Death and taxes. Benjamin Franklin told us that these are the only two certainties in life. Taxes may be a certainty, but paying taxes doesn’t need to be nearly as complex and difficult as it is today.
I believe that we need a tax code that is simple, fair and promotes economic growth. Right now, our tax code does none of those things. With over 54,000 pages and 2.8 million words in our tax code, there is a lot of confusion. I believe that we need fewer rules, loopholes and alternative minimums. We shouldn’t have different rules for different groups.
The best way to reform the tax code is to rip up the current one and start over with a blank piece of paper. There is no shortage of ideas on how to create a better code. Currently, there are bills in Congress for a Fair Tax and a Flat Tax. These, among others, are the type of bold actions worth considering as we work to simplify the tax code.
The fair tax would effectively eliminate the need for the IRS. There would no longer be a federal income tax or taxes on social security, capital gains, gifts or the much maligned alternative minimum tax. Instead taxpayers would be charged a single rate on new goods when they are purchased.
For example, if the tax rate were twenty percent, then any purchase at the store would include a federal tax of twenty percent. Your paycheck would no longer have taxes deducted from it by the federal government. April 15th would become just another day as the yearly ritual of trying to get your taxes filed on time would end.
While we need a robust debate on the best way to reform the tax code, one thing is clear – almost no one thinks that what we have now makes sense. It is time to create a tax code that is simple, fair and encourages economic growth.
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