As April 15 draws nearer, the excitement of paying politicians has Americans weeping tears of patriotism from coast to coast. With the exception of gathering W-2s, hiring tax professionals in the hopes of a refund check or maintaining records in the rare event you are audited, paying Uncle Sam is as easy as changing your address at the hometown DMV.
Although it requires your time and money, taxes build highways from the backwoods of Alabama to Silicon Valley, guarantee free education for every child and support poverty-stricken nations. Despite misspending, questionable foreign policy and public services problems, these are not the focus of this article. This article regards you, the current tax collection system, and the pending upgrades, which require a few taxpayer clicks to update the outdated system. So, in the spirit of April 15, take a moment to consider how efficiently our taxes are being collected.
In the beginning, the Founding Fathers, the Continental Army and yes, even the French, created the United States. This trinity freed the new country from British taxes, leading Alexander Hamilton to collect revenue by taxing imports. To fund its war against the South, the Union temporarily declared an income tax during the civil war. The current system was enacted by the 16th Amendment in 1913, solidifying Congress the authority to tax income.
The IRS had the responsibility of collecting taxes with a 27 page tax code, which according to CNN Money, is now nearly 74,000 pages long. For our campuses Oedipal members, this is equivalent to reading Fifty Shades of Grey 7,782 times with presumably less frustration. Although a meager 2,600 pages will cover most Americans, The National Taxpayer Advocate calculated that the tax code changes an average of once per day. The Washington Post reports that simply filling out tax code paperwork costs Americans $168 billion dollars and $6 billion hours per year. In comparison, the United States Foreign aid is $37 billion. The tax system obviously needs reform and luckily, we have a number of options.
The FairTax is a sales-based tax of 23 percent on all services and new goods. The benefits of this sales tax are that drug dealers, prostitutes and all other consumers will pay taxes with every purchase, and corporate taxes, which can encourage tax avoidance, would be eliminated.
Some experts point out that rising sales taxes will lead to an increased underground economy and that overseas corporate interests involve more than a tax system. Although products would cost more, many representatives argue that the 7.65 percent payroll tax and the largest federal tax bracket of 15 percent would be replaced with an equally simple 23 percent sales tax. To offset the taxes on essential goods like food and medicine, proponents of the sales tax developed a “prebate” or a payment to every American on the first of every month. This may sound like free money, but according to UWG Economics professor, Dr. Michael Sinkey, we should consider economics 101.
“The potential of businesses to raise prices on essential products could lead to higher inflation.” said Sinkey.
Any changes to our tax system would have unknown effects, but it is clear that change must be made for Americans to have a more transparently efficient tax code. As Thomas Jefferson said, “I predict future happiness for Americans, if they can prevent the government from wasting the labors of the people under the pretense of taking care of them.”