Let’s file our taxes, then file for reform
February 22, 2005
We can relax now. We have our 1040s and W2s, and the Internal Revenue Service is ready to answer our questions over its phone lines. Or not.
On Sunday, the Plain Dealer reported scary points for American citizens to consider.
If a person has a question about filing taxes, IRS employees will refer him or her to a particular form. Outside of that form, one may be out of luck because IRS employees are discouraged from veering off their scripts.
So, basically, America has a system that requires accurately filed tax returns that doesn’t help citizens accurately file them. The IRS itself said that when people do get responses to questions, answers are wrong about one out of five times.
Now, IRS employees are required to provide their names and badge numbers to customers, according to the Plain Dealer. Knowing both may save citizens from penalty costs.
The IRS phone lines are busy. The number of phone calls has increased by 10 percent between 2000 and 2004. Calls regarding tax laws and procedures for filing returns make up about one-third of this volume.
The call volume isn’t surprising, considering the federal code has 51 percent more pages today than the 40,500 pages it had in 1995.
Reform is needed. It’s time to look into changing the way America does its taxes.
America should replace its current tax system with a flat tax rate. Under a flat tax, all taxpayers (regardless of their income levels) would pay the same statutory tax rate.
At least two proposals for a flat tax in America have been introduced — the Armey-Shelby-Craig flat tax proposal in 1994 and the Arlen Specter flat tax proposal in 1995. Both replace the current income tax with two levels of taxes: an individual-level tax and a business-level tax. The first set the statutory rate at 17 percent, the other set it at 20 percent.
The flat tax makes sense. While it would not eliminate the IRS, it would reduce its role, according to taxreform.com. Additionally, the flat tax would significantly reduce the tax rate for many Americans, eliminate double taxation and simplify tax preparation. Some things — like savings income and interest income — would no longer be taxed.
Households would get deductions based on family size, but then every dollar of income above that level would be subject to tax, according to Capitalism Magazine. The system would ensure that the rich pay their share, but it would also avoid the punitive tax rates that have caused economic misery in Europe. If Bill Gates makes 10,000 times more than someone, he pays 10,000 times more in tax.
It’s not too good to be true. Hong Kong has had a flat tax for some time and has boasted the world’s fastest growing economy for about 50 years.
And, President Bush’s former administrator in Baghdad, L. Paul Bremer, approved a pro-growth tax system in Iraq, where citizens pay a flat tax of 15 percent. The flat tax there is expected to help restore the Iraqi economy, as flat taxes have done in Russia and Lithuania.
American politicians have encouraged it overseas, and we’ve seen it work. It’s time to bring the flat tax home.
The above editorial is the consensus opinion of the Daily Kent Stater editorial boardWe can relax now. We have our 1040s and W2s, and the Internal Revenue Service is ready to answer our questions over its phone lines. Or not.
On Sunday, the Plain Dealer reported scary points for American citizens to consider.
If a person has a question about filing taxes, IRS employees will refer him or her to a particular form. Outside of that form, one may be out of luck because IRS employees are discouraged from veering off their scripts.
So, basically, America has a system that requires accurately filed tax returns that doesn’t help citizens accurately file them. The IRS itself said that when people do get responses to questions, answers are wrong about one out of five times.
Now, IRS employees are required to provide their names and badge numbers to customers, according to the Plain Dealer. Knowing both may save citizens from penalty costs.
The IRS phone lines are busy. The number of phone calls has increased by 10 percent between 2000 and 2004. Calls regarding tax laws and procedures for filing returns make up about one-third of this volume.
The call volume isn’t surprising, considering the federal code has 51 percent more pages today than the 40,500 pages it had in 1995.
Reform is needed. It’s time to look into changing the way America does its taxes.
America should replace its current tax system with a flat tax rate. Under a flat tax, all taxpayers (regardless of their income levels) would pay the same statutory tax rate.
At least two proposals for a flat tax in America have been introduced — the Armey-Shelby-Craig flat tax proposal in 1994 and the Arlen Specter flat tax proposal in 1995. Both replace the current income tax with two levels of taxes: an individual-level tax and a business-level tax. The first set the statutory rate at 17 percent, the other set it at 20 percent.
The flat tax makes sense. While it would not eliminate the IRS, it would reduce its role, according to taxreform.com. Additionally, the flat tax would significantly reduce the tax rate for many Americans, eliminate double taxation and simplify tax preparation. Some things — like savings income and interest income — would no longer be taxed.
Households would get deductions based on family size, but then every dollar of income above that level would be subject to tax, according to Capitalism Magazine. The system would ensure that the rich pay their share, but it would also avoid the punitive tax rates that have caused economic misery in Europe. If Bill Gates makes 10,000 times more than someone, he pays 10,000 times more in tax.
It’s not too good to be true. Hong Kong has had a flat tax for some time and has boasted the world’s fastest growing economy for about 50 years.
And, President Bush’s former administrator in Baghdad, L. Paul Bremer, approved a pro-growth tax system in Iraq, where citizens pay a flat tax of 15 percent. The flat tax there is expected to help restore the Iraqi economy, as flat taxes have done in Russia and Lithuania.
American politicians have encouraged it overseas, and we’ve seen it work. It’s time to bring the flat tax home.
The above editorial is the consensus opinion of the Daily Kent Stater editorial board.