Subject: Comments Comment: April 25, 2005 Dear Panel Members: The U.S. is harming our nation, internally and in global competition in the world marketplace, by its current federal tax code. Not only must our goods and services be competitive measured on a world standard, but our system of taxation must enable our citizens to effectively enter that playing field. That is, it must be a positive catalyst for America. Without hesitation, I advocate a flat tax system. I do not support a VAT system because, as in the UK, I fear that VAT will simply be posted on top of an attempted repair of the current system, so as to increase overall tax burden and compliance. In global commerce, a simple and predictable tax system (to say that a tax system is ever fair is pollyanish – human nature does not like taxes, of any kind, but the practical side is we must have a tax system; predictability and simplicity should be the watch words, along with encouraging growth in the U.S. including favorable conditions for attracting world capital and giving Americans a level playing field in the world marketplace). I believe that most Americans want to pay their fair share of taxes provided that all Americans of similar income makeup do. Capital attraction to the U.S. should be an overarching goal. And, recognition should be given to the fact that traditional manufacturing is fluid, following the lowest cost of labor and efficiency, and, therefore, no longer reflects the U.S. business base, say, as was in 1954. A flat tax system arguably contributed to Hong Kong’s remarkable rise pre-unification as the pearl of the orient. Similar results have recently been noted when adopted by formerly little regarded countries for economic growth. The same structure, generally speaking, applies to sales tax, of which most states including Texas have long had. It is an efficient system, even though occasionally we fuss about its adding to the price of buying essential items. I would propose a phase-in with segments. For example, perhaps beginning with individual tax portions of the Internal Revenue Code, for which I do not believe that the transition expense to a flat tax system would be painful – indeed, I believe that, apart from the possibility of cries of spoiled whining from certain special interest groups losing deductions and exemptions and the power that comes with the same, Americans would welcome a flat tax that could be completed in a few lines (in fact, that was the format for the original income tax return form in the early 20th century, original being euphemistic since the first income tax was during the Civil War). Most Americans were early on relatively unaffected by paying the tax, and it was a gentle burden, time- and cost-wise. Then the thorny phase-in of business and entity taxation could be tackled, which admittedly will take more time. The common adage, however, is still true: the majority of taxes are paid by individuals, and the standing aphorism is that corporations don’t pay tax, they just pass it on to consumers. Thanks you for your time and opportunity to comment. Best regards. David Batson batson@itexas.net Stephenville, Texas 254/918-7400 |