subject: Characteristics All Taxes Should Have [print this page] Doing your taxes every year is hard enough as it is, but when having to figure out the different laws when it comes to the hierarchy of government is just ridiculous. All levels of government throughout the country should implement laws that work together seamlessly.
This will avoid confusion and frustration on the part of taxpayers, and should make it easier for the accountants counting and regulating the money paid to the government. Here is a list of characteristics that all taxes - in every level of government - should have.
The first characteristic is transparency. The problem with a lot of laws is that average people who don't work in finance or law have no idea what the policies actually are.
This dilemma is greatly frustrating; people don't like giving away their money when they don't know why they are giving it away. Though the complex jargon may make sense to the IRS, it doesn't compute in the mind of everyone else.
A good system needs to inform the taxpayers of what is going on; what are the laws, why, and how much money needs to be paid? This may mean eliminating jargon and/or doing better at explaining the tax system and how it works.
It should be clear to taxpayers who and what is being taxed, and how tax burdens affect them and the economy. Tax legislation should be based on careful economic analysis, and legislative procedures should include open hearings with ample opportunity for the public to comment.
The next characteristic is neutrality. The fundamental purpose of taxes is to raise necessary funds for governmental and public programs like law enforcement officials, public schooling, hospitals, etc.
They should not be used for subsidies and penalties; because that is not what they were intended for. The tax system's central aim should be to collect the money necessary without interfering with the decisions of free citizens.
The common phrase "less is more" describes exactly how taxation policies should be applied to this country. The key is simplicity.
The tax system should be as simple as possible. The burden of tax laws is a negative cost on society with its complex taxes that create perverse incentives to shelter and disguise legitimately earned income.
In addition to simplicity should be stability. Tax laws change all the time, making it hard to keep up with all of the new legislation.
If citizens are not aware of the ever-changing laws - that are not publicized very well - then they will never know what to do come April. These laws should be stable and firm; not flexible.
Changes in tax law should not be retroactive. Taxpayers should be able to rely, with confidence, on the law as it exists when contracts are signed and transactions are made.
People should not be fearful of enormous fines for making a mistake that they didn't know they committed because the laws were not very clear. Taxes are not supposed to be penalties; they are supposed to be supplemental cash that helps finance public goods and services.
There should also be low rates and broad bases. It makes a significant difference of how large a share of national income is taken by government in taxes.
The private sector is the source of all wealth and improvements in the standard of living. Taxes should consume as small a portion of national income as possible and should be broadly based so that tax rates can be moderate at all points.
The current federal individual income tax system ignores more than half of all income, mostly so that politicians can curry favor with voters. The result is high tax rates on the remaining income.
In order to be fair and increase capital, international trade should not be inhibited. The IRS should not penalize or subsidize imports, exports, U.S. investment abroad or foreign investment in the U.S.
The United States' tax system must be competitive with those of other developed countries.
Taxes on corporations, individuals, and goods and services should be comparable to other nations.
by: Jack Landry
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