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OP/ED: Bad Tax or Fair Tax, Flat Tax?


April 26, 2009 (Chattanooga Times/Free Press, Tenn.) When you filed your federal income tax forms by last April 15, did you have an easy time doing it?



Or did you have to pay some professional to fill out the forms for you, in addition to paying the tax?

Did you feel your tax obligation was fair -- and that the tax law is fair to all Americans?

Such questions long have bothered American taxpayers because the rates vary, the deductions and exclusions vary, the law is very complex -- and even Internal Revenue Service officials often don't agree about what the law and the accompanying regulations require.

Do you believe the tax code is too complex, and there should be some better, simpler, fairer way to tax, even to collect the same amount of money for government?

Several members of Congress have estimated widely differing numbers of words and pages in the federal tax law and accompanying regulations, indicating that no one really knows for sure all that is involved. So just imagine the plight of poor taxpayers trying to comply with the law and the regulations that no one fully understands!

U.S. Rep. Jo Anne Emerson, R-Mo., for one example, said: "The Bible, the guide of our lives, is 1,291 pages and contains 774,746 words. But the Tax Code and its regulations, which are referred to by some as 'a person's worst nightmare come true,' is 9,471 pages and over 7 million words."

Well, you get the idea.

Are the federal income tax law and regulations really efficient, sound, reasonable and fair? Couldn't there be something much better?

President Barack Obama recently said: "We need to simplify a monstrous tax code that is far too complicated for most Americans to understand but just complicated enough for the insiders to know how to game the system."

But unfortunately, there is greater prospect for further tax complications and some higher taxes than for tax simplicity to be adopted.

We have to pay taxes. But wouldn't it be good for taxpayers and our country to adopt a better system -- for example, either the "Fair Tax" or the "Flat Tax"? What are they?

"Fair Tax"
The Fair Tax proposal would abolish all federal personal and corporate income taxes, gift taxes, estate taxes, capital gains taxes, alternative minimum taxes, Social Security taxes, Medicare taxes and self-employment taxes.

It would replace them with one, simple, visible retail sales tax administered by existing state tax authorities.

It would tax Americans only on what they choose to spend, not on what they earn. It would abolish the Internal Revenue Service.

What are the objections? The suggested 23 percent federal sales tax, opponents claim, would have to be 30 percent. They say it would also be unenforceable. Critics say it would shift the burden to lower income earners from "the rich."

"Flat Tax"
The Flat Tax proposal also would eliminate all current federal taxes. It would provide a basic $36,800 exemption for a family of four, then tax all the rest of a family's income at a flat 17 percent, with no complicated deductions or exemptions.

An annual tax return could be filed on a form the size of a post card!

Advocates point to simplicity, a more than half-trillion-dollar saving in filing costs, and a reduction in compliance evasion.

Opponents point to no deductions, such as for Social Security, health care, etc.

No tax plan is perfect. But the bad one we now have has far more imperfections than either the easily understandable Fair Tax or the Flat Tax.

Unfortunately, Congress is not about to consider any fairer, more transparent, more efficient or simpler plan -- unless a vast majority of taxpayers, both Democrats and Republicans, demand it.

What would you like for your representative and senators to do?

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