Then they expect us to praise them like heroes when they have a so called soulution to THEIR own doings?
Pffffttttt....
Posted on 02/09/2004 6:48:54 AM PST by ancient_geezer
Tax laws grown far too complex By THOMAS C. MORRISON - IR Your Turn - 02/05/04 I have spent more than 40 years working with the federal tax code, first as a tax law student, then as an I.R.S. tax attorney, and then as a tax lawyer in the private sector. As we approach a new tax season, I am compelled to reflect on the obscene complexity of our federal tax code. Over time, most taxpayers have become fatalistically conditioned to accept this hopeless quagmire, watching the federal tax code along with explanatory I.R.S. pamphlets grow not by the number of pages, but by the pound. Neither the tax lawyers, nor the tax professors, nor the CPAs, nor the accountants fully understand the federal tax code. No credible tax professional will tell you otherwise. We muddle through endless complexities, enhanced by exceptions upon more exceptions. How many taxpayers still feel comfortable in preparing their own tax returns? For instance, how many nonprofessionals think they can adequately understand the complexities of at least six different capital gains rates, or of the phase outs for itemized deductions, or of the alternative minimum tax rules or of the applicability of kiddie tax rates (for just a few).
Don't blame the I.R.S. It is stuck trying to figure out what Congress has given them and it is no more omniscient than the rest of us in trying to figure out what all those words mean. Worse yet, the I.R.S. lacks needed resources to administer our overly complex tax laws. Without adequate resources, these laws can not be effectively administered. Without effective administration, revenues are lost and inequity results from lack of uniform enforcement. Congress does need to provide the I.R.S. more resources, but doing so remains self-defeating, as long as more verbal tonnage is added to the tax code.
If Congress cannot get the federal income tax code straightened out and pretty soon, it will die from its own weight, and without regard to the obvious inequity of its likely substitute, an arbitrary flat tax. Perhaps, the only way to achieve true tax simplification is for Congress to pass a new "two for one" tax law, requiring the deletion of two words for each new word added to the tax code. Or even better, why not demand a "common sense" tax law that would require each Congressperson to prepare and file his own tax form without any professional help, and if a senator or representative should make more than three mistakes on his self-prepared 1040, he would have to vote to repeal the law and replace it with a simpler one. What do you think?
Thomas C. Morrison is a Helena lawyer.
Then they expect us to praise them like heroes when they have a so called soulution to THEIR own doings?
Pffffttttt....
when they have a so called soulution to THEIR own doings?
Hate to say it, but the only solutions that mean anything are going to have to come via the legislative process and those same Congress Critters we insist on electing year after year.
The key is making it hot for the ones not willing to make the necessary changes, and doing everything we can to replace those that continue the same old game.
That's what primaries & the caucus is all about. And that is where our greatest leverage lay, the selection of who runs for office. A vote in a primary has a hundred times the weight of a vote in the general election.
Push & support candidates that are willing to make changes.
Isn't it ironic that the former Soviet Union figured out how to develop a simple flat tax that citizens can file on a postcard
Well, not exactly. I don't think we really want what the rest of their tax system looks like:
|
RUSSIA: PART TWO OF THE RUSSIAN FEDERATION TAX CODE August 10, 2000
Alexander Chmelev and Evgeny Astakhov Baker & McKenzie, Moscow Office
Sent by BISNIS, U.S. Department of Commerce, http://www.bisnis.doc.gov Judith_Robinson@ita.doc.gov, Tel: 202-482-2293. BISNIS sends this report as a courtesy to the U.S. business community. This is not to be construed as endorsement or sponsorship of any information or group. On August 5, 2000, Russian Federation President Vladimir Putin signed into law four chapters of Part Two of the Russian Federation Tax Code and Federal Law No. 118-FZ ôOn the Implementation of Part Two of the Russian Federation Tax Code and Amendments to Certain Federal Laws on Taxationö (the "Implementation Law"). The chapters of the Tax Code signed into law by the President are Chapter 21 - VAT, Chapter 22 - Excise Taxes, Chapter 23 - Personal Income Tax, and Chapter 24 - Unified Social Tax. These four Chapters and the Implementation Law were officially published in Rossijskaya Gazeta on August 10, 2000, and, with few exceptions, will become effective on January 1, 2001. The most sweeping changes introduced into the Russian tax system by this new legislation are as follows: 1. VAT (Chapter 21 of the Tax Code) Although Chapter 21 of the Tax Code does not change VAT rates or the general VAT structure, it contains numerous provisions, which will significantly affect most businesses in Russia. Most notably, Chapter 21 substantially modifies the "place of service" rules, which generally determine whether for VAT purposes a particular transaction has occurred in Russia and is, therefore, subject to Russian VAT. Effective from July 1, 2001, Chapter 21 also will treat export sales to CIS countries in the same way as sales to all other foreign countries, and will exempt them from VAT. On the downside, Chapter 21 will repeal a number of long-standing and important VAT exemptions, including an exemption for license fees for the use of intellectual property (such as, patents, copyrights, and trademarks), and will significantly narrow the VAT exemption for pharmaceuticals. 2. Personal Income Tax (Chapter 23 of the Tax Code)
Chapter 23 of the Tax Code will replace the current progressive tax rates ranging from 12% to 30% with a flat tax rate of 13%. This 13% rate will apply to almost all categories of income earned by individuals who are Russian tax resident. A 30% rate will apply to dividends, and to any Russian source income received by individuals who are not Russian tax resident. A 35% rate will apply to income from gambling, lottery prizes, deemed income from low-interest or interest-free loans, certain insurance payments, and excessive bank interest. 3. Unified Social Tax (Chapter 24 of the Tax Code) Chapter 24 of the Tax Code will replace the existing employersÆ contributions to four separate social benefit funds (which currently are imposed at an over-all rate of 38.5%) with one unified social tax. This unified social tax will have a regressive tax scale from 35.6% to 2% of an employee's salary with the lowest rate applicable to the portion of an employeeÆs annual salary in excess of 600,000 Rubles (approximately US$22,000 at the current exchange rate). It should be noted that under the Implementation Law, as a transition rule, the lower rate of this tax will be 5% rather than 2% during 2001. 4. Excise Taxes (Chapter 22 of the Tax Code) As a countermeasure to reducing rates of other federal taxes, Chapter 22 of the Tax Code provides for an increase in excise tax rates for gasoline and other oil products by almost 300%. It also provides for a less dramatic increase of excise tax rates for tobacco products and certain passenger cars. 5. The Implementation Law a. Turnover Taxes Effective from January 1, 2001, the Implementation Law repeals the Housing Fund Tax of 1.5% and reduces the Road Users Tax from 2.5% down to 1% and completely repeals the Road Users Tax effective January 1, 2003. These taxes are imposed on gross sales and have been among the most onerous taxes on business in Russia. b. Regional Tax Concessions The Implementation Law reconfirms the right of regional authorities to provide tax exemptions for the regional portion of federal taxes retroactive to April 1, 1999. This reconfirmation resolves an issue that arose in 1999 as to whether the regional portion of profits taxes could be reduced pursuant to regional incentive laws. c. Profits Tax Rate Apparently in compensation to local budgets for the cancellation of turnover taxes, the Implementation Law authorizes municipal governments to introduce an additional "municipal" profits tax of up to 5% of a taxpayer's taxable profits. Thus the maximum overall profits tax rate may be increased from 30% to 35%. This report is provided courtesy of the Business Information Service for the Newly Independent States (BISNIS) |
Take Clinton's much vaunted college education tax deduction--you get nothing for the first year your kid is in school because of the way the law was written. In subsequent years you get a paltry deduction that hardly makes up for the dependent tax credit you lose when your kid turns 17.
Every year when I do my taxes (by computer program)my blood pressure goes up when I see all the special interest tax credits handed out to various groups, but not accessible to the average Joe.
Texan's in the 5th Congressional district have got a good one to support.
Hensarling stumps in Cherokee County
Republican Congressman Jeb Hensarling was in Jacksonville and Rusk Friday, stumping for the votes he'll need if he's to become Cherokee County's first Dallas-based representative since courts approved the state's controversial redistricting plan.
***"Hensarling also said he has co-sponsored a bill that would "abolish the IRS, and move us to a flat tax or national sales tax."
Here's 43 more worthy of our support NRST co-sponsors
The only way to get this done is to start by scraping the incumbents/liberals/socialists. That would mean just about all of them.
Isn't it time to scrap the progressive income tax and just have a federal consumption
tax and nothing else?
More than past time. The vehicle to do precisely that has been out there since '97.
John Linder in the House & Saxby Chambliss Senate, offer a comprehensive bill to kill all income and payroll taxes outright, and provide a IRS free replacement in the form of a pure consumption tax:
H.R.25
SPONSOR: Rep Linder, John (introduced 01/7/2003)
A bill to promote freedom, fairness, and economic opportunity by repealing the income tax and other taxes, abolishing the Internal Revenue Service, and enacting a national retail sales tax to be administered primarily by the States.S.1493
Sponsor: Sen Chambliss, Saxby [GA] (introduced 7/30/2003)
Title: A bill to promote freedom, fairness, and economic opportunity by repealing the income tax and other taxes, abolishing the Internal Revenue Service, and enacting a national sales tax to be administered primarily by the States.Refer: http://www.fairtax.org
I think it is prime time to push hard on getting more Congress Critters willing to make that change in the the law. Then push for enactment of the above as well as an Amendment to the constitution to expressly prohibit income and payroll taxes forever.
The only way to get this done is to start by scraping the incumbents/liberals/socialists. That would mean just about all of them.
If that's what it takes, then we had better get working on it. Course we have 43 now co-sponsoring the bill that would replace the income & payroll tax systems we know have in place. So that means we only need to replace or change the minds of less the 200 more to assure the job gets done.
That's what primary politics is all about. The time to put out the garbage.
As I see it, a Federal Sales Tax would have exceptions for foods, clothing items to a certain price (I think New York does this already) and medical treatment/supplies.
The "poor" would have exemptions in that the necessities are not taxed at all (should they be modest in their expenditures).
Neither necessary nor desirable. Let's try to keep it simple, and the exception here, execption their mentality out of it. Why should Congress be legislating what our necessities are?
Here is what is in HR25 to address that issue:
All legal residents will receive a FCA equivalent to the FairTax paid on essential goods and services. The FCA will be paid in advance, in equal installments each month. The size of the monthly FCA will be determined by the government's Poverty Level for a particular family size, multiplied by the tax rate.
Every year, the Department of Health and Human Services [HHS] determine the "poverty level" for each family size.
|
The 2001 "FairTax" Family Consumption Allowance Figures |
|||
|
Family Size |
HHS Poverty Level |
Annual FCA |
Monthly FCA |
|
One |
$8,590 |
$1,976 |
$165 |
|
Two |
$17,180 |
$3,951 |
$329 |
|
Three |
$20,200 |
$4,646 |
$387 |
|
Four |
$23,220 |
$5,341 |
$445 |
|
Five |
$26,240 |
$6,035 |
$503 |
|
Six |
$29,260 |
$6,730 |
$561 |
|
Seven |
$32,280 |
$7,424 |
$619 |
|
Eight |
$35,300 |
$8,119 |
$677 |
1) Federal Register: February 16, 2001, Pages 10695-10697).
[ The monthly FCA for each adult is .23 * (HSS poverty level for a single person)/12 to assure no marriage penalty due to the manner in which the poverty level is dependant on family size. The monthly FCA for each child is .23 * (the incremental increase of HSS poverty level for a family with one child over no child) ] A. Geezer
A family of four, for example, could spend $23,220 per year free of tax because they will have received over the course of the year rebates totaling $5,341. $5,341 is the amount of sales tax paid on $23,220 in expenditures. A family spending double the "poverty level" or $46,440 per year will effectively pay tax on only half of their spending and, therefore, have an effective tax rate of 11 ½ percent or half the FairTax rate.
The beauty of the FairTax is that you can control how much you pay in taxes. If you happen to save, invest or spend a portion on used [previously taxed] items, you can get your effective tax rate below 9%.
[71] To illustrate the plan's progressive nature we can examine the tax burden that a family of four will have at various annual income levels (or in this case, annual spending levels).
Not only does every family receive a FCA based on family size, not income, but they will also receive 100% of their paycheck:
Fedup Smith makes $39K per year...once the FairTax is the law of the land he will receive an instant increase in pay of $200.00 per week. Since he has a family of four, he will receive a FCA of $445 per month, for a total of $1,305.00 additional income per month that he can do with as he sees fit
No it won't. Congress likes it the way it is, because...
"Did you really think we want those laws observed?" said Dr. Ferris. "We WANT them to be broken. You'd better get it straight that it's not a bunch of boy scouts you're up against... We're after power and we mean it... There's no way to rule innocent men. The only power any government has is the power to crack down on criminals. Well, when there aren't enough criminals one makes them. One declares so many things to be a crime that it becomes impossible for men to live without breaking laws. Who wants a nation of law-abiding citizens? What's there in that for anyone? But just pass the kind of laws that can neither be observed nor enforced or objectively interpreted -- and you create a nation of law-breakers -- and then you cash in on guilt. Now that's the system Mr. Rearden, that's the game, and once you understand it, you'll be much easier to deal with." -- Ayn Rand, Atlas Shrugged
The tax code is the primary way the political class has of ruling the entrepreneurial class. Without it, Bill Gates would rule America, and the Kerrys and Kennedys would be relegated to sitting on the front porch in Martha's Vineyard, complaining about the weather making their arthritis act up.
The tax code is the primary way the political class has of ruling the entrepreneurial class.
Replace the political class that doesn't get it, got it? One at a time, if that is what it takes then that is what we need to do.
Simply put, investment is not taxed while consumption of new goods and services are taxed. Education is an investment.
What allows the tax to be fair imo is that each person with a SSN can choose to receive a "prebate" of tax that the average person will spend on necessities in the coming month. The effect is to make necessities of life tax-free. IMO they should be. Of course the level of necessity spending differs by family size and by family - but the average is used (avg as determined by HHS annually).
Geez can post the table, if he would be so kind!
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