Individual response to request for comments by the Federal Tax Reform
Panel on Feb. 16, 2005

Robert A. May, Jr

1521 S. Staples #803

Corpus Christi, TX 78404

Robert A. May, Jr

23 February, 2005

Dear Madam or Sir:

Thank you for allowing this opportunity for citizens to comment.

As I see it, our tax system has developed piece-meal into an
unmonitorable and unmanageable juggernaut. Taxes are necessary for any
modern government to exist, but the system of taxation should be
efficient, fair, minimize negative effects on taxpayers and the economy,
be transparent in its scope, and be resistant to political tampering by
special interest groups. Unfortunately our current system meets none of
these goals.

**Efficiency**

In any business collection of receipts requires some cost. This will
always be true of taxation, but the cost of running our current system
is far too high. The complexity of the code makes enforcement difficult,
and therefore costly. It limits the government's ability to deal with
noncompliance, which in turn necessitates severe punishment in an effort
to set an example and limit the number of offenders. This adversarial
system is not necessary.

**Fairness**

Our current tax system is unintentionally regressive. The poor pay a
higher percentage of their income for payroll taxes than the rich.
Business and excise taxes passed on to all of us are also regressive
when considered as a percentage of total income. Because of the arcane
nature of the system, even the income tax, which was originally designed
to be progressive can be manipulated by those with enough money to find
and exploit the numerous incentives, loopholes and aberrations and pay
less while getting more.

**Burden on taxpayers and the economy**

Current law costs taxpayers more than just their tax liability. It costs
them time as well: I did not receive forms W-2 and W-3 this year to
report wages paid to a household employee. I went to my local IRS office
where some forms are available outside. W-2 forms, however, were not
available and I had to take a number and wait 45 minutes to receive my
form from an IRS employee. When asked why these forms couldn't be
supplied without waiting for a representative he responded, "because
then people would take them." I don't even know how to begin to argue
with this logic, and in fact, I can't because I, and every other
taxpayer, am at the mercy of the IRS and have to jump through whatever
hoop they put in front of me no matter how illogical it may be.

Taxing any behavior discourages that behavior. Who hasn't wondered
whether it is really worth working overtime to make more money, only to
give a larger portion of it to the government as income tax? If
consumption rather than income were taxed, this dilemma would not arise,
productivity would be encouraged, and the economy would benefit. In
addition, if unspent income could be invested tax-free, the resultant
increase in investment would create a huge increase in GDP and thus
revenues for the government.

**Transparency**

Our current system of taxation is unknowable by any single person. This
fact alone screams for reform. If asked what percentage of our income we
pay in Federal taxes, none of us can answer with any certainty. We may
know our average and marginal income tax rates, and how much we pay in
payroll taxes (although most people would not think to consider the
portion paid by our employer). Few people think of the cost of business
and excise taxes, but these are hidden taxes on all of us. Shouldn't the
citizens of this country be able to tell how much the benefits provided
by our government cost us? Once this cost is known, the impetus to
provide efficiency in government should follow.

**Resistance to manipulation**

The U.S. tax code is manipulated by those who have enough money or
political influence to get what they want. One need only determine who
benefits from a tax credit rider to guess which lobbyist or group is
behind it. Although great strides have been made since the 1970s to
increase the transparency of how these provisions are added, this has
not stopped the problem. What is needed is a system of taxation which is
not susceptible to fine-tuned manipulation, but only gross adjustments
to meet the needs of the federal budget. If the tax code can be altered
to encourage or discourage specific behaviors for the greater good, it
can also be used to benefit specific groups to the detriment of all
others. As we know, in a situation such as this, the group with the most
political influence wins.

I don't think anyone can defend the current system on its merits. The
real question is how it can be changed to best meet the above criteria.
Current methods of taxation only benefit those with the ability to
manipulate the political system. Unfortunately, this ability puts them
in a good position to block any meaningful change unless the public at
large demands change.

With regards,

Robert A. May, Jr

1521 S. Staples #803

Corpus Christi, TX 78404

\-\-\-\--Original Message\-\-\-\--

From: Rob
\[[[mailto:rmay@stx.rr.com]{.underline}](mailto:rmay@stx.rr.com)\]

Sent: Saturday, March 19, 2005 12:21 AM

To: comments@taxreformpanel.gov

Subject: