As many intelligent old people have said, there are two things that are certain in life, death and taxes. Only one of which we can do something about. Our tax code is, to put it bluntly, a disaster. It has created a massive bureaucracy, makes life unnecessarily difficult for all Americans every year, and creates a system of wealth transfer in many different directions. It moves money from the wealthiest to the poorest, yet at the same time moves money from the middle class to the wealthiest. It’s a system that is broken, plan and simple. Fix. The. Tax code.
Yet nothing is ever done by our elected representatives to fix it, in fact they only make it worse. One reason might be because it’s never politically expedient to do the right thing with election season virtually ever-present. Another reason may be due to the fact that many who help fund their campaigns are the very same beneficiaries from the messy tax code. Those with enough money to hire lobbyists typically do so because it is economically prudent for them. They make money from it, or at the very least save money.
But who isn’t trying to save money? We all think we are being robbed by the government while everyone else gets off scot-free, but that isn’t necessarily the case. We all pay for the privilege of living in this country. The problem is that some pay more, while others pay less and in reality there are great inequities in the system. These inequities are present because of the complexity of the tax code. So doesn’t it make sense to simplify it?
YES. So why is it important to simplify the tax code? For starters, we could eliminate a large point of contention between the two major parties. No more bickering about “tax cuts for the wealthy” or “handouts for the poor”, it would finally begin to level the tax playing field. We would also save some money through a reduced IRS task force, no need for close to 100,000 agents. Of course, it may also help to reduce the size and scope of the government in general. There are many wasteful aspects of the government that would be eliminated if a reduction of income were to occur.
Of course, getting congress to act is the first big task at hand. I would think that the lure of reducing tax loopholes exploited by the wealthy would assuage democrats and the appeal of everyone having some “skin in the game” would attract Republicans. While I would like to see large sweeping changes made, I understand change is scary and never well received. So smaller changes would need to be implemented on both sides of the field. Some tax breaks are removed for the wealthy and some benefits are removed for those in the lower brackets as well. Ultimately our goal is to move to a basic income/negative income tax (NIT) or a fair or flat tax system. Currently, I prefer the NIT(another topic, for another day).
If I could really hold sway over congress, I would get them to do it all in one fail swoop, rip the band-aid off and don’t take your time. Move straight to a NIT. If the proper planning took place it could help alleviate some of the pain, but like everything in life, there is no free lunch.