicare payroll deductions. At rates estimated between 20 and 25 percent, it could generate as much revenue as the current system while doing away with many loopholes and tax shelters.
The current system of income tax is much too cumbersome and intimidating. The wrath of the IRS looms should any detail of the bewildering claim forms be filed incorrectly. At 54,846 pages as of 2003, double the size from 1984, the tax code is a frighteningly complex web of credits, deductions and exemptions, each with its own set of qualifications.
Only a few of the proposals included in the panel's report could be considered groundbreaking. For example, they suggest eliminating the federal deduction of state and local taxes. In other words, taxes paid at the state and local level could no longer be used to reduce one's federal tax burden. It's a smart idea that would smooth out the inequality created when each state taxes its citizens differently. And it would certainly eliminate a few lines from the tax code, but there just aren't enough strong ideas similar to it.
Most of the proposals make small changes to existing tax law. These changes may have a large impact on certain groups of taxpayers, but they fail in the effort toward simplicity. Reducing the number of tax brackets from six to four maintains the idea that tax rates should vary according to income. Trimming investment taxes and the homeowners' tax break preserves these rules directed at specific groups.
One method of easing the complexity of the current system is to eliminate it entirely. A national sales tax could be substituted for income tax, Social Security and Medicare payroll deductions. At rates estimated between 20 and 25 percent, it could generate as much revenue as the current system while doing away with many loopholes and tax shelters.
