Wednesday, May 5, 2004

Collins: Current U.S. tax code must be replaced As millions of Americans have just filed their tax returns before the April 15 deadline, U.S. Rep. Mac Collins said this proves again that America’s tax code must be replaced with a “fair tax” that would end all federal personal income taxes, gift and estate taxes by replacing them with a consumption tax on all retail sales of new goods and services. “The U.S. Tax Code is one of the longest and most complicated documents in the world,” said Collins. “Each year American taxpayers are forced to spend countless hours wading through forms which are difficult to understand. These forms force taxpayers to commit errors, and then the IRS penalizes taxpayers for their inability to understand.” A new study released recently by the National Taxpayers Union quoted federal government officials as estimating that the average taxpayer will spend 28 hours and 30 minutes to prepare the 1040 “long” form with the three common Schedules A, B, and D, an increase of 34 percent since 1995. Even the simplest Form 1040EZ tax return takes 3 hours and 43 minutes to complete. In addition, the short form, at 48 lines, has double the number of lines on the 1945 version of the standard 1040 tax return. Today, taxpayers must wade through 131 pages of instructions for the standard 1040 form, which is more than triple the number in 1975 and over double the number in 1985, the year before taxes were “simplified.” The growth rate of returns prepared by tax professionals reached a record 62.1 percent (as of April 2 of the current 2003 tax year), this shows that the tax code has become an enormous burden to hard working taxpayers. The government should simplify not complicate the process. “It is amazing to me,” Collins said, “that the entire tax code is twice the size of both ‘War and Peace’ and both testaments of the Holy Bible combined.” Collins is the only member of the House Ways and Means Committee to call for hearings on Rep. John Linder’s (R-Ga.) “Fair Tax” legislation. “The Fair Tax replaces the way we are currently taxed, which is based on our annual income, with a tax on goods and services. The Fair Tax is a voluntary ‘consumption’ tax. The more you buy, the more you pay in taxes. The less you buy, the less you pay in taxes.” The Federal government will continue to be fully funded, including Social Security and Medicare. Collins thinks the nation’s current tax system is a nightmare for Americans. “Uncle Sam should stay out of people’s wallets. People should be able to keep more of what they earn. I trust people can spend their money better than the federal government. “I strongly support making the tax cuts, that the President has signed into law, permanent,” Collins added. “It is plain to see how these tax cuts lessened the negative impact of a possible recession. It is plain to see making these cuts permanent will help America stay strong as an economic leader. We need to make these tax cuts permanent so that Americans have the ability to plan for their future. You can’t plan your estate and you can't create a long-term business strategy when you know this major tax liability is looming over the horizon.” This year, Collins received the “Hero of the Taxpayer” award from Americans for Tax Reform and the “Spirit of Enterprise” award from the United States Chamber of Commerce.