At this time, the Panel is soliciting comments on the following questions:
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Headaches, unnecessary complexity, and burdens that taxpayers - both individuals
and businesses - face because of the existing system.
I think the very nature of the point/question proves that you know that there is
unnecessary complexity in the tax law, as it now stands.
If the law were clear and simple, individuals and business could focus on EARNING rather
than payment.
People spend days or weeks working on paying taxes. It simply should not be so difficult.
Today's tax code has few defenders. It has been said that the current system is a test of
legal brainpower, an accountant's decathlon, a treasure hunt for hidden deductions and
buried tax breaks. Our tax code has become a dense fog of incentives, inducements, and
penalties that distort the most basic economic decisions, constrain the free market, and
make it hard for Americans to run their own lives. The Internal Revenue Service has become
a symbol of what is wrong with American government. We waste over 5.4 billion hours per
year on TRYING to comply with our codes.
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Aspects of the tax system that are unfair
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Our current code is very complex; 20,000 pages of regulations; I.R.S. incorrect over
half of the time. The code is used by lobbyists and the wealthy for tax-breaks and
loopholes; used by bureaucrats for social engineering. The cost of filing is now $225
BILLION annually. The code as written Taxes savings, labor, investment, and productivity
multiple times.
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The current tax code violates the principle of equality. Special rates for special
circumstances violate the original Constitution and are unfair.
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Current tax code places unfair tax burden on U.S. exports and fails to neutralize
tax advantages for imports.
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Current tax code requires massive files, dossiers, audits, and collection activities.
Mass confusion surrounds our tax code.
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Our current tax system drives up the cost of American manufactured goods and
agricultural commodities, to say nothing of its complex, intrusive, inefficient, specialinterest-driven nature. Not only does the current system decrease our competitiveness
overseas, it increases domestic prices for those who can least afford to pay.
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Specific examples of how the tax code distorts important business or personal
decisions.
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A. Keeping track of income and expenses.
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B. Providing sufficient documentation to protect yourself in the event of an IRS
audit.
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C. Allocating expenses between personal and business use.
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D. Finding an accountant you can rely on.
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It is estimated that Americans spend at least $250 billion a year to comply with the
tax code - that's $850 for every man, woman, and child in America. That is the cost of
three Iraq wars. Billions of dollars in compliance costs are wasted each year, and we have
nothing of value to show for this expenditure - not one single productive service or product
is added to our nation's wealth. The codes pushes rates up and is biased against savings and
investment.
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Goals that the Panel should try to achieve as it evaluates the existing tax system
and recommends options for reform.
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Abolish all federal income taxes, including personal, estate, gift, capital gains,
alternative minimum, corporate, Social Security, other payroll, and self-employment taxes,
and replaces them all with one simple, visible, federal retail sales tax.
Thank you for your attention,
Karyn Daniels