IRS gone?

Income tax simplification preferable to massive sales tax

Posted: Friday, February 6, 2015 10:26 am
John Montgomery
Posted on Feb 6, 2015by John Montgomery

Abolishing the IRS and eliminating the need to file an income tax return has enormous appeal, but the "Fair Tax" promoted by most of the Kansas congressional delegation is not a good way to do it.

U.S. Sen. Jerry Moran, R-Manhattan, and Sen. Pat Roberts, R-Dodge City, are sponsors of The Fair Tax Act of 2015, introduced in the Senate on Jan. 13. Reps. Tim Huelskamp, R-Fowler/Hutchinson; Mike Pompeo, R-Wichita; Lynn Jenkins, R-Topeka; and Kevin Yoder, R-Overland Park; are sponsors of corresponding legislation in the House.

The "Fair Tax" would be a national 23 percent sales tax that would replace the federal income tax and abolish the Internal Revenue Service.

Even though the intent is worthy, it's probably a nonstarter because it is so radical. Abolishing the IRS is oh, so tantalizing, but no one has the stomach for a 23 percent sales tax, which would become 30 percent with state and local sales taxes added.

And while wholly more simple, a national consumption tax of this magnitude would be a jobs killer in a consumption-based economy. It would curtail spending on goods and services even though consumers would have more money in their pockets.

As the recent Brownback "experiment" in Kansas shows, removing one leg of the traditional three-legged tax stool - income, sales and property - is a huge mistake.

Alternatively, the income tax could be drastically simplified. All deductions and credits could be eliminated except for the charitable gifts deduction.

Imagine, then, a simple tax return, electronically filed and taking the average American no more than a few minutes to complete. That seemingly would cut out the need for most of the bureaucracy in the bloated IRS.

The income tax, per se, isn't bad. In fact, it is the fairest way to tax. It has only become so vile because it is loaded down with credits and deductions and other beguiling complexities.

A progressive tax with two or three income brackets would be good to retain, but even a single-bracket "Flat Tax" would be preferable to the so-called "Fair Tax," which is anything but fair.

A simplified tax code is a holy grail to be sure, but replacing the income tax altogether with a sales tax would be an economy-killing mistake.

By John D. Montgomery
Hutchinson News editorial board

http://www.hutchnews.com/opinion/edi...b91b82d5d.html