Georgia Voices: April 15 came and went, but tax reform is overdue
by The Gainesville Times
April 24, 2014 12:00 AM | 4547 views | 9 9 comments | 13 13 recommendations | email to a friend | print
Tuesday (was) tax day.

The marvels of electronic filing may have lessened somewhat the demand for postal locations with employees on hand to make sure late mailers get their envelopes date- stamped before midnight, but there still will be many laboring to the last minute to make sure returns are on their way to the IRS in order to avoid a penalty.

While April 15 is the filing deadline, the typical taxpayer will not have yet earned enough money in 2014 to pay his tax bill. “Tax freedom day” — the date recognized each year as the point at which a typical worker will have earned enough to pay all taxes — is set at April 21 this year, three days later than last year.

That means most of us work nearly a third of a year just to meet our obligation to the taxman.

According to numbers compiled by Paul Ryan, chairman of the U.S. House Budget Committee, the cost of complying with the demands of the nation’s tax code is more than $160 billion a year.

That’s not the cost of the taxes paid, but rather the cost of all those things that go into compiling and filing annual returns.

Beyond the financial cost, the process is estimated by Ryan to take some 6 billion hours of work each year.

Imagine the problems we could solve as a nation with an extra $160 billion a year and 6 billion hours of time.

Two of the most frequently discussed options for changing how the nation collects taxes are the “flat tax” and the “fair tax.”

The flat tax would take much of the mystery out of the tax code by having taxpayers pay a certain percentage of their income no matter what; the fair tax would generate revenue based on spending for consumer goods rather than income earned.

Both have been the topics of debate and study for many years, yet neither has gained the sort of momentum necessary to move to the forefront as the sort of sweeping tax reform around which the nation will rally.

For most Americans, the issue isn’t whether we will be taxed, but rather how much, and what will be done with our tax dollars.

Forced by economic conditions to be frugal in our personal lives, we have trouble accepting government entities that sometimes don’t seem particularly concerned with how they spend the hard-earned dollars we send them.

Reform is overdue and desperately needed.

Comments
(9)
Comments-icon Post a Comment
Fred Walker
|
April 24, 2014
HR:25 The Fair Tax Bill calls for the repeal of the 16th Amendment to the United States Constitution. It is the only Income Tax related Bill before Congress that requires repealing the 16th Amendment. This is the one action that would never be proposed by ether political party! The Income Tax is the root of there power to steal from the Citizens with out regard to its effects. Passing HR:25 will restore power to the Citizens and take power away from the two controlling political parties. It will repeal the error our grandparents and parents made. That error allowed unequal taxation of U.S. Citizens. Before the 16th Amendment Income Taxes were Unconstitutional.

Under the original wording of the Constitutions Article 1 Section 8 “ The Congress shall have Power To lay and collect Taxes,

Duties, Imposts and Excises, to pay the Debts and provide

for the common Defence and general Welfare of the United

States; but all Duties, Imposts and Excises shall be uniform

throughout the United States;”

Federal Taxes had to be equal for every Citizen. Passage of the 16th Amendment allowed the Democratic and Republican Parties to take control from the Citizens and consolidate power within the Federal Government. This was done by fooling the Citizens using the class warfare system that continues to destroy our Nation today.

There will be no Federal Tax Reform until the 16th Amendment is repealed. The House Ways & Means Committee has failed to send HR:25 The Fair Tax Bill to the House Floor. Millions of Citizens have demanded They release the Bill to the House floor. We now have another option, The Convention of States Project is progressing rapidly. Please go to www.conventionofstates.com. We will raign in the power of the Federal Government one way or the other! The tyranny and abuse of the IRS and Our out of control Congress must end!
Stephen Eldridge
|
April 25, 2014
Deceptive Fred tells redaers that the FT "requires" the repeal of the 16th Amend. It does NOt and CANNOT. It laughably tries to encoourage repeal via its Sunset Clause in which it purports to selof-destruct in 7 years if the 16th is not repealed, but recall the Sherrif in Blazing Saddles who held a gun to his head and threatened to shoots - he later says, "Boy, are they STUPID!"

Walker continues with his extensive propoganda-dumps that are not worth countering.
Jim Bennett
|
April 24, 2014
The flat tax, including the tithe advocated by Mr. Eldridge, has the inherent flaw that it won't stay flat for two principle reasons. First, there will always be uncertainty and disputes over the identity of the tax base. Second, the same uncertainty and disputes will always exist over the timing of the taxable event.

The FairTax(R) is the only tax, existing or proposed, that addresses all four criteria of sound tax policy: transparency, efficiency, conduciveness to economic growth, and fairness. The FairTax(R) tax also addresses two bonus criteria: neutrality and respect for citizen privacy.

FairTax(R) Lite preserves the same tax base for Social Security and Medicare, which are insolvent. FairTax(R) lite also fails to take into account the inter-generational child abuse that is about to happen when today's youth entering the workforce pay into our Social Security, but none will be available to them.
Hank Van Gieson
|
April 25, 2014
Jim,

How is the Fairtax scheme fair when it throws middle class seniors under the bus? How is it transparent when 20% of the tax base comes from taxation of government consumption? Where does the added government expense come from, Jim? Do you know that the effective sales tax rate will be close to 60%, not the 30% you advertise?

The only child abuse I can find is when supposedly professionals such as yourself tell the younger generation that their Social Security won't be there when they retire. Nonsense, Jim, the worst case is that only 75-80% will be available if nothing is done to fix the system now. And, once the baby boomers have passed through the system, we will be faced with surpluses again.
Stephen Eldride
|
April 25, 2014
Mr. Bennett declares himself the SEER of the future - he decalsre my Flat Tax WON'T stay Flat.

He then goes on to state 2 reasons why it won't stay flat - but that have NOTHING to do with the Flat rate. he questions the "identity" of the tax base (presumably he means what items are taxable, rather than which people) - this is easily solved by simplification of the items if taxable income.

His 2nd reason is timing issue - this is also easily solved by wrriting very simple rules on the timing of a simpler set of income items.

Neither of Bennett's reasons have anything to do with the Flat tax staying Flat. Moreover, Bennett does not address his beloved FT staying simple either.

Bennett offer standard FT propaganda. The FT is not at all transparent - there are several significant hidden taxes. FT may be less efficient than my Flat tax. FT will NOT improve the economy,IMHO. My Flat tax is much fairer than his FT.

My Flat Tax is revenue neutral - his Ft is NOT!

My Flat tax has far more respect for privacy that his FT.

Bennett's passion for preserving SS/Medi is consistent with the FT's Progressive aims. Those 2 programs should be privatized entirely over time.
Hank Van Gieson
|
April 24, 2014
Neither the Fairtax or the flat tax endorsed by Mr Eldridge are suitable tax reform schemes. The Fairtax rate, advertised as 23%, is closer to 60%, and that won't pass muster. The flat tax as proposed would never pass Congress due to it's impact on the poor, plus it retains the IRS at a time when the IRS has little or no public support.

If we really want to get rid of the IRS and the income tax, consider Fairtax-Lite, a 14% broad based, national consumption tax which would be a revenue neutral replacement for just the corporate and individual income tax with no government taxation, no prebate, no inventory tax credits, and retains the payroll tax plus the death tax.

Stay tuned for more details!
Stephen Eldridge
|
April 24, 2014
Why do you insist on leaving in the Estate & Gift Tax - it produces peanuts, but has a significant negative effect on the growth of small business (and it is pure Socialist wealth redistribution)?

people are geting pretty fed up on how much we coddle the poor. Even Dr. Ben Carson is popularizing my Flat Tax with NO exemptions for the poor.

Despite your wishes, there will always be some "IRS", IMHO.

Your plan leaves us with combined retail sales taxes of say 20%-25%, which is still outrageously high for this country - evasion will take a large toll on revenues.
Hank Van Gieson
|
April 25, 2014
Stephen, I left the estate/gift tax in in order to head off the current criticism that the Fairtax favors the rich. I don't much care either way because as you point out, it doesn't amount to much.

If the combined rate for FT-Lite could be 20-25%, then the combined rate for your 10% flat tax would be 35-40%! I don't think you are really serious about your "no exemption" flat tax, Ben Carson notwithstanding? According to WIKI sources, in 2007 family income was $7.723 trillion, and that includes wages/salaries, unemployment insurance, disability payments, child support payments, rental receipts, personal business income, and investment income. After escalating the 2007 number to 2014 based on population growth, your taxable base would be $8.11T and you would raise $811 billion in revenue which would be exactly half of the $1623B revenue raised in 2013 from individual and corporate income taxes. Your 10% is really 20%, and when FICA and State/Local taxes are added, it comes to 35-40% or higher. Please tell us just how you justify calling your 10% flat tax revenue neutral?
Stephen Eldridge
|
April 24, 2014
The “Fair Tax” is a Fraud – we need a 10% “Tithe” Tax!

I am a retired lifetime tax consulting professional (JD, LLM in Taxation, CPA, co-author of a 3 volume tax treatise, lecturer), with no financial stake in ANY tax system. This only a brief summary - for supporting details of all comments, call Stephen C. Eldridge tel. 423-532-7337.

The so-called “Fair Tax” (“FT”) is a fraud – it is MORE WEALTH REDISTRIBUTION, AND a financial SCAM.



In their own words, FT proudly advertises that it is MORE PROGRESSIVE (yes, it is MORE WELFARE).

Of prime importance, the Prebate is NOT a real refund of FT paid as it appears to be. It is a new $600B ENTITLEMENT, which would have ALL Americans receiving a substantial monthly check from the federal govt – a very bad idea for those of us who are not Socialists. We simply cannot afford yet another huge entitlement that will only be increased in the future.

The FT and the Prebate would leave the working poor making no contribution at all to funding the federal budget and paying nothing even for their personal SS/Medi benefits. The FT and the Prebate FT then extend tax welfare to the non-working poor – and also take the next Progressive Cloward-Piven step towards giving SS/Medi to all regardless of work, by removing the tax “penalty” for reporting SS Wages, thereby “inviting” the fraudulent reporting of SS Wages.

The Prebate is apparently calculated to merely repay the poor for any FT they pay, but actually would pay them far MORE than any FT they might pay (by “assuming” the poor spend MORE than the underlying HHS Poverty Guidelines and also by “assuming” they will pay FT on ALL of their purchases, but they WON’T) - and FT also provides free SS/Medi to the working (and some non-working) poor.

The FT produces a 40-70% in-your-face retail sales tax that would spark a taxpayer rebellion that would destroy our retail-sales-sensitive economy. 40% = 30% (not 23%) FT e.g., 10% S/L sales tax and 70% is the rate needed at a sample 30% FT evasion rate (the FT incredibly assumes ZERO evasion and ZERO intentional reduction in spending and ZERO migration from new to used goods).

IN ADDITION to that 40-70% tax, the FT contains several HIDDEN TAXES. 1) FT’s 30% rate is really 42 %; the 12 % is hidden by having fed S/L govts paying FT (which is likely unconstitutional) – ultimately, they must get that money from you. 2) The initial 30% rate is 1-5% short and that plus any other revenue shortfall will have to be made up by raising more FT (or a NEW Income Tax), 3) The fed budget will rise for a) higher SS benefits and higher COLA’s payable to all federal retirees, both induced by FT’s price increase of nearly 30%, and for b) fraudulent new SS benefits invited by FT’s removal of the “tax penalty” for reporting SS Wages, – more FT (or a NEW Income Tax) we be required to fund these.

The NEW IRS (i.e., the STAA) may well be far worse, far more invasive than today’s IRS (the buyer is liable to pay FT and get/show a receipt – The STAA may audit consumers) – also we may well have to file an “Annual FT Summary”.

We may well wind up with BOTH a NEW Income Tax AND the FT, when Congress repeals the FT’s Sunset Clause and enact a NEW Income Tax .

Seniors will start to pay for SS/Medi again and some will pay a 2nd-3rd tax on their earnings. Many middle class seniors will pay more FT than they would have paid in Income Tax and many will lose purchasing power because of 1) the nearly 30% price increases and 2) the higher S/L & federal taxes required because they must pay FT and can only get the funds from us, and 3) higher federal taxes due to higher SS & pension COLA’s and fraudulent SS benefits.

The FT promises grand economic benefits which are all UNPREDICTABLE - mere Hype & Change.

What we need is a Flat Income Tax with No Deductions, No Exemptions, No Credits and a 10% rate, with business income taxed to shareholders on a very simple basis (i.e., no corporate income tax) - See H.R. 1040 (which has been included in Paul Ryan’s new budget), but with changes as noted here (IRS is neutered, 1 page tax filing, everyone pays - more evolutionary). Call your representatives in Congress and let them know that this is what you want.

*We welcome your comments on the stories and issues of the day and seek to provide a forum for the community to voice opinions. All comments are subject to moderator approval before being made visible on the website but are not edited. The use of profanity, obscene and vulgar language, hate speech, and racial slurs is strictly prohibited. Advertisements, promotions, spam, and links to outside websites will also be rejected. Please read our terms of service for full guides