Opinion: As April 15 Approaches, a Tax Rebellion Is Brewing

(March 15) -- In one month, millions of Americans will be scrambling to file their federal income tax returns. Many will once again be reminded that no other public policy so reinforces a perception of self-dealing, unfairness and incompetence as the corrupted federal income tax code.

Bloated beyond decipherability at 67,500 pages of regulations, the income tax system is driven by personal power, lobby profits and, through tax inducements and penalties, a changing menu of citizen and business manipulation.

The tax code is so complicated that both the secretary of the treasury and the chairman of the congressional committee writing tax laws got their own tax returns wrong. Just obeying federal tax laws imposes $300 billion a year in paperwork compliance costs, and each year the system falls $350 billion short of what's actually owed.

The code is so unfair that Warren Buffett's salary-earning secretary pays a higher tax rate than her billionaire boss. Married people pay higher rates than singles living together, income is commonly double and triple taxed, and Congress' error in failing to index the alternative minimum tax for inflation now threatens to define as "wealthy" those with as little as $80,000 annual income.

And, in a country that defined the separation of church and state, the tax code is so intrusive that pastors are told what they can and can't say from the pulpit.

Meanwhile, while millions of Americans suffer unemployment and our economy is struggling to recover, the tax code self-destructively gives foreign competitors significant cost advantages over American companies. And small American businesses, our best hope for employment growth, pay $700 in compliance costs for every $100 in taxes paid, according to recent studies, and every new hire requires significant new FICA taxes.

But "so what?" is the attitude from congressional offices, where selling off pieces of the code has become big business. The perennial promises that "something must be done" are never fulfilled.

Last April 15, for example, President Barack Obama said: "I want every American to know that we will rewrite the tax code [to] make it easier, quicker and less expensive for you to file a return, so that April 15 is not a date that is approached with dread every year." Anyone heard anything more about this?

It's not for lack of a strong public desire for a radical solution to the obviously broken national tax system.

Two years ago, the underfunded Mike Huckabee caught tax reform lightning in an Iowa bottle and was catapulted to a first-place finish there, when he announced his support for a national consumption tax. Mitt Romney and John McCain were burned by the same lightning when they repeated the same old, tired and now unbelievable income tax reform promises. No, the election didn't turn on tax reform, but Huckabee electrified voters when he made tax reform a central plank of his campaign.

For a growing number of Americans, the solution is a national consumption tax. It broadens the taxpayer base and raises every penny now raised, but in a way that helps, rather than hurts, the national economy. Because of a unique "prebate" it is far more progressive than the income tax system and actually eliminates all federal taxes on the poor. Best, it shifts federal taxation from what makes the economy grow -- work, savings and investment -- to what comes out of the economy -- consumption.

While people may disagree on the best solution, there is widespread understanding that the American people cannot win back control of their government until the federal tax system is either repaired or ripped out by the roots and replaced.

The income tax system is very good for those in Washington but damages the economy and bedevils every taxpayer. Last year, the political class was surprised by the tea party movement. They risk being surprised again by the growing demand for an entirely new, fairer, simpler, uncorrupted tax code.

Ken Hoagland, author of "The FairTax Solution," is chairman of the Online Tax Revolt, which is organizing a march on Washington on April 15, and the FairTax national victory campaign. More information can be found at www.onlinetaxrevolt.com.

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