13 April 2005 >>
As someone who has to file and pay taxes quarterly—gotta love working on 1099—I think this is a great idea. Deroy Murdock
explains tax choice:
President Bush’s bipartisan tax reform commission should endorse a powerfully simple idea that would ease the pain of many taxpayers: Let Americans choose between today’s tax system and a 19 percent flat tax.
For now, Americans contend with a federal tax code that has grown luxuriant after 10 years of Republican congressional dominance. As Cato Institute tax analyst Chris Edwards reports, federal tax rules that filled 40,500 pages in 1995 stretch to 60,044 pages today. A decade ago, 50 percent of Americans hired tax professionals, versus at least 62 percent now.
Last year, Americans spent 6.5 billion hours wading through the 529 different tax forms the IRS scrutinizes. Completing the standard 1040 tax return and Schedules A, B, and D required 21.2 hours on average in 1995, compared to 28.5 hours in 2004; painting Uncle Sam a numerical portrait of one’s finances typically requires more than 3.5 work shifts. Add this temporal insult to the economic injury of sending the Treasury money.
Tax compliance will cost U.S. individuals, businesses, and non-profits at least $223.7 billion this year, the Tax Foundation estimates. Every dime of this fortune could be employed more productively in the stock market or any home loan agency. Economists call this “deadweight loss.” Regular folks call this “cash down the toilet.”
As is the case whenever citizens want greater freedom from government, there will be many large, powerful interests opposed to it. Convoluted tax laws ensure a continual boom in the tax preparation industry, and the government has a huge bureaucracy built up around the maintaining the tax code. Any simplification would result in drastically less income for professional tax preparers and lost jobs for the IRS employees who implement and enforce the laws. Naturally, these folks will fight vigorously against tax simplification. I just hope the rest of us—we who sacrifice hard-earned money and countless hours contending with this incomprehensible mess—can make our voices heard by the politicians who have the power to clean it up.
