Tuesday, June 13, 2017

Why Income Tax Reform Is So Difficult

Ask yourself: Why can’t the income tax be made as simple and compliance easy as paying the federal motor-fuel tax? The motor-fuel tax does not require personal motorist tax returns to be filed to collect the tax, nor are there schedules to file reporting vehicle information, miles driven, and purposes served from one’s trips. Motorists don’t face the IRS every motorist-taxable year. So, why can’t we have an income-tax reform which moves tax collection from the system of person taxation to a system similar to that of the motor-fuel tax not requiring personal motorist tax returns?

By James K. Jeanblanc l June 8, 2017

Most everyone would accept real income-tax reform as having the income tax made simple, compliance-easy, and low-rate. But, this goal remains elusive. Despite the many tax reform acts passed by Congress over the years, the tax mess has continued. And, none of the recently-proposed plans present any picture of real income-tax reform.........The common thought is that we have an income tax in need of reform. Ignored is the reality that the tax system functions as a person-taxing system, not as a true income-tax system......."Don’t tax thee, don’t tax me; tax that other fellow behind the tree.”............

This is a proposal for a true 10% flat tax on all income, including business income. Person taxation would end, along with all of the accompanying personal tax breaks, tax loopholes, income exclusions, and tax exemptions. Income would be made the sole focus of the tax..........Under the FreedomTax, the income tax would be collected at the source of payment on dividend, interest, retirement, and salary income. Most Americans would never have to file a tax return, not even a postcard.

My Take - A lot of interesting points made here, but I don't see this as a good reform.  There should be no income tax at all, then it would be fair across the board.  A national sales tax would also be collected at the source of final purchase - with no exceptions at all - including food or medical care - and that would save untold billions over a short period of time if for no other reason the IRS, as we know it, would disappear as I'm told the income tax deducted from our pay checks only goes to pay for the IRS.  And even if that's not entirely true - the cost to fund the IRS is massive and that would end. And then no Americans really would ever have to file a tax return, not even on a post card. 

No comments:

Post a Comment