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April 15 - Just Another Day In Spring

For millions of Americans, April 15 is not just another day in spring. It is the day that the tax man cometh. Unfortunately, it is not just one day. We waste more than four billion hours each year doing IRS paperwork. In 1929, Tax Freedom day was February 9th. In 2008 it moved to April 23rd. It does not take much imagination to realize that we are all working for the federal government. When the tax code was first enacted in 1914, the IRS budget was 110 million dollars, today it is more than 15.4 billion dollars. In short, our tax system is careening out of control.

What are we getting from our current tax system?

Assessing a higher tax rate as a person's income increases discourages hard work and productivity. Taxing interest and dividends discourages savings and investment. The underground economy, which they estimate to be between 400 and 800 billion dollars, does not get taxed. The real cost of government is hidden. I can only laugh when I hear people say the poor do not pay income tax. Of course they pay. Goods and services include the cost of corporate income tax. We all pay and we do not know how much. Because the tax does not stop at the border, the only way American companies can be competitive in foreign countries is to export jobs overseas.

We have given the IRS unprecedented authority and the government access to the most minute details of our lives. Everyone has heard of or has experienced at least one IRS horror story. The idea of innocent until proven guilty does not exist within the confines of the IRS. When proven wrong there is no legal redress for any damages their investigation may have caused.

Had enough?

There is a solution and amazingly it is a simple solution. The solution is a National Retail Sales Tax. This tax would replace all forms of Federal Income Taxes, including the individual income tax, all corporate and business income tax, capital gains, inheritance, estate and gift tax. It would not affect Social Security.

The National Retail Sales Tax would apply on all items sold at the retail level only. A tax rate of 17 percent would bring in the same amount of revenue as the existing income tax system. The consensus is that once the economy has stabilized, this rate could decrease to as little as 11 percent. There are several schools of thought on how to keep the low income population from paying too much tax. I personally favor a tax exemption on basic human necessities. Under this system, food, utilities and medical would be exempt. For big ticket items, such as houses and cars, we could establish a base amount of the purchase price as exempt.

A National Retail Sales Tax is easy to implement. Forty-five states collect sales tax, so the collection mechanism is already in place. The states would be responsible for remitting the tax to the Federal government.

After implementation

What would we have after we implemented the National Retail Sales Tax? First, the results of our hard labor would stay in our pocket for us to decide whether to spend or save. The actual cost of government would no longer be hidden. We would see this cost at the bottom of every register receipt. The tax would stop at the border. American companies would again be competitive in foreign markets. Our job drain would lessen and perhaps stop completely. Market forces would drive business decisions without being convoluted by income tax rules. Foreign goods would no longer have a price advantage in the United States. American companies would prosper by increased sales.

This is the only system that would result in the taxation of the underground economy. This economy includes not only organized crime, but the huge segment of our country that run their businesses outside the bureaucracy of licenses, permits, etc.

Last but not least, we would no longer need the IRS and its 9400 pages of convoluted tax laws. April 15 would again be just another day in Spring. Maybe we could make it a national holiday. I vote for "Free At Last" day.

What are you waiting for?

Write or email your congressional representatives today. Tell them what we want and make sure they understand that if they don't do something we will hire someone who will.