Many people think there needs to be change in regards to taxes. The currents US tax code is excessively long and riddled with loopholes and exceptions. The problem is in fixing it. So what do we do to fix it? What is the best form of taxation?

The AICPA(American Institute of Certified Public Accountants) recently listing principals of how to judge a good tax reform in 2005.
These principals are as follows:
1. Simplicity
2. Fairness
3. Economic Growth
4. Efficiency
5. Neutrality
6. Transparency
7. Minimizing Noncompliance
8. Impact on Government Revenues
9. Certainty
10. Payment Convenience

All of these principals are equally important according to the AICPA.
I find these principals to be accurate covering what a good tax reform would be.

Now what system fits these principals the best?
I find it to be the fairtax tax reform.
We need change and if you have a better plan please state it.
Lets go threw the fairtax relating to principals.

Simplicity: While not being as simple as some other forms fairtax is fairly simple. It is very simple compared to the current code, which in length is over 60,000 pages(USATODAY.com - Scrap the tax code).
That goes against a mere 53 pages according to my computer, pasted the bill into openoffice and saw how many pages there are. For the taxation part it is a simple 23% tax rate on all goods and services from business to consumer. It provides a prebate to families to cover the tax cost of necessities which is determined by family size. This would replace the multiple taxes already in place by the federal government.
"TITLE I--REPEAL OF THE INCOME TAX, PAYROLL TAXES, AND ESTATE AND GIFT TAXES

Sec. 101. Income taxes repealed.

Sec. 102. Payroll taxes repealed.

Sec. 103. Estate and gift taxes repealed."
GovTrack: H.R. 25 [109th]: Text of Legislation

One of the main principals of the fairtax was it simplicity. It does fairly well in this category.


Fairness: This can be a tricky one. How to we determine if fairtax is actually fair.
Exemptions: Exemptions lead to special interests and are not fair. Fairtax eliminates exemptions. It makes it harder for special interests and other influences to effect our tax code.
Education: Many would agree that taxing education would be detrimental and unfair. Well fairtax doesn't. Education is an investment and is treated as so.
The poor: It is important to many that we treat the poor fairly. This is done threw the prebate. The poor can get all their necessities completely tax free. The poor will also be helped by the boost in the economy, which will come up soon.
Equality: It treats all people equally.

Economic Growth: This is a large problem with the current code. Only consumer sales are tax America would become a tax haven to all business. The current tax code is making businesses go overseas. Fairtax will not only bring those back, but overseas businesses will come here. This will cause a boom in available jobs and foreign money coming to the US.
People with money are putting there money in foreign banks which is a drain on our economy. With this new tax code they would not need to do that and that money would come back to help fund our economy. They would no longer have a reason to go overseas for their banking needs.
Fairtax is a savings based tax instead of the consumer based tax we have currently. People would start savings more. Savings helps the economy, that is just economic fact.
It is also predicted that the real pay of all people would increase do to the economic growth caused by enacting fairtax.

Efficiency: This one is determined by many others in this case. Fairtax will be very efficient. As we will see later it will decrease the amount of tax evasion. It is simple and fair. All of these factors help in its efficiency. It is a very compact efficient way of taxation.

Neutrality: It is very neutral. It gets rid of the exemptions. It stops the special interests from getting tax benefits. As you can see many of these different categories tie together. It treats everyone the same.

Transparency Transparency is the ability to see how much you are being taxed. All the tax will be up front. 23%. Unlike now when you feel hidden taxes from all other things up to that purchase. Our current system is not all that transparent with the total tax burden you feel. You can not get any more transparent than this system.

Minimizing Noncompliance Of course we want to do what we can so that everyone pays taxes. Well with fairtax it would take two to cheat on taxes. Since taxes are done at the counter only. The seller would have to allow the consumer to cheat on the taxes. That would be harder than simply filling out your tax form wrong. It makes it much harder to cheat on your taxes. Most companies are not going to risk jail to help someone else save money on their taxes.

Impact on Government Revenues: Fairtax is revenue neutral. It is designed to make as much income for the government as it does now. That is what we want for tax collection. Spending is a different issue that most certainly needs to be addressed, but not in tax reform.

Certainty: How certain are they that fairtax will work. It was designed to be the best tax reform. Economist are the main influence in the fairtax and there is a very high certainty that fairtax will work just as it was meant to. This is not just any old guys plan.

Payment Convenience: This is another big improvement. Instead of having to collect from all those individuals they would only need to collect from businesses. The calculation for the payment is very simple. We currently have to file complex forms and individuals as well as businesses spend billions to plan and file taxes. This will be a huge reduction in convince.

As far as tax reform goes I see no better than fairtax.

So what do you guys and girls think?