So the President's Advisory Panel on Federal Tax Reform wants
information on the following.

1.  Headaches, unnecessary complexity, and burdens that taxpayers - both
    individuals and businesses - face because of the existing system.

2.  Aspects of the tax system that are unfair.

3.  Specific examples of how the tax code distorts important business or
    personal decisions.

4.  Goals that the Panel should try to achieve as it evaluates the
    existing tax system and recommends options for reform.

I'm sure you will get some very eloquent responses from some people
whose names are familiar. This response, however, comes from "the man on
the street". I'm not a politically active person. I do vote. I also
study the issues and the politicians before voting. I don't vote based
on media coverage or exposure. I vote the issues. I often vote for
things that personally may have a negative impact on my life. I vote
based on what is right for the country. I know that in the long run I
will be better off even though I may suffer in the short run. I tell you
this because I want you to know where this letter is coming from. It is
not coming from a Political Action Group or Special Interest Group or an
unaware citizen. It is coming from me with unsolicited input from my
friends.

I will try to address areas of information one at a time.

1)  Headaches, unnecessary complexity, and burdens that taxpayers - both
    individuals and businesses - face because of the existing system.

You have to have your head in the sand not to know that the average man
hates tax season. Just look at the amount of time and money is spent
trying to figure out what to put on the various tax forms and which
forms to put them on. I don\'t understand how anyone can be in favor of
a system that is so complicated that no one can figure it out in its
entirety.  Just look at all the examples where someone has submitted the
same financial information to a variety of different tax \"experts\" and
come up with a different result form everyone of them. The small
business person has it even worse. Not only do they have to go through
the dreaded process for their business, but then they have to go through
the dreaded process for themselves. Almost everyone I know fears an
audit. The fear is not because they cheated, it is because of the
intimidation and fear that they did something wrong. I don't care how
nice the auditor is, the fear is still there. The whole process is
stressful. Audits are stressful. Stress is harmful to the body.

I'm just thankful that all my investments are in an IRA, because if I
had to figure out which investments were taxed at what rate, I'd
probably stop investing. Or maybe I'd do as a lot of people do; take a
guess and hope for the best.

Let's put the current tax system in perspective with the illustration
below.

Shopping the IRS Way

Suppose you walk into a store and fill your shopping cart with several
hundred items. As you approach the register to checkout you see a sign
that gives checkout instructions:

1.  Take one of the forms from the stack below this sign and list all
    the items you purchased. (See Publication 9876 to determine
    appropriate form for your type of order.)

    a.  Include the regular price and any discounts.

        i.  Some discounts are a set dollar amount.

        ii. Some are percentage discounts. (To determine your discount
            see Publication 438 -- Discounts for consumers or
            Publication 485 -- Discounts for Business.)

> **Example:** Consumer discount. Get Publication 438.

a.  In column 1 of Table 17 in Publication 438, find the total of your
    order before any discounts are applied.

b.  Move across the row to the column for the number of qualified
    discount items.

c.  If total of order before discounts is between \$572 and \$583 and
    the number of qualified discount items is between 97 and 103 then
    the Category A discount is 14.76%, Category B is 9.21%, Category C
    is 21.42%, and Category D is 3.18%. For other dollar amounts and
    numbers of qualified discount items, other percentages must be
    determined from Table 17.

d.  Apply the discount percentages for the 4 discount categories to the
    respective items.

```{=html}
<!-- -->
```
b.  Separate each item by category.

```{=html}
<!-- -->
```
2.  Total the order after applying discounts.

3.  See Publication 97 to see if the AMO (Alternative Minimum Order)
    applies.

4.  Pay either the order total after applying discounts or the AMO
    whichever is higher.

5.  Keep price tags for all items purchased to prove that you completed
    your form correctly in case of an audit.

6.  Sign and mail form and check to Store Bookkeeper at proper location
    based on your state of residence. (See Publication 239 for
    appropriate Store Bookkeepers.)

7.  All forms and publications may be obtained free from your Store
    Bookkeeper.

8.  Store Bookkeeper may audit your form anytime within the next 3
    years. If mistakes are found such that you underpaid, you will be
    responsible for paying the difference plus interest and penalties as
    determined by the Store Bookkeeper. If mistakes are made such that
    you overpaid, a refund will be mailed to you.

9.  If mistakes that appear to be intentional are found, your orders may
    be reviewed as far back as you date of birth.

```{=html}
<!-- -->
```
A.  Professional help for completing these forms is available from a
    variety of sources for a fee. The Store Bookkeeper does not certify
    or make recommendations as to the qualifications of the professional
    help services.

B.  Mistakes made by Professional help are still your responsibility.

**Summary: If this is too complex, you can pay someone to figure out how
much you must pay someone else.**

The above is one page of instructions with reference to several other
publications of instructions. No one would put up with this.

The IRS has hundreds of thousands of pages of regulations with
innumerable publications that we are all forced to comply with without
choice.

2)  Aspects of the tax system that are unfair.

You want unfair, I'll give you unfair.

**Example 1:** A man has a job. He pays taxes on his income. He doesn't
like debt so he saves his money until he has enough to buy new car. He
is taxed on the income his savings produce. He finally has enough to buy
the car. He pays tax on the purchase price of the car. He pays another
tax for a license plate. He gets to pay that one every year. Not only
that but he also pays all the taxes that were paid by every business
that had anything to do with the finished car. They are built into the
price. Another man has no job. He sells drugs. He is not taxed on his
income. If he gets caught for his illegal activity, one of three things
will happen. 1) He will get off on some technicality; 2) he will hire a
top notch attorney with his ill gotten and untaxed money and get off
because of something; or 3) he will go to jail and get free room and
board with cable TV paid for with tax money from the man with the job.

**Example 2:** A man has a job. He pays taxes on his income. He wants to
decorate his house so he buys a painting. He had to earn \$1000 to have
\$700 in take home pay to buy the painting. Another man has a business.
He wants to decorate his house so he buys a painting. He has to earn
\$700 to buy the \$700 painting because he didn't put it in his house.
He put it in his office, deducted it from his taxable income, and left
it there until he tired of it. Then he got rid of it. It ended up in his
house.

**Example 3:** A man makes a living doing something. He builds an estate
to pass on to his heirs. He writes a will. He knows exactly what he
wants to happen to his money when he dies. He doesn't need an attorney
to tell him what he wants to happen to his money when he dies. Among
other things a "will" is defined as a desire. He has spelled out his
desire in plain English that any literate person could understand.
However, he is told he needs to pay an attorney to make sure it is
worded correctly for the state he lives in. He moves. He has to pay
another attorney so that his "will" is worded correctly for the new
state. He is paying a fee to comply with the tax code of his current
state of residence. Doesn't it seem like a conflict of interest that the
same profession that wrote the rules is the one that you have to pay to
comply with the rules? Anyway, when he finally dies, some government
entity or another takes a bunch of his estate away (estate tax) from the
heirs. Another man is in the same situation except that he puts all his
possessions in a Trust. He pays an attorney to do this because it has to
be worded correctly to be valid. Doesn't it seem like a conflict of
interest that the same profession that wrote the rules is the one that
you have to pay to comply with the rules? Since this man has his
possessions in a Trust it is not subject to an estate tax. It is fair
that the tax one pays depends on which piece of paper one completes?

**Example 3:** (This one actually happened to me.) A tax auditor
accusing me of lying because I didn't remember the exact dates (to the
day, I knew the month and year) in which a purchase and sale occurred.
Prior to being accused of lying I had provided proof of date of purchase
and sale to the IRS. The auditor said I was conveniently remembering
dates that would lower my taxes. Was it fair that I had to reproduce the
documents for the IRS because they had lost them? Was it fair that I had
to suffer the indignity of being called a lier?

3)  Specific examples of how the tax code distorts important business or
    personal decisions.

Buying things at the end of a tax year rather than wait until it is
actually needed which may be at the beginning of a tax year. Selling or
not selling ones home because of the length of time it has been owned.
Deciding where to live based on the tax consequences. Taking a vacation
in conjunction with a business trip so as to make it deductible.

4)  Goals that the Panel should try to achieve as it evaluates the
    existing tax system and recommends options for reform.

The existing tax system can not be reformed. It needs to be discarded.
We need to start fresh. Have you ever noticed that businesses buy a
piece of property with existing buildings on it, but rather than fix-up
the existing buildings to meet their needs, they tear down the whole
mess and start over with a new building. That's what needs to be done. I
don't believe anyone believes that a system will become less complicated
by adding to it. The new tax code should be so simple that anyone with a
3^rd^ grade education can figure it out without anyone else's
assistance.

I have heard many tax reform proposals in my 60+ years of existence.
None of them seemed as fair to everyone as the FairTax proposal. I have
heard no one give any explanation of what is wrong with it except those
who didn't understand it. The only way to not understand it is to not
read it. I strongly desire a simple, fair tax system --- one that
doesn't requires attorneys to figure out or accountants to comply with.
No one should have to pay money to pay taxes (see grocery store
example). It shouldn't require days to figure out how much tax one owes.
Businesses shouldn't have rooms full of full time employees whose sole
purpose is to comply with tax code. These people could better be used to
product something.

I hope the various panels, committees, and Congress don't debate this to
death. Just replace the current tax code with something simple and DO IT
NOW! Tomorrow's not soon enough.

Thanks, Lowell Dietz

If it refers to the will of the people then there is definite
\"political will\".

The only explanation I can imagine for anyone thinking there is not
\"political will\" is that they are confusing the most common response I
get when talking about the FairTax with a lack of desire for change. The
most common response I get is caused by the cynicism of the public
regarding our politicians willingness to do what is right for the public
rather than what is right for their reelection or their desire for
power. The most common response is \"it\'ll never happen\". They all
want it, they just don\'t believe our politicians will ever approve it.
They don\'t believe there is enough \"political will\" among politicians
to do what is right.

Prove me wrong.

I don\'t understand how anyone can be in favor of a system that is so
complicated that no one can figure it out in its entirety. Just look at
all the examples where someone has submitted the same financial
information to a variety of different tax \"experts\" and come up with a
different result form everyone of them.

The current system sucks. It encourages cheating. It ignores the
underground economy. It penalizes the honest citizen who has to make up
for the lost revenue from cheaters and the underground economy, which
further encourages people to cheat. It\'s a vicious cycle that needs to
be discarded and replaced. Please note: I did NOT say repaired. It needs
to be replaced.

Thanks, Lowell Dietz