I have felt for a long time that the dems should be blowing the horn for radical tax simplification and a slightly increased progressivity of rates, and simply say that they are following the lead of st. ronnie, in '86.

of course, as i've noted before, st. ronnie wouldn't be welcome in the republican party today, but i digress.

Why don't we all just agree that we need to eliminate taxes? Why the heck should we pay our bills, when we all have children and grandchildren who can pay them for us? So, let's propose eliminating the income tax, and changing Social Security to a borrow as you spend program.

I sometimes think I will forever wander the face of the earth looking for just one politician from any party willing to stand up for the principle that we citizens need to pay for the government we need.

Eliminate the corporate tax and replace it with a corporate or business gross receipts tax (CGRT) . Add up all your revenue from product sales, asset sale, real estate, stocks etc, then pay a simple flat rate based on your industry category. the rate for Law firms may be different rate than manufacturing. Someone a lot smarter than me can figure out what those rates should be.

This is a case where we need to not let the demand for perfection prveent us from championing something.  Wyden's plan is far from perfect, but it is orders of magnitude better than anything that the Right is proposing.

Full disclosure:  I'm a CPA with a master's degree in taxation, and therefore have a vested interest in the tax code retaining mind-numbing levels of complexity...

That said, I do believe that simplifying the individual tax code is a very worthy goal, both practically and politically.  But, the devil is always in the details.  Much like the social security system, I think the existing tax code should simply be tweaked to make it more straightforward for the 95% of this country that doesn't have to deal with 99% of the tax code.

However, the Wyden plan concerns me a bit.  From a purely political perspective, titling it a "flat tax" plan makes me very nervous.  I am fundamentally opposed to a strict flat tax system because by definition, it precludes the use of the US tax system to encourage (or discourage) certain policy goals.

There is plenty of merit to the home-mortgage interest deduction, for example, because it uses federal tax policy to encourage home ownership, which I think everyone agrees is an admirable goal and worthy of government subsidy.  The AMT (although long overdue for adjustment) also achieves an admirable (to me) policy goal -- ensuring that everyone pays their fair share of tax, no matter how rich the taxpayer or how expensive his/her CPA.

Any fundamental change to the US tax code will undoubtedly create big winners and big losers.  Thus, understanding the details is vital.

it precludes the use of the US tax system to encourage (or discourage) certain policy goals.

This is exactly the problem with the tax code.  Taxes are collected to pay for the services required to run our government.  They should not be used to modify behavior.  We can all think of laudable goals that should be encouraged.  It would be wonderful if more people brushed their teeth regularly.  However it makes no sense at all to give teeth brushers extra tax deductions in the hopes that it will create fresher breath.  Pretty soon every congressman with a hairbrained scheme for improving society wants to add it to the tax code.  Stop trying to make people behave in ways that you think they should.  Freedom is about choice.

These "savings accounts" are stupid ideas, too.  Why should I have to predict how much I need for medical bills next year?  And why should I lose any money that I don't spend?  If medical and education expenses should be paid with untaxed money, then offer credits AFTER the fact when I know how much I spent.

My idea for simplification is the graduated flat tax.

First 20k for each person is the standard deduction (40k per couple)
Next is an additional 10k for anyone with kids (no matter how many)
Total possible deduction of 30k for single parents and 50k for married w/kids
Then 5% tax on the next 20k earned,
10% tax on the 20k above that,
15% tax on the 20k above that,

and so on and so forth.  Obviously the numbers are adjustable but the idea is that everyone gets the same deduction and pays the same rate on their first taxable dollar and the brackets increase with income earned.

What do you think?

Just Karl:

The Dem's would be foolish not to follow your idea of a graduated tax system.  I would only add to it by stating that during the first couple of years we'd give people the option to use the traditional tax code or the graduated code.  That would further serve to defang the defenders of the current system who might try to claim that an abrupt shift would throw the system into shock.

The R's took the D's idea of a Dept of Homeland Security and made it there own.  If the D's coopt the tax reform issue of the R's it would be a great achievement.  Especially since it deals with the federal budget, but doesn't focus on the Democratic stereotype of being big spenders.

The IRS needs to be fixed before any tax reform takes place. 
Our tax collection system is broken and is blatantly unfair to the honest citizens of this country.

Charlie Rossotti, the last IRS commissioner, talked about the problems in the New York Times on his way out the door. In his book, he likened the IRS to a police department that hands out parking tickets while organized crime is rampant.

In a November 2002 NYT story, Rossotti said that the IRS audit staff shrunk almost 30% since 1995. The IRS had pursued only 17,000 out of an identified 82,000 taxpayers using offshore accounts to evade income taxes.

Mark Everson, the current commissioner, acknowledged that the IRS has little money and has weak legal tools. The enforcement IRS budget is only $550 million. Everson said that Congress repeatedly refuses to fund more investigations.

In a March 2005 story, the NYT reported that Walter Anderson, the biggest known tax cheat in US history, only got caught because someone turned him in. Even then, the IRS had reason to believe that Mr. Anderson had more income than the $450 million it picked up.

I'm a CPA and, as an experiment, I didn't file couple of returns to see what would happen. I don't owe money, just the reverse. But the IRS doesn't know it.  Five years later, nothing has happened. I get the occasional notice and that's it.

I know if the IRS ever presses me, I can negotiate a settlement. Create your own tax rate!

If I ran the IRS, I'd focus on strengthening the reward program and I'd make it available overseas. Most people don't know that if you turn in a tax cheat, you are entitled to 10% of a subsequent assessment. 

The FBI has spent a lot of time and money investigating money laundering in the Carribbean. If the FBI could guarantee that information would be processed quickly and confidentially by the IRS, people in the Carribbean would be turning in tax cheats like crazy. The FBI could go to the beach and drink pina coladas.

As a symbolic gesture, I turned in a phony real estate deal to the IRS because Charles A. Gargano, vice chairman of the NY Port Authority and president of the Empire State Development Corp., was a participant. I did not try to claim a reward but I should have.

I was angry because Gargano, while on the public payroll, was a director of phony, penny stock company when, in April 2001, it bought an Italian company that made bombproof doors.
The company, Eagle Building Technologies, then tried to swindle the federal government out of $50 million after 9/11 by falsely claiming to have cargo scanning equipment, mail sterilization equipment and money laundering software. 

Why should a public servant and a very rich man like Charlie Gargano cheat on his taxes while I pay mine?

If Congress won't fix the IRS, I have other ideas to level the playing field for the average taxpayer. 

I'd start a grass roots organization to teach people how to form limited liability corporations (llcs) and take advantage of tax breaks offered to businesses.

I'd show people how to take aggressive tax positions and explain how little risk was involved. 

I'd lobby Congress to repeal mandatory withholding laws so the average taxpayer could manipulate his income to his own advantage. We'd all find out pretty quick, too, how slow the IRS is to collect overdue taxes.

Honest taxpayers are being swindled out of billions of dollars in lost tax revenue.  Fix the system if you want real tax reform.