Subject: Residential Real Estate Management
Comment: Mark A. Pearson, M.A.
777 E. Haney Road
Carbondale, IL 62901
Mr. Chairmen and Panel Members:
As a relatively successful individual I have been essentially forced by the myriad rules and
regulations of the U.S. Tax code to have a business. The bizarre Byzantine rules of the tax code
necessitate having some type of business -- other than my primary employ ot "protect" some of the
income I manage to garner. I have chosen to purchase and manage several rental units/homes.
While I enjoy many aspects of my part time business, the countless hours in file management and
tax preparation seem a terribly high price to pay for the privilege of paying taxes. The current system
encourages me to make day to day business decisions, such as borrowing money rather than using
available capital, repairing rather than upgrading/remodeling a property, which I might otherwise make
differently if I was attempting to maximize my return on each property rather than offset money earned
in other endeavors.
So many of the 55,000 pages full of rules seem completely arbitrary, designed obviously not to
promote productivity (which all governmental policies should do), but to reward a select population of
constituents of some congressperson. (In all likelihood one who is no longer in congress, maybe not
even living, but the UnAmerican legacy of Income Taxes lives on). Each year trying to accurately and
appropriately all the forms and formulas required to just complete the process is nerve wracking and
extremely wasteful of time and energies. Knowing that even the "experts" at the IRS given identical
situation "get it wrong" about half the time, leaves me perpetually concerned as to my choice of guiding
instructions and directives.
As you know, the Founders for the most part were small businessmen and coming from that mindset,
they specifically prohibited income taxes as it is damaging to production and productivity. As, I believe,
a Supreme Court Justice long ago opined, "the power to tax is the power to destroy." The current
system clearly destroys many things including productivity, entrepenurialship and individual initiative. It
also creates fear of the IRS. For example, I have kept my business small enough to do all things
more-or-less myself. If there were no Income Tax and the withholding it entails (and the rules and
regulations waiting to trip up the small businessman), I would have at least one employee full time and
periodically would probably create multiple jobs for certain projects which now either languish or are
just not created.
The FairTax (Currently HR 25/S.25), which I have studied extensively and, I know, you have been thoroughly
briefed on, would allow me to expand my business, create and complete more and more housing in the local
market, hire employees and allow me to do so without having to fear the IRS for some error of omission or
commission by myself or an employee in withholding/record keeping otherwise not related to the business endeavor
of Residential Property Ownership/Management.
As most Americans I do not object to paying for the services of Government, I do object to the unconscionable (and
until the 16th Amendment, Unconstitutional) Income Tax. Whatever Tax System we adopt it should not attempt to
micromanage the lives and thinking of citizens to the point they distort day to day and business decisions.
I appreciate this opportunity to present some of my specific concerns regarding the current system and my support for
Mark A. Pearson, M.Ay aspects of my part time business, the countless hours in file management and tax preparation seem a terribly high price to pay for the privilage of paying taxe