Subject: Tax Reform Comments.doc Comment: Response to request for comments by the Federal Tax Reform Panel on Feb. 16, 2005 Don Martz Marietta, Ga. March 1, 2005 Individual Submission to Federal Tax Reform Panel 1. Physical Burden: The complexity of the current system is overwhelming. Citizens who comply with the law are forced to engage in extensive accounting and record keeping throughout the year and then spend many hours deciphering complicated instructions, which change every year, in order to prepare their returns. One alternative is to pay a tax preparer several hundred dollars to do this for them. These are tremendous wastes of resources. The total compliance costs to this country must be staggering. Costs to businesses, and in turn, the prices of the goods and services they sell, are surely higher as well. 2. System is Unfair: The current system punishes productivity and rewards the lack thereof. How is a system that discourages ambition and hard work good for America? There exists a huge disparity in the rate at which different people are taxed in this country, with the largest burden falling upon those who provide the most growth to our economy. If my neighbor makes twice what I do why does he pay 5 times the taxes? Why not twice? If people know they get to keep more of the money they earn, they will work harder and smarter. Also, it doesn’t seem fair to collect taxes from one person only to turn around and give that money to another person in the form of a “refundable tax credit”. Just as our justice system is blind, so must our tax system not discriminate. 3. Tax Code’s Effect on Important Decisions: When considering a part-time job for my spouse, the resulting higher marginal tax rate made us decide against it. The supply of labor for that job was made smaller by that decision. The demand did not change. The job must now be filled at a higher price to the employer. That is not efficient. 4. Reform Goals: • Simplify the System so that the average citizen can complete their return in under an hour with no outside help and safeguard the system against future complications. • Remove burden of continuous record-keeping. • Remove penalties on productivity - make tax rates more proportional to income at all levels. • Remove deductions that apply to only certain individuals or groups. |