Issues > Taxes

The average American spends 28 hours preparing his annual Federal Income Tax return, at a nationwide cost of 6.5 billion hours and $130 billion in expenses. Each individual is expected to understand and navigate a Tax Code that now stands at over 60,000 pages long, with over 500 different kinds of IRS tax forms available. 62 percent of Americans hire tax professionals to do their returns for them.

Our federal tax system takes not only a chunk out of our earnings, but out of our time as well. It is such a chore that a majority of us are willing to spend even more money simply to avoid the time and risks of tackling the job personally. Between payroll taxes and withholding, and professional tax preparation, we find ourselves ever further distanced from our own earnings, even as they're taken from us.

There is another loss inherent in our tax system, but one that is less appreciated. It is a loss of privacy. The Department of Homeland Security may be the federal agency most associated with privacy violations, but there is every likelihood that the IRS has a larger file on you than Homeland Security ever will. They gather that information by requiring you to file a report on yourself on an annual basis. The more personal information you're willing to report, the more money they will let you keep. And last year, 1.2 million Americans were subjected to IRS audits, where your private life is ripped open and sifted through by tax enforcement agents.

For all these reasons and more, America needs and deserves a tax system that is less costly, less complicated, and less instrusive. I believe the FairTax, the national retail sales tax, is a step in the right direction. It is not a perfect proposal, and there are certain aspects that I would want to see addressed and fixed before giving it greater consideration. But it nonetheless stands as a first draft upon which we can build a better system of collecting taxes. One which does not depend upon a government agency that audits and examines the lives and incomes and expenditures of 200 million Americans.

One possible consideration should be the end of income tax withholding. Withholding was introduced in 1943 as a means of collecting revenue more quickly during wartime; it simply failed to end when the war did, over sixty years ago. The practice of withholding creates a distance between the taxpayer and his taxes paid, and numbs Americans to the amounts they pay each year. It is an interest-free loan to the federal government if they take too much, and an invitation for penalties if you allow them to take too little. Withholding is a relic of a war that is now a half-century gone, and a practice that benefits the state at the expense of every taxpaying American.