How can we change the tax code to ease the burden on our families and promote growth and innovation?

Question

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I want to thank the more than 12,300 people who took the time to respond to my question. The volume and the exasperation of these answers speak to the unnecessary and stifling burden that our current tax code imposes on the American taxpayer.

Answer 1

Make it easier to understand and comply. It shouldn't take a college degree in accountancy and tax law to do one's own taxes. We are a simple family with no rental income, few investments, etc., and yet it is an incredible mental burden to do our own taxes. The legal language and myriad of deductions, exemptions, and exceptions are, frankly, ridiculous. Without so many rules and regulations, taxes would be easier and people couldn't cheat so much, either. And the IRS and state revenue departments wouldn't have to spend so much manpower catching cheaters.

Answer 2

I'd like to add my own voice in support of a flat tax. In addition to the obvious benefits of simplicity, there is the simple benefit of obviousness. When everyone knows that other people will be paying their fair share, there is less incentive to cheat. And creating a flat tax rate will eliminate the need for such horrors as the alternative minimum tax. The AMT was created with the best of intentions--to ensure that wealthy individuals did not avoid all tax responsibility. But like too many well-intentioned provisions of the IRS code, it has ended up burdening middle class wage earners as much or more as the genuinely wealthy.

Moreover, the tax system has created its own support industry. Lobbyists, lawyers, and public relations experts are deployed by the thousands to ensure the creation and retention of special incentives and exception, i.e., what are called loopholes by anyone who doesn't get one. Getting rid of the loopholes will allow these resources to be directed instead to useful work.

Neither the rich nor the poor pay a fair share. The rich have access to expensive accountants and elaborate tax reduction schemes. And too many people have no sense of the cost of government because they pay NO tax at all. That is a huge mistake, and it diminishes the communitarian aspects of democracy. The bulk of taxpayers, stuck in the middle, have both the sense of carrying the overwhelming cost of government AND the feeling of impotence about being able to influence that government. In the long run, that is a recipe for disaster.

Answer 3

Mitt Romney: How can we change the tax code to ease the burden on our families and promote growth and innovation?

I believe the best federal tax would be a 20% flat tax, which means every working individual and every corporation --no matter how large or small-- would pay the same rate.

Now, some people might argue that this would be unjust for poor people. Why do they have to pay 20%? Simple. In reality, the government is a corporation. It is a service provider just like Northwest Airlines or Cox Cable. Did you know that? What kind of service is the government supposed to provide for us? The American government's purpose is to protect its people and peoples' property.

Every person living in America is protected by the US military. We are all protected to some degree. Those who have more assets need greater protection than those who have nothing. Therefore those who earn more money need to pay more. That's why a flat tax is not a fixed amount. It's a fixed PERCENTAGE. If a person makes more money, he pays a greater dollar amount.

The only case when a person should pay a higher percentage of his income to government is if he receives special protetion from the military which is not provided to ordinary citizens.

Government must use justice not mercy when it comes to taxing people. I believe there should be no tax deductions and tax brackets for anybody. No one should be able to escape paying taxes. I believe that both legal and illegal immigrants should be forced to pay taxes just like American citizens. There should be no one in America who gets any kind of tax relief.

STILL I THINK THE QUESTION IS WRONG, BECAUSE THE #1 ISSUE THAT NEEDS TO BE ADDRESSED IS NOT HOW GOVERNMENT SHOULD TAX PEOPLE BUT RATHER HOW GOVERNMENT SHOULD SPEND THE MONEY. THAT'S THE MOST IMPORTANT THING.

If the government wastes most of its revenue and is in seriously big debt, then it really doesn't matter whether we pay an income tax or a sales tax or fairtax or whatever. WHAT'S MORE IMPORTANT IS HOW THE MONEY IS SPENT NOT HOW IT IS COLLECTED.

I am a member of Citizens Against Government Waste.

Answer 4

This question has a very complete and at the same time very simple answer - the Fair Tax. It is a non-partisan and revenue-neutral national sales tax that eliminates the income tax, double taxation, the overly burdensome and unsupportable current tax code, the waste and injustices of the current tax system and the inefficient structures built to support it, and all the complications and loopholes it currently contains. Learn more at fairtax dot org

Answer 5

The true burden our families face is not a decreasing amout of dollars we have in our pokets, but the decreasing purchasing power a dollar has today. Higher inflation is the enemy of all Americans regardless of which political party we claim as our own. It wouldn't make sence to abolish a 37% income tax if inflation rose to 50% would it? Government deficits caused by either tax cuts or increases in Government spending result in inflation. I am aware that some Economist will disagree siting Ricardian Equivalence.
Ricardian Equivance assumes that present tax cuts are offset by future tax increases, and that we won't spend our additional tax cut, but instead,save it. I don't know what you would do with it, but by looking at our national savings, I see that it's negative so there is a pretty good chance that your not going to save it. The one thing I find most interisting is how the Government has been fighting inflation over the past ten years or so. It is common knowledge that if we print more money the value of each dollar in circulation falls, circulation is the key word. Ask your self this, why do you think the U.S. Treasury made "collectable quarters"? It's a genious idea, pay off debt with new money that wont go into circulation. I see that they are trying it now with dollars, lets see if it works.
If what you want is more money in your pocket now reducing taxes is the answer, but at the future generations expence. The United States currently is sitting at a respectable 4.4% unemployment, I don't think a tax cut will decrease that amount too much. I sugest that we sould focus on keeping Inflation low and stop buying things we don't need. This will be the best way to ease the burden on our families and promote growth and innovation.

Answer 6

The simple answer to your question is to have Congress pass HR-25/S1025 (the FairTax Bill).

I started looking at the responses to the question, but the more I read, the more answers you received!

Everyone will agree that the current system of income taxes is all messed up. There are over 60,000+ pages of rules and regulations. If you ask 100 IRS employees the same question, you will get 110 answers (10 will change their minds) and all of them would be considered correct if you documented who you talked to! If not, another agent would consider it incorrect. Therefore, the current system needs to be scrapped.

The Flat Tax is still a system that is based upon "income". This is often defined by people to have entirely different basis. It still puts taxes on businesses. Businesses do not
pay any taxes. It does not matter what size the business is or what it does. Any tax that is placed on a business (Social Security, income, flat, vat) is merely treated as a cost of doing business and passed along to the customer (individuals), employee (individuals) or is deducted from the dividends paid to the stockholders (individuals). In other words, only individuals pay taxes.

The FairTax is a consumption based tax. When a new item is purchased at the retail level or service is obtained by the individual, the tax applies. When an item is purchased that is used, there is no taxes paid. (The government does not receive taxes on the same item more than once!) Businesses do not pay any taxes. This will reduce the purchase price of the items or services by the amount of federal taxes currently being passed on as well as the additionally incurred compliance costs the business has.

The FairTax will spread the tax burden acrossed the entire Country and will greatly reduce the fraud and abuse of the current tax system. The avoiders of the income tax will be paying their "fair" share because they will be buying things. The tourists from all over the world will be contributing. The undocumented/illegal/criminal foreigners in the USA will be paying the consumption taxes.

Everyone pays until you consider the "Prebate". This is a process that will provide the FairTax percentage that would be paid up to the poverty level, in advance of spending their money. It would be disbursed on a monthly basis to each household that qualifies for the prebate. The household must be in the USA, each member must have a valid SS Number and the household would provide the location for the funds to be deposited. Private companies have offered to the services to the federal government and will pay the government for being allowed to do it. (Business paying government for doing something for the government, does that sound strange?)

The "no tax on business" will cause companies in other parts of the world to want to do business in USA. The GDP will increase over 10% the first year of the FairTax. Unemployment will decrease and wages will go up!

The FairTax is a win, win, win program.

Answer 7

First-- CUT SPENDING. specifically entitlement programs like welfare must go. No country has EVER taxed itself to affluence.

Another good step would be the decriminalization of drugs and release ALL prisoners incarcerated on only drug charges, (or who have served their other sentences). This would immediately eliminate prison overcrowding, allow us to balance the budget by virtually eliminating the DEA, most of the ATF, and many prisons.

Without raising taxes you could also pay off the deficit withing 10 years.

Second -- flat tax with a standard per person deduction ONLY. (Moving tax day to election day would help keep legislators "in-line" too.)

Third -- Grade corporate income tax based on how well the industry helps the economy.
manufacturing/agriculture to grocery store level - 0-5% of net profit, this industry adds to a countries wealth and should have little or no tax burden to help it to grow.
service industries (including lawyers) - 30-40% of gross profit, these industries help make our lives more convenient but add little to our country's wealth
financial industry - 50-90% of ALL charges. These companies make borderline immoral profits based on switching money around in a shell game and keeping too much of it for themselves. Banks will claim that this will put them out of business, which is ridiculous. What is their threat, that they will stop making free money and start contributing to society? Ooooh, what a threat.

Answer 8

Sir: it is not the tax code that is the problem. It is the debt one has with no medicare.....for some. Too much greed and money for others ..which they hide and do not want to recognize that they are
more than fortunate - 3 to 4 cars etc. etc. All wealthy Americans should be taxed - they should not be able to take their mortgage off their income tax. The U.S. has a society which has changed over the past 3 decades. I.E. We have American friends who pay
hardly Any income tax - live in a lovely home- travel and somehow
are covered by medicare. Something is wrong. Many Americans
have mentioned to us that if we lived in America we would pay no
income tax - O.K. but I prefer to have cradle to the grave health services. This is what most middle income Americans dread. You say that they can buy it. I happen to know that some of my American friends have had a problem with having their care cut off.
We may wait a little longer for operations - depending on the urgency, but at least we have money in the bank. Did you know that health care is much more important. When we lived in the U.S. for the winter -we had insurance. Why are we not there now.
Because insurance to go to America is out of sight. 8 thousand
dollars per couple - plus. I love the U.S. but not their hospitals or
doctors. In my experience the hospitals were privately owned and
the staff were treated badly. The doctors charged ridiculous
prices. They were DO's whatever that is not a real doctor.
Sorry about the diatribe - but I would like to see my American friends treated better than they have been heretofore. The fat cats who will be nay sayers for sure - are not living in the same
sorld as 66% of the American people.
Yes I am a Canadian but I also love my American friends.

Answer 9

Simplify the entire tax code. Adopt a 1040 EZ type of form or use this form for all personal tax returns. In addition, all tax filers pay a simple tax of 5% of their income. Could you imagine how much our tax revenues would increase if those who currently do not pay taxes as a result of fancy bookkeeping paid this small percentage? Simplicity across the board is the key without a doubt.

Answer 10

Thanks For The Opportunity To Express My Idea. If We Totally Eliminated The Income Tax As We Know It and Replaced It With A NATIONAL Sales Tax Then Everyone INCLUDING Visitors From Other Countries Would Contribute To Our Tax System When They Buy Anything In This Country. They Use Our Roads Our Waterways Our Amusement Parks Our National Parks Etc, Each Time ANYONE buys ANYTHING other Than FOOD There Would Be A Tax Added To The Purchase Price. If You Buy A Chevy You Pay Tax On That Chevy But If You Buy A Bentley You Would Pay The Same Rate Only The Amount Would Be Substantionally More Because The Purchase Price Was More. The More Expensive The Item You Buy The More Tax You Pay. So The Richer You Are The More You Buy The More Pay. This Will Also Stimulate Savings Which This Countries Citizens Lack.
Thanks and Goodbye To The Billions Of Dollars Wasted On Trying To Comply With A Stupid IRS Tax Code April 15th Will become Just Another Day!!

Answer 11

Taxing the rich more is not the answer. It only takes looking into the economy and tax codes of countries like Sweden to see that this doesn't work. I had a long conversation with a Swedish native, and I found out that there is almost no drive or reason for anyone to become a doctor, for instance, because of the taxation. After they are taxed so much, they make as much as someone with a mediocre blue collar job.

We have to maintain proportionality. However, I do believe repealing the Federal Income Tax would be appropriate. It was orginally meant to be a temporary taxation to fund the last big War. Too many banks got rich, the goverment saw funding for other projects, and it stayed. Of course, we must have taxation, but the income tax should go. It is legally a 'voluntary' tax, from which, you can 'unvolunteer'; but, you might rue the day you ever attempted, because the government can rake you over coals for trying.
If the F.I.T. were repealed, there would need to be counter balances. Too many people with too much discretionary income can cause inflation, and we all know that this is a vicious circle of events for an economy. What to do? Well, I'm not an economist, but, I think placing higher taxes on more goods would help balance things, especially luxury items.
More income because of the cancellation of the F.I.T., balanced by higher taxation on medium to luxury goods is a very good start I believe. If I keep writing here, we can get into the particulars more later.