Compare the FairTax, the Flat Tax and the Income Tax
Part 2 - Complexity

Current Income Tax: Very complex. 20,000 pages of regulations.

IRS incorrect over half of the time.
Flat Tax: Withholding continues.

Individuals and businesses must still track income and file income tax forms.
FairTax: Individuals do not file.

Businesses need only to deal with sales tax returns.

The current tax code is extremely complex. It’s been revised over 9000 times in something like ten years (I might be wrong about the number of years, but I'm not too far off). The code is so complex that not even the tax “experts” at the IRS understand the code. More and more people go to tax preparers every year. It’s gotten so complex that those of us who want to file our own taxes could miss deductions or fail to declare some type of income.

Most people think that having a mortgage is beneficial when filing income tax. After all, you can deduct your mortgage interest from your adjusted income. Well, it’s become known that most people end up using the “standard deductions” because they didn’t pay enough in interest for it to make a difference to them. When I had our taxes done recently, my CPA told me that even with all we paid in medical expenses and mortgage interest didn’t bring us up to the standard deduction. In other words, if the FairTax were imposed tomorrow and we lost the mortgage deduction, it wouldn’t make a difference to most of us in the “middle” and “lower” classes. It might make a difference to people who are paying mortgages on hundreds of thousands and million dollar homes. To the vast majority of us, that deduction is not worth the paper it’s written on.

The Flat Tax is simpler, but you still pay a tax and file a return and you still have money withheld from your paycheck.

There would be no Federal taxes withheld from your paycheck under the FairTax. Under the Fair Tax, you get your whole paycheck (less deductions such as insurance and union dues). Businesses would not be required to keep track of amortization of equipment and inventory. No need to keep track of capital gains or profit on sales. Businesses would be in the “business” so to speak, of collecting sales tax, which most businesses already do. It would be simply another line of code in the software, or another line on the sales receipt.

The FairTax. Everyone pays the same amount. It's based on lifestyle, not earnings and it's simple. You buy and item and the tax is listed right on your receipt. Unlike now, there are hidden taxes that you don't see.

For more information, go to www.fairtax.org

You'll be glad you did.