Tax Day: Time for a Revolution

I’ve had it with the tax code, and I hope you have, too. It is time for a revolution. We need to send our tax code back to Europe like so many taxing Redcoats were two hundred years ago. We need to take the 60,044 pages of tax rules and regulations and dump them into the Boston Harbor like 1773 tea leaves. And we must stop clapping like seals every time the tasty, but rotten, fish of a tax-code complicating tax cut is tossed our way. We need to demand fundamental tax code simplification.

While the recent tax cuts do slightly ease the tax burden, they do nothing beneficial for the tax filing burden. The National Taxpayers Union reports that Americans now spend 6.7 billion hours on tax paperwork, up 1 billion hours from just 10 years ago. To consume this much time to simply pay the government is a disservice and an outrage to the people of our free nation.

And it is unnecessary. No one but accountants, tax lawyers and lobbyists gain from this monolith of special favors posing as law. To the contrary, a law-abiding citizen trying to make sure he has paid his share must now wade through 131 pages of instructions accompanying the standard 1040 form—twice as many pages as in 1985. Reams of further instructions harass those requiring additional forms for committing such atrocities as earning extra income in a side business.

Forming the stacks of rules is a tax code that offends the very basis of American society—the idea that everyone be treated equally before the law. The code segregates Americans into groups that must pay differing parts of their income in taxes. Not only are there vast inequalities between the tax rates people of different incomes face, but also vast inequalities between the tax rates people of the same incomes face. What you pay in taxes depends on whether or not you are a member of one the “separate but equal” groups that are discriminated against by the social engineering that is the tax code.

This chorus line of complaints would be silenced by the fundamental reform embodied in the Flat Tax. With a Flat Tax, taxes could be calculated in minutes—by simply subtracting the only deduction allowed, the personal deduction, from total income, and multiplying by the Flat Tax rate of, say 18 percent. This could be done on a post-card, rather than requiring page after page of schedules and forms. And it would eliminate the segregation that the current code defines.

The cries of class-warriors claiming the rich are getting all the breaks would be silenced as the shroud of tax-code created confusion would be lifted. After taking the personal deduction, everyone would pay the same percent. Of course, if your neighbor makes 10 times as much as you, he’ll pay 10 times more taxes— but it will be the same percent of his income.

This is an idea whose time has come, and its enactment is the tax revolution that we need to make happen. Long championed by the Right in the United States, it has taken hold in the former-communist nations of Latvia, Lithuania, and Estonia. They’ve grown much faster than their former overlord, Russia, leading Russia to enviously adopt a Flat Tax of 13 percent in 2001. The simplicity of the system helped spur Russia’s economic growth, increased tax revenue, and boosted tax compliance—leading Slovakia and Ukraine to adopt similarly simple systems.

This is a Russian revolution we need to bring to the US— a revolution of fundamental tax reform based on American ideals.