Sunday, June 17, 2007

RE: $4.5 BILLION computer cant decipher 5.8million word Tax Code

----------------- Bulletin Message -----------------
From: FREE FALL (Space Beam)
Date: Jun 16, 2007 12:36 PM


Theft By Deception









Starting Over
Roy Blunt
U.S. House of Representatives
Missouri 7th District
The most honorable way to revamp the income tax code is to sunset it out of existence and start over with a clean slate

In 1913, Congress and the States created the federal income tax to pay for America’s growing federal government and its new leadership role in the world. We started with a 30-word constitutional amendment (the Sixteenth) and a four-page form for the collection of graduated income taxes. The lawmakers who wrote the initial income tax law had little idea what it would become today.

With a $20,000 exemption, most Americans (98 percent) didn’t have to pay any income tax while the wealthiest paid from one to seven percent in taxes when the new income tax started. By the late 1970s, Americans in the top tax bracket were paying more than 80 percent of their income to Uncle Sam. Today, the highest marginal tax rate is just less than 40 percent; 54 percent of all federal income tax is paid by the top 20 percent of wage earners; the 20 percent who are the lowest wage earners pay six percent. The tax code has become a monster.

Virtually all businesses, large and small, have a tax accountant to safely maneuver around the pitfalls of the IRS code. But the code is so complicated, even the experts fall prey to its tricks and turns. We spend an estimated 5.4 billion hours a year and $200 billion trying to comply with a code that is incomprehensible. That is more than it takes to produce every car, truck and van in the United States.

The Internal Revenue Service, which was created in 1913, is now the largest single agency of the federal government with more than 135,000 employees which nearly equals the entire population of Springfield, MO, the Congressional district that I represent in Congress.

The American income tax code is perhaps the world’s most revised, lobbied and despised document_ Every year, it seems, it is rewritten. In 1997, more than 200 changes were added. Most professions, industries, income groups, crafts and special interest groups have their own tax niche in the code. It is no wonder that lobbyists watch every change in the tax code microscopically to determine its impact on their turf.

Nothing would eliminate special interest lobbying more quickly than eliminating the current tax code.

If the tax code were based on simple principles rather than intentionally complex legalese, those companies, professions and interest groups would lose their special tax treatment, and therefore, be subject to paying their fair share of the tax burden. A tax code that rewards savings, taxes everyone fairly, is simple and understandable, but does not raise more taxes than the federal government gets now – should be our goal. We can only achieve that by eliminating our current tax code.

The only way to end the IRS as we know it is to eliminate the existing tax code. The current tax code is the evolutionary work of Congress. It’s the job of Congress to fix it. The fairest, most honorable way to revamp the income tax code is to sunset it out of existence and start over with a clean slate. We can then set to work on designing a tax code based on simple principles that every American can understand.

That is impossible today. The tax code is 5.8 million words long, covering 7,000 pages of tax law and 5,000 more pages of interpretations of the first 7,000 pages. The IRS prints 480 different tax forms and more than 280 brochures on how to fill out the forms. The 1040EZ tax form, the least complicated personal income tax form, requires 33 pages of instructions. NO one understands – not even the employees at the IRS who are supposed to enforce it – all the aspects of the American income tax system. It is so cumbersome, dense and complex that it is beyond comprehension. A new $4 billion IRS computer system was declared a "failure" because it could not decipher the tax code.

The IRS has built its reputation of fear and intimidation on the ever-changing tax code. The tax code is like quicksand. You are on solid ground one day and sinking the next. Case after case has been documented to show that IRS tax interpretations are ever-changing and often inconsistent. What is legal one year may be declared illegal the next year, and made retroactive creating years of back tax liability!

Senate hearings in 1997 showed the IRS targeting those least able to defend themselves against egregious fines and improper conduct by the IRS. In fact, the IRS gave bonuses to agents who did the best job of collections, without regard of their tactics or principles.

Tax court is the only civil court where a person is guilty until he can prove he does not owe the taxes the IRS claims.

Reforming the way the IRS collects taxes is coming from both inside the IRS and the Congress. Twenty-eight new "taxpayer rights" have been approved by the House. Most notable are new safeguards that shift the burden of proof from the taxpayers to the IRS about taxes owed. Another provision allows the taxpayer to recover legal fees in fighting frivolous IRS claims. Reforming the IRS may solve some problems, but until the code is replaced with a simple, fair alternative there is little hope of getting the "little guy" out from under the IRS’s guns.

More than 40 percent of the $13 billion in proposed tax fines were dropped in 1996 when challenged as excessive. It is normally the wealthy who have the resources to challenge the taxman. So, middle Americans are being targeted to pay. Is it any wonder that most people would rather pay than fight the IRS? We can never cure these kinds of abuses as long as we have the current tax code. Despite Congressional efforts to make the IRS more professional and user-friendly, it is more likely the agency will stay entrenched and hide behind a tax code that is neither fair nor understandable.

The tax code is 5.8 million words long, covering 7,000 pages of tax law and 5,000 more pages of interpretations of the first 7,000 pages. The IRS prints 480 different tax forms and more than 280 brochures on how to fill out the forms. The 1040EZ tax form, the least complicated personal income tax form, requires 33 pages of instructions.

I’m co-sponsoring the Tax Code Termination Act (HR 3097) which sunsets the federal tax code as of Dec. 31, 2001. We need to debate real tax reform, not just patches to the existing system. The tax code is hopelessly broken and abolishing it is the necessary first step to debating, designing and adopting a simple and fair replacement tax system. Under the Tax Code Termination Act, today’s oppressive tax code would survive for only four more years, at which time it would expire and be replaced on Jan. 1, 2002, with a new tax code that will be determined by Congress, the president and the American people.

Admittedly, scrapping the existing tax code and replacing it with a better system is not a simple task. However, four years is plenty of time for the nation to collectively decide on a new tax system. Having a date certain to end the current tax code will force the issue to the top of the national agenda, where it will remain until Congress and the president finish writing the new tax law.

Between now and 2002, we need to continue eliminating unfair parts of the current tax code. The "marriage penalty," death taxes and taxes on sales of property and stocks not indexed to inflation are wrong. We should knock a few of them off while we debate the kind of fairer, simpler tax structure that we want to take into the 21st century.

If Americans truly want tax reform, it must begin with the creation of a new tax system based on principles, not the ability of lobbyists with armloads of campaign contributions to sway congressional opinion. LL

SPECIAL BULLETIN

The Tax Code Elimination Act passed the U.S. House of Representatives Wednesday, June 17, by a vote of 219 to 209.


http://www.landlinemag.com/Archives/1998/July_August_98/julyaugust98.html

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