Happy 100th anniversary, taxpayers! The 16th Amendment to the Constitution of the United States of America states: The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration.
What we have in the Internal Revenue Code is a "grotesque monster" that needs to be gutted -- with a new fresh start. I have been beating this drum for decades, including providing for an amnesty period because we have a so-called annual federal income "tax gap" that is estimated to be between $385 to $500 billion (with a B), with the compliance rate of about 83 percent. Wow -- 17 percent of our fellow businesses and citizens are not paying their fair share every year.
In a recent article in The Wall Street Journal about 30th President Calvin Coolidge, Amity Shlaes stated in her biography of him: "There have been times when debt pinned down the United States ..."
In this same article by Robert Merry, he writes:
"Calvin Coolidge lived in such a time -- as do we. At the end of the World War I, the national debt stood at $27 billion, nine times its level before the war. But Coolidge, and (29th President Warren) Harding as well, slashed the country's credit obligation to just $17.65 billion. They did it by cutting taxes, generating economic growth and, in the process, flooding federal coffers with surplus dollars. This accomplishment merits attention today, with the national debt exceeding $16 trillion -- more than 70 percent of gross domestic product. If that number hits 90 percent, some economists warn, it will squeeze the nation economy inexorably."
I keep asking my family, friends and colleagues: We got into recession trouble with too much debt, so how can we get out of financial trouble with ever increasing debt? Greece, Spain, Italy, you and I can't do it, so where does that leave the good ol' USA? Again, how can the good ol' USA continue to borrow $40 for every $100 we spend?
Yes, there is certainly talk from all sides about reforming the Code and our debt. What we need is for all of you reading this article to contact your congressional representatives and business organizations to ask for comprehensive tax justice and debt constraints. This burden needs to be -- must be -- lifted from us, and our children. I hope I can count on you to carry this message!
Grigoraci is a certified public accountant in Charleston.
Happy 100th anniversary, taxpayers!
The 16th Amendment to the Constitution of the United States of America states:
The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration.
These few words were ratified Feb. 3, 1913.
According to National Taxpayer advocate Nina Olson, the Internal Revenue Code now has about 4 million words and is 10 times the size of the Bible. She also noted that the Code is so complicated that businesses and individuals spend more than 6 billion (with a B) hours every year complying with filing requirements. (Of course, this does not count state, county and city filing requirements. Nor does this count all the pages of regulations, rulings, court cases, etc.)
By the way, that is the same as 3 million people working full-time annually, which probably brings down our unemployment rate.
Not counting the recent last minute changes in December/January, there have been about 5,000 changes, since only 2001, imposing a "significant, even unconscionable burden on taxpayers," Olsen said. You might like to also know that equates to about one a day.
A special friend and client gave me a framed copy of the 1913 Form 1040 and instructions. In 1913 there were only 4 pages and the income tax rate did not exceed 2 percent. The current Form 1040 instruction booklet alone is 108 pages. The current forms and rates are too complicated to discuss here, but I bet you are fully aware of these complications. That's what I call "taxing inflation!"
What we have in the Internal Revenue Code is a "grotesque monster" that needs to be gutted -- with a new fresh start. I have been beating this drum for decades, including providing for an amnesty period because we have a so-called annual federal income "tax gap" that is estimated to be between $385 to $500 billion (with a B), with the compliance rate of about 83 percent. Wow -- 17 percent of our fellow businesses and citizens are not paying their fair share every year.
In a recent article in The Wall Street Journal about 30th President Calvin Coolidge, Amity Shlaes stated in her biography of him: "There have been times when debt pinned down the United States ..."
In this same article by Robert Merry, he writes:
"Calvin Coolidge lived in such a time -- as do we. At the end of the World War I, the national debt stood at $27 billion, nine times its level before the war. But Coolidge, and (29th President Warren) Harding as well, slashed the country's credit obligation to just $17.65 billion. They did it by cutting taxes, generating economic growth and, in the process, flooding federal coffers with surplus dollars. This accomplishment merits attention today, with the national debt exceeding $16 trillion -- more than 70 percent of gross domestic product. If that number hits 90 percent, some economists warn, it will squeeze the nation economy inexorably."
I keep asking my family, friends and colleagues: We got into recession trouble with too much debt, so how can we get out of financial trouble with ever increasing debt? Greece, Spain, Italy, you and I can't do it, so where does that leave the good ol' USA? Again, how can the good ol' USA continue to borrow $40 for every $100 we spend?
Yes, there is certainly talk from all sides about reforming the Code and our debt. What we need is for all of you reading this article to contact your congressional representatives and business organizations to ask for comprehensive tax justice and debt constraints. This burden needs to be -- must be -- lifted from us, and our children. I hope I can count on you to carry this message!
Grigoraci is a certified public accountant in Charleston.
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