Friday, April 29, 2016

IRS Admits Tax Code Is Too Complex to Enforce

From the article:
Even the IRS admits that "the complexity of the tax code makes the tax law too difficult for taxpayers to understand and for the IRS to administer."
One way to simplify the tax gap would be to move toward a flat consumption tax. As explained by Curtis Dubay, a research fellow in tax and economic policy at The Heritage Foundation, by incentivizing saving and investment, a flat consumption tax would increase economic growth by up to 15 percent in 10 years. Such a tax could be realized without affecting the overall distribution of the tax system, a common criticism of flat consumption taxes.
A flat consumption tax would also reduce the tax gap and ensure that people pay the correct amount of taxes. The simplicity of a flat tax would help taxpayers understand and voluntarily comply with the tax code and limit opportunities for tax evasion. A flat consumption tax would stimulate the economy and reduce the tax gap, all without affecting the overall distribution of the tax code.

I'm not a tax expert by any stretch of the imagination.  However, I'm guessing that efforts to reduce complexity, reduce government control and intervention, reduce the size of a huge government bureaucracy would be steps in the right direction.
This article is from the Heritage Foundation and it offers a more detailed solution here:  Heritage's Blueprint for Balance details many more specific reforms to limit government waste and limit the federal government to its proper scope.