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Gifts for all occasions in the Galleria! Subscribe to the "What is the Deal?" mailing list. February 22, 2004 What is the Deal with Income Taxes? By Jan A. Larson I filed my wife's and my federal income tax return last week. Despite using a well-known brand of tax preparation software, I spent several hours on each of three separate occasions gathering information, entering it into the program and checking for completeness and accuracy. Our return is not complicated at least not compared to some in our age bracket. We both received W-2 forms from our employers, we have bank and brokerage accounts that generate taxable income and we paid property taxes on our home, mortgage interest and had some charitable contributions that produce deductions. When I printed our return and the supporting worksheets, I ended up with 65 pages. This is, of course, ridiculous. But even 65 pages of documentation for our tax return pales in comparison with the number of pages in the U. S. tax code. The tax code is overwhelmingly complicated. It is so complicated that tax evasion is common and even conscientious taxpayers often fail to accurately complete their returns. It is estimated that the costs to taxpayers of tax compliance is over $200 billion. One would think there must be a better way for the government to collect taxes. There is a better way. It is called the Fair Tax. The proposed Fair Tax is a national consumption or sales tax. Under the Fair Tax proposal, workers would keep 100% of their paycheck - no more payroll tax or federal withholding. Each person would be taxed when they buy goods or services, much the way state and local sales taxes work today. The Fair Tax website offers some points to consider with respect to the Fair Tax:
The advantages of the Fair Tax are considerable:
This proposal sounds too good to be true. Unfortunately, it is, at least without considerable citizen support for change. Only the most naïve believe that the Internal Revenue Service and the tax code exist solely for the purpose of collecting revenue. The tax code is one of the most useful tools for members of Congress to hand out favors to special interests. The nature of the payroll tax and federal withholding also works in the favor of the tax collectors, not the taxpayers. Most taxpayers are happy to get a refund in April. Many do not fully grasp the magnitude of the amount of money that has been extracted from their earnings throughout the year. Not to be forgotten when considering a rewrite of the tax code are those that directly benefit from the complexity of the current tax code - tax accountants, the entire tax preparation industry and the IRS itself. A lot of people would be adversely affected should the IRS be abolished and tax compliance become automatic. To be sure, these groups would not take tax reform lying down. The U. S. tax code is much like an elephant in one's living room. There are those that realize the elephant eats a lot and creates a mess, but there are others that consider the elephant to be nothing more than a member of the family. Only Congress can change the tax code. It is time they did so - for the good of America and all Americans that suffer under the current oppressive tax system. Write your Representatives and Senators and express your support for the Fair Tax. Visit the Fair Tax website to learn more. -- Send feedback to the author. The "What is the Deal?" column will appears weekly on the Pie of Knowledge website. Guest submissions are welcome and encouraged. To submit an article to "What is the Deal?" click here. To subscribe to the "What is the Deal?" mailing list and receive early notification when a new column is available, click here. The Pie of Knowledge will never, ever divulge email addresses to any third party for any reason unless so ordered by a court of law. Contributions to the Pie of Knowledge are greatly appreciated. 
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