Is It Time to Scrap the Code?

Capitol Hill This Week:

The House this week will take up two pieces of legislation. The first is H.R. 4700, the “Personal Responsibility, Work, and Family Promotion Act.” H.R. 4700 is a welfare reform bill that re-authorizes programs to provide services to low-income Americans. The House also expects to take up H.R. 3994, the “Afghanistan Freedom Support Act of 2002.”

The Senate continues its marathon discussion of trade using the Andean Trade Bill as a base bill. Now that some compromises have been made on the Trade Adjustment Assistance Act, they could be reaching the end of this debate.

It is Time to Start From Scratch and Help Rep. DeMint Scrap the Code!!!

Did you pay your own taxes this year or did you hire an accountant? IF you wanted to calculate your own taxes this year, could you? If not, don’t feel so bad, nearly 56% percent of Americans had to hire a tax professional to do their taxes. In fact, we spent an estimated $86 billion to have someone else figure out exactly what the government wants from us. While always a pain in the butt, taxes and the tax season that never ends have become absurd. At one time – long, long ago – our tax system actually made some sense. Once a year (April 15th) you pay a certain specified amount to the government for the benefit of having a national defense and a few other services. Somehow this simple system became twisted and bent, abused and perverted. Consider the following:

  • If you include footnotes and instructions our tax code currently runs over 50,000 pages

  • In 2002, individuals, businesses, and non-profits will spend an estimated 5.8 billion hours complying with the federal income tax code with an estimated compliance cost of over $194 billion.

  • The average family today pays more in taxes than it spends on food, clothing, shelter and transportation combined.

    Sound like a prescription for reform to you? It is absolutely incredible that we have allowed our tax code to wrap itself so maliciously into our daily lives. Instead of once a year, people now must consider the effect of taxes on everyday decisions. Want to have a child? What are the tax implications and do you qualify for any credits? Want to get married – can’t afford the increased tax burden! Want to die? That is a taxable event too.

    This system cannot be ‘fixed’ – no amount of cosmetic surgery will make our tax code a fair and honest system that allows citizens to judge whether or not the government is taking a proper amount of their earnings. The only answer is to eliminate the entire system and start over from scratch. Considering how much the American people dislike the current tax code, you would think this would be a simple task. Unfortunately, I think we all suffer from Stockholm syndrome. We have fallen in love with our particular benefits and goodies that have been tucked into the tax code precisely for this reason. What better way to stop someone from wanting to kill this aging giant then by giving every single constituency some small, vested interest in it?

    Besides the ludicrous nature of the current tax code it also leads to dire consequences. For instance, spending has escalated dramatically over the past several years. If you can take more money surreptitiously from a corrupt system at any time, why not run mad with someone else’s money?

    Fortunately, one legislator, Congressman Jim DeMint of South Carolina has the beginning of an answer. His bill, H.R. 4716, the “Date Certain Tax Code Replacement Act” would set a specific date for the sunset of the current tax code. It doesn’t specify any particular remedies or solutions. It simply states the obvious – while we can all agree on three principles for our tax code – it should be 1) fair, 2) low and 3) honest – our tax system is none of those.

    There are plenty of alternative solutions to our current tax code out there. Some potential remedies include: a flat tax, a sales tax, and a value-added tax just to name a few. And we can (and will) have that debate sometime down the road. But for now the important thing is that we understand that the great social expert known as the income tax has failed. Our tax code has become an unwieldy, punitive behemoth that tries to engineer the lives of the American people. Let’s get rid of it and start fresh!

    Action Item:

    Call or email your Member of Congress today. Let them know that you want them to sign on as a co-sponsor to H.R. 2714, the DeMint “Date Certain Tax Code Replacement Act of 2001.”

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