Almost everything about the way we do taxes in this country is wrong. Taking for granted that it’s beneficial for our society to force people to pay money for collective services, the way we pay for those services can, and should, be done much better than it is now.
I don’t claim to have any answers to this issue, but I aim to point out a few problems in our current system and to encourage others to think outside of the box about ways that we — as a society — can make taxation more efficient.
First off, you shouldn’t need to hire someone to do your taxes. You shouldn’t need a college — or even high school — degree to do your taxes. Taxes should be simple and transparent. There shouldn’t be things like the alternative minimum tax that force more and more people into paying a higher rate as time progresses. There shouldn’t be special-interest loopholes.
You shouldn’t need to fill out a ton of forms, and there shouldn’t be a massive bureaucracy created to process and read these forms to make sure they’re done correctly. Everyone should be able to understand exactly what they’re paying in taxes and why they’re paying that rate.
Additionally, the government currently collects money in numerous ways, including the corporate tax, income tax, and excise taxes, among others. The government should have only one or two ways to collect revenue in order to be simple and transparent so that everyone knows exactly why and how their money is taken from them.
On that note, taxing a person’s income and effectively taxing production is not beneficial for society, and is therefore not the way in which the government should collect taxes. Every economist will tell you that when you tax something or make it more expensive, there is less of it produced. We should never discourage production in any way; production is the most important thing that our economy does. The sign of a healthy economy is a growing gross domestic product (GDP) with lots of money in motion. Taxing production stops that from happening.
I’m obviously not the first person who has thought about this, and many people have proposed alternatives.
My favorite is the FairTax. This system taxes consumption instead of production, collects revenue one way, and is ridiculously simple.
The FairTax eliminates all current taxes and instead levies a 23 percent sales tax, according to fairtax.org. Then, at the beginning of each month, every American household gets a check in the mail for the amount of taxes they would pay up to the poverty line. So if you make the poverty line, you pay no taxes. If you make twice the poverty line, you pay half the 23 percent rate. This keeps the system progressive and fair.
People have proposed optional flat tax rates, taxation of just estates, and all number of revenue-gathering tactics. Newt Gingrich (R-Ga.) campaigned on the idea of being able to fill out your taxes on an index card.
Taxation should be reformed, and we as a country deserve better than what we have now in the realm of taxation.
The original article can be found here.