William Gifford, MBA, writes:
Congress should eliminate the current system altogether. Throw out the federal income tax because it’s too broken to be fixed.
In it’s place, I think we should pass something like the VAT in Europe: a federal sales tax. Think about it. Rather than penalize people for making more money, a federal sales tax would only apply when you spent money. Everyone spends money so everyone pays tax, instead of how it works now with the top taxpayers paying for everyone else. And everyone is paying the same rate.
I know that many people will say that a federal sales tax will be unfair to the poor, so I would suggest exempting necessities like food and medicine.
When you tax income, you are giving people a disincentive to make more money. This way, people can make more money without getting a penalty. But if they spend their money, it benefits everyone.
This works very well in most European countries. I think we should try it.
Frank Siler writes:
All members of Congress should be forced to do their taxes with pencil, paper, and IRS instructions. I am hopeful they would all conclude that the process is ridiculously complicated, invasive, and needs to be greatly simplified. Often I see politicians making clearly false or at least misleading statements about changes they would like to make in the tax code; if the system was simpler more people in our society could have intelligent conversations about how our tax system works.
Secondly, but related to the first point: transaction costs and ease of compliance need to be considered as part of tax legislation. There are so many technicalities in the code that it is very difficult to produce a 100% correct tax return; hence it is difficult to tell the difference between an honest taxpayer and one who deliberately cheated. Additionally, the number of technicalities makes it very expensive to be compliant with the code.
Finally, it would also be helpful to compare the United States tax compliance burden to other countries: having lived in the United Kingdom, I can say that their process appears much simpler and less invasive to a typical citizen.
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Beth S. writes:
Two words: flat tax.
David Smith writes:
If I could make one change in the tax code, I would eliminate any benefits for having children. I chose to be single. I chose not to have children. I am appalled to see how much our tax system subsidizes having children. It is welfare, just put forth another way.
I already pay property taxes in my state. Those property taxes are used to pay for schools to educate children that I don’t have. I understand that education is something that benefits society, so I don’t mind.
I feel similarly about programs that pay for medical insurance for children. I do think all children should have medical insurance.
But I don’t think that anyone should receive extra tax benefits because they chose to have children. It was especially annoying to see that Congress offered extra stimulus checks per child last year. Combined with extra exemptions and the earned income tax credit, people with children get huge breaks when it comes to taxes. I don’t think this makes sense and I don’t think it’s fair.
