Deficit Crisis Threatens Once-Untouchable Tax Breaks

In reading the article, I got an idea. Why not consider what is called a simplified Graduated Income Tax with no deductions or exclusions. Currently, our tax code is too complex for an average individual to understand it, and it is gamed with loopholes. The current system favors a larger IRS, and the multitude of tax lawyers and accountants, and of course the well to do who can afford to hire these people.

Simplifying it to a simplified Graduated Income Tax would eliminate the long form 1040, and virtually all would fill out a one page tax return form. This would virtually eliminate the army of tax preparers, tax lawyers and tax accountants that we have to hire every year to do tax returns, which is a huge waste of money.

Other countries already have such a Simplified Graduated Income Tax system, and it works. Of course the displaced who used to have to working on clients tax returns will have to find some other areas of work, but so be it.

Of course, some special interests, like the Real Estate lobby, and others would be hurt by such a move, so I would propose a five year rule of phaseout of these deductions and exclusions (e.g. for Home Mortgage Interest, the phaseout in the first year would be 20 percent of mortgage interest deduction, the second year being 40 percent reduction, etc). That way the markets can adjust accordingly over the long term.

In exchange for a Simplified Graduated Income Tax, overall tax rate percentages will also be reduced, and would be much more fair to low income people. And more revenue would be raised by the Federal Government by easier tax compliance and an increased Tax base.

Write your Congressman and the President on this one. I think this idea is a winner.

Henry G. Huestis of WA 4:00PM May 21, 2011