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April 15 2010

Happy Tax Day! (Wait, that's not right...)

Nicole Kurokawa Neily

Across the country, April 15th is dreaded by as the day that taxes are due. Well, this year only 53% of Americans had to pay, but you get the idea. At the very least, preparing and filing paperwork is a tremendous hassle for virtually everyone, and creates a considerable dead weight loss of money and time. Americans work hard for their money, and deserve to keep it and spend it as they wish – and shouldn’t be grateful when they get THEIR money back in the form of "refunds" (which, let’s be honest, are really just interest-free loans we make to the government!)

Therefore, today is an excellent day to reflect on ways to simplify the tax code.

An editorial in The Wall Street Journal notes that the U.S. is ranked 61st out of 183 countries with regards to ease of paying business taxes, which is shameful. (As they note, "Perhaps Congress can take some comfort in the fact that we beat out Congo, Uzbekistan and Venezuela in the World Bank survey, though give Speaker Nancy Pelosi time.")

Unfortunately, simplification isn’t as easy as just switching to a national sales tax (as advocated by the Fair Tax coalition), because it’s pretty certain that any "transition" period would just end up being permanent… so we’d have BOTH a national sales tax and our current onerous system (more on the value added tax, or VAT, coming shortly.)

Nor is it as easy as just eliminating deductions, because in so doing, the federal government just gets to keep more money.

 So what’s the solution? Ideally, comprehensive tax reform would lower rates at the same time as eliminating deductions in order to effect a net tax cut for taxpayers and businesses. It may be improbable, given the web of special interests in Washington working to keep existing benefits and score new ones – but hey, a girl can dream!

Independent Women's Forum is an educational 501(c)(3) dedicated to developing and advancing policies that aren’t just well intended, but actually enhance people’s freedom, choices, and opportunities. IWF is the sister organization of the Independent Women’s Voice.​
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