Change The Code.....

Something I have believed for a long time is Income Tax is an immoral tax. Now I am not one who does not pay taxes, or advocates that people don't pay. I am not ready to go to jail for this view, but I do believe that taxing productivity is very wrong. When something is taxed, it discourages the activity that is taxed, therefore it follows that if you tax income, it discourages people from making more money and encourages those who do make lots of money to find ways to avoid paying those taxes.

This is why our tax code is so complicated, the politicians have written in "loopholes" to allow people who make lots of money to legally get out of paying taxes. Consider the following from The Virginia Chapter of the National Retail Sales Tax Alliance:

When the income tax was instituted in 1913 the tax form was four pages long and you would had to have earned more than $300,000 (in 1994 dollars) to be even required to file a return. In 90 years this is what it has come to...

• The average tax burden borne by Americans in 2000 was 33.5%
  In the year 2000, the 1040 form was 70 lines long and had 117 pages of instructions.
  
• Individuals and businesses waste nearly $200 billion a year filing their taxes. We bear this burden through higher prices and lower wages.
  
• The IRS prints some 280 instruction forms to explain how to complete nearly 480 tax returns.
  
• The tax code is so large that each year the IRS mails enough pages of forms and instructions to circle the earth nearly 28 times.
  
• The number of IRS employees has more than doubled in the last 30 years.
  Half of all filers hire someone else to do their taxes.

Now, what we need is a tax code that is simple, fair and does not discourage productivity. One such plan, which has been around a while, is the Flat Tax. The Flat Tax is a good start, but there are problems as I see it, first it is still income tax, which I have already said I believe is immoral. However, it would simplify what we have now, and remove the need for much of the overhead now needed for tax collection, thus lowering the expense of the Federal Government. It would also cut the cost of filing taxes for most people.

The best alternative is a national Sales Tax. Also known as the Fair Tax there are many advantages to the Fair Tax. The biggest one I see is the pressure it would take off every employer, and employee on their budget. The proposal before Congress, as I understand it, is to completely remove all federal level payroll taxes, including Social Security, and replace it with an "embedded" sales tax. The theory is that this will free up money, as we will be able to bring home everything we earn, and since companies will no longer have to pay those payroll taxes, prices will drop, so the new sales tax will not raise prices as the cost of the payroll taxes will be offset. Part of the proposal also allows for a "Prebate" of Sales Tax each month based on your income, to offset those taxes paid on necessities, such as food and clothing, that would be expected for the month. This offsets the effect the tax would have on the poor.

Now a Sales tax is a fair tax, because the consumer decides when to pay it. It would spur the economy and lower prices. It would also abolish the IRS, which by itself convinces me to support the Fair Tax. Contact your Senator, and Congressman to let them know that we need to have a fairer more simple tax code.

FAIR TAX PETITION: http://www.fairtaxvolunteer.org/opinion/elec_petition.html