Problem :: The federal tax code is unnecessarily complicated and highly inequitable.

The federal tax code is unnecessarily complicated and highly inequitable.

2,202 Views / Posted by Anonymous

The tax code's immense complexity makes it possible for the richest Americans to pay less in taxes than everyone else, thanks to expensive accountants who are in point-blank terms, tax evasion specialists. Meanwhile, average Americans, who cannot afford to set up questionably legal off-shore tax shelters, Swiss bank accounts, and industry-specific loopholes for their employers, have to struggle with a byzantine labyrinth of complex forms and procedures which are not even necessary in the first place, because the IRS can actually calculate your taxes for you.

Supporters: Ying Lei, Aaron Greenspan, Eric Teasley, Neil Greenspan, Aaron Wilton, Jonathan Wallis, Patrick Warner, Kelly Wooters, Brian Sperling, Dana Leader, Kyle Rutland, Nicholas Fox, Timothy Suen

Opponents: None

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Solutions

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1		Centralize all state and local taxes through the IRS so that the burden of allocating resources, filling out different forms and calculating different rates falls on the government, not the taxpayer.
		Right now, a basic paycheck in California has four different payroll taxes associated with it, some of which are withheld on the employer side, some of which are withheld on the employee side, some of which are federal, some of which are state, and some of which are local. In addition to payroll taxes there are corporate franchise taxes, sales taxes, use taxes, and various other fees to keep track of. I want to make one payment per month to one agency. I want to be told how much I owe so that I can pay it. I want to be able to set up automatic electronic payments. And I want to be able to check all of this on-line.
1		Create a tax system that links taxes paid to government services accrued, both directly and indirectly. Perform a study by a non-partisan group of economists to establish this relationship.
		Economic benefit (various types of income) is a decent surrogate for figuring out the benefits someone enjoys from government activity, but it's prone to obfuscation by the people who desire to avoid taxes. A better solution - and one that is in principle achievable - is to see how every dollar spent by the US government (and perhaps later even state governments) benefits each taxpayer. This wouldn't require a 1-for-1 match, but it would certainly be reasonable to do within income percentile groupings (5%, 10%, whatever). So if the government spends $1 T to maintain a $10 T GDP and guarantee the safety of $100 T in wealth (tens make head math easier), then a person who makes $1 B (1/10,000th of the economy) should pay $100 M in taxes (1/10,000th of the operating budget). Alternatively we could figure out how much work the government does that protects property and how much protects income-generation and further subdivide tax burden that way. It would probably be good to set some minimum threshold for these taxes, but it is also the case that poverty-abatement programs benefit those who aren't poor, so those sorts of programs could also be handled this way.


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