The Federal Income Tax

The Federal Tax Code is a popular tool for members of Congress to bring in more spending money and repay obligations to special interests. The 60,044 page income tax code has been amended and patched so often that it is complex, convoluted, inefficient and unfair.

The tax code includes: depreciation schedules, multiple income tax brackets, complicated deduction rules and an Alternative Minimum Tax. It is so complex that the Internal Revenue, itself, has difficulties rendering opinions on certain of its provisions.

The income tax is unfair because of the double taxation of Estates, Social Security income and dividends. It is undemocratic because it penalizes individuals for their financial prowess. The tax treatment of the wealthy is analogous to making Tiger Woods play a longer golf course than the other competing golf professionals because of his superior skills. The code is costly because of the time and expense required to fill out the complicated forms. Finally, the Alternative Minimum Tax provision directed at wealthy individuals affects the middle class now because it wasn't indexed for inflation; an example of the unintended consequences of Congressional micromanaging.

Substituting the flat tax for the prevailing income tax will instantly increase the effectiveness of citizens and businesses in America. The economies of the twelve foreign countries, which switched to the flat tax, have improved dramatically. The flat tax is the ideal income tax because it simple, fair, progressive, and cost effective. It's: - simple, can be filled on a post card - fair because everyone pays the same percentage of their income - progressive, the higher the income, the higher the tax - cost effective, eliminates the tax preparation time of individuals and/ or using costly tax professionals. This tax would save millions of dollars of the IRS budget ($11.4 billion, 2008) by reducing the number of its employees (86,585, 2006). There are other valuable adjunct benefits to the flat tax. It eliminates double taxation, simplifies tax planning, enhances the economy, increases privacy, improves compliance, and generates more tax revenue.

There will be many vociferous critics of the flat tax. Naturally, the adversely affected individuals, IRS employees, accountants and tax lawyers, will oppose these changes in the present Federal Income Tax Code. Politicians will oppose this tax because it will deprive them of a powerful tool to stay in office. A blatant example of a member of Congress using the tax code, to satisfy a sponsor, is the famous Gallo Wine Amendment. In 1978, Julio and Ernest Gallo helped Senator Alan Cranston win a difficult re-election in California. Cranston returned the favor by getting a tax amendment passed on a Saturday, with few Senators present that allowed the Gallo family to spread their inheritance payments over several years.

The benefits of the flat tax extend beyond simplicity and fairness. After-tax income will rise. There will be renewed work incentives. The reduction of taxation on investments will shift capital to producing goods and services. This shift will create new businesses and industries with the concomitant increase in employment. Industries will be encouraged to locate in the USA and the shift to off shore jobs will decrease. All of these positive changes will insure the continuous growth of our economy.

Art Woodrow, a veteran of World War II who is dedicated to restoring our democratic process, is the founder of The Democracy Conservator Foundation [http://www.democracyconservator.com/]. DCF is a not-for-profit, apolitical organization seeking to increase the involvement of U.S. citizens in the political process and to encourage the discussion and debate of issues our society faces today. To learn more about how to make your vote count, visit [http://www.DemocracyConservator.org]