Hoping for a less taxing April in the future
Appeal Internet editor
April should be a good month. The temperatures are rising, the flowers are blooming, and fishing season opens.
But then, there is the 15th. Why do they ruin a perfectly good month by sticking income tax day in the middle of it?
I’ve heard suggestions that we should move tax day to just before the November elections, so that people can take out their wrath at the ballot box. That’s not a bad idea, but I’m not sure it will solve the basic problems.
I’m not going to quibble too much with the amount of taxes I pay. All in all, it’s a pretty good investment in this country, compared to all other nations. Our taxes have helped create a place where seemingly everyone in the world wants to be. I certainly have disagreements on how those taxes are spent, but not so many that I would not pay them.
My complaint, which is pretty widespread, is that the whole system of tax calculation and collection sucks. Why is it so hard to find out how much you owe in taxes? Even with my handy-dandy computer tax program, I’m not entirely sure if I’m figuring my taxes correctly or committing a felony. It’s tyranny by complication.
Think of the hundreds of millions, perhaps billions, of man hours that are spent just figuring up how much money we owe Uncle Sam. And then think about the money spent collecting all those taxes and processing all those tax forms.
This is a tremendous waste of resources. All of this bureaucratic effort produces nothing of value for this nation. Nothing, nada, zilch. These are resources that could be spent a million other ways – feeding our children, rebuilding our infrastructure, protecting the nation.
It’s time for a tax revolt in this country, a bipartisan rebellion against the system. Let’s take all those tax forms and law books and make a giant bonfire out of them, and then start over.
There are many reasons why this hasn’t happened already. One is that both the left and right are stuck trying to pull the system their way. Both sides want change, but neither side wants to compromise.
And of course, you have the laundry list of special interests who have paid big money to get their pet projects enshrined in the tax code.
Well, it’s time to force their hand.
First off, we just need to simplify the system, balancing between the ideological extremes. Let’s try this one on. First, for individuals, get rid of almost all deductions, credits, whatever. Whatever money you make, you just take out a percentage and that’s your tax, period. The only one I would keep is the mortgage interest deduction, and that’s only because getting rid of it could act as the needle that pops the real estate bubble that has been building for several years.
To make up for the loss of deductions, we lower the tax rates, and cut down on the brackets. I think three brackets makes more sense than what we have now. Set the bottom bracket at 5 percent and make it apply to everybody at the lower end of the economic scale who had at least, say, $1,000 in income. As I made a case for in an earlier column, even the poor should pay some taxes.
We could make the middle class bracket at about 15 percent, and the upper class at a flat 25 percent. The income levels of the brackets and the percentages can be adjusted as needed, but you get the picture. It needs to be simple, easy for everyone to understand. If I know that I am paid X amount of dollars per year, I can also figure out exactly how much in taxes I will have to pay.
As for businesses and corporations, we could simplify their taxes, too. I’m sure all those expenditures on accountants and tax lawyers could go to some better use.
Figuring up taxes for businesses is a little harder than for individuals, because there are so many tricks that can be employed to hide profits.
So the best and easiest way would be to impose a flat 1 percent tax on gross income. After all, individuals have to pay taxes based on gross income. Why not businesses? A flat tax like this would ensure that every business pays its share. And it would wipe out a lot of the corruption in Washington, once you get rid of all the special interest deductions and credits.
A system like this would lead to some people paying more, and some less. But at least you could easily figure out in your head how much you pay.
And it’s fair. All individuals and all businesses pay taxes, period. We all benefit from living in this country, and we all owe the country for that gift. And all those resources wasted by today’s tax system could be used to make the country even better.
• Kirk Caraway is Internet editor of the Nevada Appeal. Write to him at firstname.lastname@example.org.