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Actual Great Moments in De-Evolution: Tax Reform

Posted April 15, 2009 - By TylerColfax

What would you say if I told you you'd never have to file a tax return again? No money comes out of your paycheck for taxes and if you win a million dollars on a game show, you get a million dollars. What if we could complete dissolve the IRS? You'd probably say yes to all these things unless you work for the IRS or as a Turbo Tax programmer. Today's actual moment in de-evolution is about changing the funky tax system. We've got a few ideas, the Fair Tax, the Flat Tax, and the Wacky Tax. One of them is ours, the best ones are not.
IRS Abolish
The best idea: The Fair Tax
Most recently and widely known to be touted by Ron Paul and Mike Huckabee in the 2008 election, the fair tax was first formally proposed in Congress in January of this year and the basic gist is that income tax would not be taken out of your paycheck, the IRS would be dissolved (or to put it more bluntly as they do in the description, ABOLISHED) and the job of collecting tax would fall to the states, who would increase their sales tax percentages to make up for the loss of revenue.
Here's why I love this idea: Everyone buys things. Regardless of your income, your citizenship status, or the number of kids you have, you will be buying goods and services year round. This goes for everyone. If your hamburger is $1 and a 25% sales tax was tacked on, your burger is now $1.25. But you know what else, it's also $1.25 for the illegal alien who just got paid under the table and would have never paid any tax on his income. It's also $1.25 for the drug dealer who lives off his illegal trafficking.
The trouble is, it's also $1.25 for the AIG CEO who makes $23 million a year. It breaks down here because you don't want to charge the bum who just scrounged together 100% of his income to buy a hamburger, while Bernie Madoff isn't paying anything close to a fair percentage of his income for the same burger. But economists and mathematicians a billion times smarter than us can figure out how to make this work and I hope that someday soon it becomes a reality.

Read the proposed House bill here sponsored by John Linder of Georgia

The next best idea: The Flat Tax

The flat tax is something people have bandied about occasionally through history as a way to simplify the tax code and minimize their burden. It simply means that if you make $100,000 a year and the flat tax is 10%, you pay $10,000. Trouble is, if you make $1,000, your tax is $100 and it must be said that each dollar is more vital at a lower level of income as $900 to a poor person is not equal in scale proportionately to the $90,000 that the wealthier tax-payer has retained.
LeskoOf course, there are other factors that go in to determining your tax, such as being below the poverty line which would enact some leniency. The arguments on both side of the issue might hinge on which deductions are abolished if a flat tax were enacted, as this could provide more money for the middle class and unfairly tax the wealthy or vice versa.

The worst idea: The Wacky Tax
Proposed by this guy (pictured at right) about ten minutes ago, The Wacky Tax will never be introduced, but basically it states that all arrows through the head come with a 249% tax when purchased and a 7% tax when used. 100% of Rip Taylor's income is taxed every year and he lives in government provided housing and is given free cocoa all the day. Loopholes will include tax havens for businesses based on the moon and everyone on Mercury is free of the tax code until 2020 when they must pay with their lives. Rubber chicken taxes will go untouched as their lobbyists are too powerful at this time.

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