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Benjamin Culkin Dr. Barko English 102 April 7, 2015

Simplify Our Burdens

April 15th is often one of the most dreaded days of the year, because it signifies

the last day we have before we must turn in a statement of income and expenses to the IRS. Sure,

by filing such a statement we often get money back from the IRS, but paying money to them still

hurts. Yet we cannot simply do away with the IRS, because if we did so, who would collect the

money that allows the government to pay for things? Compounding this problem is the sheer

impenetrability of the tax code (13,458 pages costing about a grand at last check) and the fact

that the people who are rich enough to hire accountants are the ones who least need to benefit

from the savings on doing so. Indeed, we should simplify the tax code greatly, because it is too

complicated to allow easy usage of by people who cant afford expensive accountants.

To simplify the tax code, there are several ways to go about it, but none of them are

obviously better than any of the other reasons. However, this doesnt mean that they are all

roughly the same. Indeed, they are quite different, ranging from simply closing some of the

loopholes to totally overhauling the system. I believe that overhauling the system completely is

the best (if not terribly realistic) idea, because it gets rid of all of the accumulating crud.

To start out with, this could involve simply a flat percentage tax on income, indexed to

inflation, because that is the simplest possible way to tax a group. Unfortunately, this is a

situation where a simple solution simply isnt a very good one. The best possible way to improve

on this would be to perhaps use a staggered percentage tax, where everyone pays a flat

percentage, but what this percentage is is determined by the income you make in a year.

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Of course, this system raises the obvious question of: What do you do with things like tax-

exempt donations to things, and all of the varied tax credits? The best way to deal with this is to

simply go over these with a fine-toothed comb, and separate them into two categories. These

would be things that reduce/increase your income for the purpose of determining your taxation

rate, and things that adjust that rate. A possible third category if needed would be things that gave

you tax credit or penalties to the raw dollar amount youd have to pay, which would end with a

system that works in much the same way as the one we have to day, but is infinitely easier to

deal with.

However, like any solution to any seemingly intractable problem, this one has its share of

issues. Perhaps the most prominent one is: How would businesses be affected by this? The short

answer is Im not sure. A longer answer, but still not satisfactory would be Im not sure,

because Im not a business accountant. Thus, most businesses would probably be bound by

much of the same shackles as the old system, but there are ways such a new system could be

adapted to serve businesses.

A possible way to do this would be to base the tax on a businesses net profits during the

fiscal year, applying them to a different set of staggered brackets. Tax credits and other things

would work in much the same way as Ive already discussed for individuals, and things like sales

tax would simply be accounted for in the singular percentage. This still leaves the issue of what

to do with things like the sin tax we have on alcohol and tobacco, but no solution is perfect

within that regard.

Another issue that may cause problems is the fact that simplifying the tax code is all well

and good, but what keeps it from becoming over-complicated again? Theres really nothing that

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can stop a law from being changed, but the objective isnt to prevent change, it is to keep it from

becoming over-complicated. As far as I can see, the easiest way is to classify all of the things

people might want to do into categories and have devoted rules on how to do things. An example

from earlier would be to sort everything into three categories: affects income taxes paid on,

affects percentage paid, affects amount paid after taxes.

Taxes are essential to our country, but the current system for paying them is over-

complicated. Instead, we should simplify the system to a simple percentage based system where

all taxes and entitlements are split into three categories, affecting a single staggered percentage.

Like any system, it has its problems, but none of them are insurmountable.