Dan Pilla, author of the Heartland-published Ten Principles of Federal Tax Policy, discusses the current tax system in the United States and how it does not follow any of the ten principles laid out in his book. Pilla is a taxpayer’s rights advocate and has defended countless tax payers against the IRS. He helps individuals and businesses who struggle with our tax problems, which are plentiful.
The first principle is simplicity, which our tax system is most certainly not. The tax code now consists of about four million words, which is three times the amount in the 1970′s, and twice the amount of the 1990′s. That doesn’t scream “simple” to me! Also, there have been more than 3,200 tax code changes between 2001 and 2008, with 500 of them being just in 2008. Nobody understands the tax code, not even the IRS.
Our current tax system creates criminals out of law-abiding citizens. Pilla says most people are trying to abide by the law and follow the tax rules, but they get tripped up by the complicated mess of the system. When you’ve got two different tax analysts telling you two different things, plus two IRS agents who tell you two different things, how are you to know what is correct and incorrect? Last year alone there were 37 million penalties issued by the IRS- and there’s only 130 million tax returns filed! That means 28% of people who filed tax returns were penalized… Scary stuff.
Another principle that Pilla discusses is stability. He says Americans have a right to know that their tax system will remain stable and consistent this year, and for years to come. This is important because every American is affected by the tax code in every part of their lives. Every decision made has tax consequences- to marry or not to marry, to have children or not, to take a raise at work, planning a business, and planning retirement.
The bottom line is the income tax and liberty cannot coexist. Which one are you willing to live without?
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