Just in case you're confused or not American — the Tax Cuts and Jobs Act of 2017 (President Donald John Trump's substantive tax cuts bill passed at the end of 2017) applies to next year's taxes, or Tax Day 2019. Tax Day 2018, which covers the taxes for calendar year 2017, isn't changed by the legislation.
If you look at the KoopaTV article on that tax cut legislation, you'll read in several places me bemoaning that it's not the FAIRtax, which is a national retail sales tax that replaces the income and payroll taxes. For a little more information, take a look at this quick video:
For a lot more information, including FAQs, lots of research (the FAIRtax is said to be the most researched tax legislation in the history of humanity), and more, check out the FAIRtax website at fairtax.org. (Note their use of the best top-level domain.) Meanwhile, I'm going to spend this article telling you why I think the FAIRtax is the best tax plan and what America needs — and if implemented, there will never be a Tax Day ever again.
Update April 17, 2018: The IRS payment systems glitched up and people couldn't actually pay the IRS money today, so they're extending Tax Day to April 18th. I mean... they're making our argument for us that they should be abolished. /end update
What's wrong about the income tax
Let's review the facts. First of all, the existence of Tax Day to begin with is because of the income tax. You need to fill out a form to the Internal Revenue Service reporting all of your sources of income. If you don't do this in time, you're in trouble. If your information is incorrect, you're in trouble. If you don't understand the extremely complicated rules surrounding taxes, you're in trouble. You can hire an accountant, if you want, but those are pricey compliance costs.
You're working all this time, all year, only for a lot of it to not matter because the government decides that it's entitled to your income, and therefore entitled to know how much your income is and where it comes from. The fact that next year they'll be taking less of it doesn't change the fact that the government is still picking your pockets, and is invading your privacy by knowing your life's work. And they do this for everyone. Total police state.
|Government bureaucrats invading your privacy and your wallet.|
TAXATION IS THEFT!
(Image credit: 9-9-9 the Movie by Herman Cain.)
And if they decide that isn't enough, they can arbitrarily audit you by the force of a gun! And if you doubt the capability for the IRS to ruin and abuse INNOCENT PEOPLE's lives, go watch “Unfair: Exposing the IRS” sometime. Probably by DVD at this point. Maybe you can stream it somewhere, or get it from your library. The point is that this isn't just my paranoid moanings. It can happen to anyone doing something even perceived as slightly out of the ordinary, like adopting a kid from a foreign country or starting an action group.
It's important to note why the tax code is so complicated. For the past one hundred years (note that the income tax didn't exist before then, and the United States was doing pretty fine), politicians greatly expanded the thing to tax more and more people's income (to get more and more information and dirt on them) and tried to socially engineer the population or give kickbacks to their big donors and interest groups in the form of specific tax deductions, subsidies, and credits.
The complicated nature of the tax code even scares businesses from other countries away. Two years ago, I gave the story about how Nintendo could have been frightened from doing digital downloads because of how nutty the tax code is. Gaming would be a lot different today if that happened. Speaking of which, no, even gamifying the tax forms won't make the income tax morally right. Taxation is theft.
What's right about the FAIRtax
|I'm telling you it's fair.|
You get to decide whether or not you agree.
(And you better agree!)
The IRS is the starting point for all other government abuse. A flat tax would get rid of the favours politicians dole out to special interests, but it would not get rid of the IRS. Only the FAIRtax would do that. The FAIRtax, if enacted, would be collected for all new purchases, by the retailer or services provider, and then the retailers/state governments would hand that off to the federal government's Treasury Department like the state-level sales taxes are currently collected today. No more IRS. No more audits of taxpayers. (If a business is trying to commit tax fraud, that's easier to identify since there are less businesses than individual taxpayers. Also, there is a monetary incentive in the FAIRtax law that reimburses businesses/states for the compliance costs of remitting money to the Treasury.)
Since there are no income taxes or payroll taxes with the FAIRtax, you would get the full value of your paycheck. You shouldn't be worried about how you'll pay for a new sales tax, because you'll have much more money to spend with.
PLUS, there is a monthly prebate, calculated by the poverty level and the size of your household. The idea is that you'd get money to off-set the sales tax on essential goods up to that poverty line, so it's actually a progressive tax (rich people pay a higher percentage than poor people, who could pay zero or even negative). Without this critical feature, you'd run into the common rebuttal that sales taxes hurt the poor far more than the rich because they spend a greater percentage of their total income, and this is undesirable. With the prebate, that's thoughtfully taken care of.
The benefits of enacting the FAIRtax would be wonderful for America. Compliance costs and time wasted on income taxes would be freed up. You would no longer be depressing productivity or capital formation, so you'd get economic growth — higher wages and more jobs. The government wouldn't be picking winners and losers.
And then we never would need to have this discussion again. KoopaTV could write about non-tax stuff on this day next year!
Be sure to write to/call your Congress person in the House of Representatives (look up who they are here) and your two Senators and tell them you want the FAIRtax! After all, President Donald John Trump has already spoken of there being a “phase two” for tax reform. Let the FAIRtax be that phase two! There's a will and a way!
It's a fact of life that no one comes to KoopaTV hoping to read about tax policy, but it's important to discuss this subject every year because it affects so much more than you probably realise, including the stuff that you would rather read about like videogames. Don't ask what Koopa Kingdom's tax policies are — they're nothing like this. If you're not an American, your takeaway is that America's tax system has the potential to kick your tax system's ass, if only the government were to do the right thing.
KoopaTV would rather distribute untaxed money to its employees as a bonus rather than mere tax savings.
Unfortunately, 2018 isn't the last tax day, because there's 2019's.