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

From: Rick & Rebecca Rakoczy
\[[[mailto:rrakoczy@bellsouth.net]{.underline}](mailto:rrakoczy@bellsouth.net)\]

Sent: Monday, March 14, 2005 11:49 PM

To: comments

Subject: Response to request for comments by the Federal Tax Reform
Panel on Feb. 16, 2005

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

Richard A. Rakoczy

127 Coventry Rd. Decatur, Georgia

March 14, 2005

Individual Submission to Federal Tax Reform Panel

Richard A. Rakoczy

127 Coventry Rd. Decatur, Georgia

March 14, 2005

> 1.*Headaches, unnecessary complexity, and burdens that taxpayers -
> both individuals and businesses - face because of the existing
> system.*
>
> The current income tax system is an unproductive drain on each
> individual's time, in understanding, preparation, & completion.
>
> The time it takes for one to complete his taxes is well documented as
> increasing nearly every year.
>
> Preparation that includes convoluted formulas that must be followed,
> with exceptions, limits & what ifs ,are embedded into the system to
> the point that it discourages individuals from even doing their own
> taxes, Or, one makes errors in preparation causing more time &
> possible penalties to be risked in their correction.
>
> Examples of this are anything to do with business uses of property,
> equipment, or even income derived from certain types of income
> producing activity.
>
> Burdens placed on self-employed individuals that include paying both
> sides of FICA & Medicare taxes, that have diminishing value to start
> with, have even less value to the self employed.
>
> Alternative minimum tax rates punish achievement and have not been
> updated to today's wage levels since its inception in the seventies.

Richard A. Rakoczy

127 Coventry Rd. Decatur, Georgia

March 14, 2005

*2. Aspects of the tax system that are unfair.*

Textbooks would say that our current tax system is progressive. That
adjective has positive connotations of fairness & doing right by others.
Unfortunately, in the pursuit of fairness, we have created a "class"
society based on income level and a new perception of what government is
and does. One group, predominantly high income, pays the bulk of the tax
load. Then from the middle levels on down we have diminishing to no
obligation to pay income taxes at all.

This system has meant that those not paying for the cost of government
see it as "free" and have developed a mindset that government is some
benevolent force that provides them with things they can use. And,
government obliges with more programs & ways to fund a "need" than
almost anyone can think up.

On the paying side then, government looks pretty expensive. Value of
government services is measured as less than dollar for dollar.

Resentment is created at both ends and to the middle. Folks at the low
income levels, who dream or aspire for a larger income, can't understand
why "rich" people won't pay their taxes for them, it's only fair. Higher
income level folks, most of which started out making nothing, look at
the deal as some kind of dirty trick ; I was poor and I was good, now I
am doing well and I'm...evil?

This is a system that is immoral, and will do long term harm to all
Americans.

Richard A. Rakoczy

127 Coventry Rd. Decatur, Georgia

March 14, 2005

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

My wife works as a self employed writer. During the last two years, I
took a better job, that placed us in a higher tax bracket, and, the
alternative minimum tax (AMT) became more than a curiosity. Looking at
her incremental income added with mine today, she basically pays out
about 50% to income & payroll taxes. It is simply not worth it for her
to work, though she loves to write and has been successful doing it. The
current tax code tells high income households to stop, or limit working
for second incomes because it will be taxed at a very high rate. Well,
realistically, someone else will do the writing if my wife doesn't. But,
how did it become governments role to place a disincentive for work on
certain folks based on income alone?

Richard A. Rakoczy

127 Coventry Rd. Decatur, Georgia

March 14, 2005

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

The current tax code is immoral and should be abolished.

The cost of government ought to be transparent to everyone paying for
it.

Everyone should be paying for the cost of government equally.

The new system must be simple in concept & execution

A plan to explain the new system to all citizens must be put into action
and understood by all before implementation of the new system takes
place.

Please accept my comments, thanks.