The Federal Tax Code is a popular tool for members of Congress to bring in more spending money and repay obligations to special interests. The 60,044-page income tax code has been amended and patched so often that it is complex, convoluted, inefficient and unfair.

The tax code includes: depreciation schedules, multiple income tax brackets, complicated deduction rules and an Alternative Minimum Tax. It is so complex and contradictory that the Internal Revenue, itself, has difficulties rendering opinions on certain of its provisions.

The current federal income tax is unfair because of the double taxation of Estates, Social Security income, and dividends. It is undemocratic because it penalizes individuals for their financial prowess. The tax treatment of the wealthy is analogous to making Tiger Woods play a longer golf course than the other competing golf professionals because of his superior skills. The code is costly because of the time and expense required to fill out its complicated forms. Currently, the Alternative Minimum Tax provision, directed at wealthy individuals, detrimentally affects the middle class because it wasn’t indexed for inflation – another example of the unintended consequences of Congressional micromanaging.

America will prosper if it adopts the flat tax judging by the dramatic improvement in the economies of the twelve foreign countries, which switched to the flat tax. The flat tax is the ideal income tax because it simple, fair, progressive, and cost effective. It’s:

• Simple, can be filled on a post card
• Fair because everyone pays the same percentage of their income
• Progressive — the higher the income, the higher the tax
• Cost-effective, eliminates the time and cost of tax preparation

This tax would save millions of dollars by reducing the number of Internal Revenue employees (86,585 in 2006). There are other valuable adjunct benefits to the flat tax. It eliminates double taxation, simplifies tax planning, enhances the economy, increases privacy, improves compliance, and generates more tax revenue.

There will be many vociferous critics of the flat tax. Naturally, the adversely affected individuals, IRS employees, accountants and tax lawyers, will oppose these changes in the present Federal Income Tax Code. Politicians will oppose this tax because it will deprive them of the ability to repay their benefactors. A blatant example of a member of Congress using the tax code, to satisfy a sponsor, is the famous Gallo Wine Amendment. In 1978, Julio and Ernest Gallo helped Senator Alan Cranston win a difficult re-election in California. Cranston returned the favor by getting a tax amendment passed, with few Senators present, on a Saturday that allowed the Gallo family to spread their inheritance payments over several years.

The benefits of the flat tax extend beyond simplicity and fairness. After-tax income will rise. There will be renewed work incentives. The reduction of taxation on investments will shift capital to producing goods and services. This shift will create new businesses and industries with the concomitant increase in employment. Industries will be encouraged to locate in the USA and the shift to off shore jobs will decrease. All of these positive changes will insure the continuous growth of our economy.

The recent tax protests, on April 15th, demonstrate how angry Americans are about being taxed without representation. Protesters call attention to their dissatisfaction and, at the same time, it dissipates some of their anger. However, protesting rarely accomplishes anything unless it is organized into a universal effort.

We can assert our will by voting to replace the self-serving incumbents with individuals, who will represent us. Establishing an organized, populist movement to remove the establishment will not only result in representative taxation but also will begin the process of re-uniting this country.

Art Woodrow

THE DEMOCRACY CONSERVATOR FOUNDATION
www.DemocracyConservator.org

Editors Note – Simon Barrett will be hosting a call in show on Blog Talk Radio with Art Woodrow on Saturday April 25 at 3PM Central, we will be talking about his new book Election Hangover. We invite people to call in with their questions and comment. Show details are here. 

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