Simplifying Taxes

It’s W-2 season and that means taxes are right around the corner.  The most common 1040 form has 76 lines and over 40 pages of instructions.  Then there are the numerous other schedules and forms which can be added if necessary.  There has to be a simpler more efficient way to collect taxes

Over the years many ideas have been batted about but the most popular current idea is having a national sales tax.  A national sales tax would eliminate the complicated mess of federal taxes currently collected and greatly reduce the bureaucracy of the IRS.  Most sales tax proponents predict a 23-30% rate would be needed. 

One of the main criticisims of the sales tax is that it would have a high burden on the poor.  As a solution tax rebates could be given to offset the impact of the sales tax to a certain level which is the poverty line in most cases.  This solution is used in a “fair tax” model. 

As a 20 something person I personally find the national sales tax/fair tax model intriguing and would be willing to participate in a pilot program as an alternative to the current tax system.  Hopefully Bush will keep at least one of his state of the union promises and work to simplify the tax code   

For more information visit  Pro-FairTax Site, Wikipedia, Problems with the FairTax Site


~ by novamiddleman on January 27, 2007.

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