The Internal Revenue Service boasts that it will save $10 million this year by not mailing out traditional paper tax forms. Instead, those who do not file their returns electronically will need to pick up forms at certain libraries and post offices.
Well, far be it from us to disagree that federal agencies such as the IRS should reduce expenses. But $10 million is “chicken feed” compared with what the government could save taxpayers by reforming our tax system and introducing a flat tax.
The Cato Institute estimates that $265 billion is spent annually on complying with our complicated tax code, which runs tens of thousands of pages long.
We could eliminate most of those expenses — and sharply reduce the size of the IRS itself — through the creation of a flat tax. Such a tax could exempt a certain portion of household income, then assess a rate of perhaps 17 percent on what is left. A taxpayer could easily “do the math” required on a simple, one-page form.
Imagine the bureaucracy that would be eliminated and the savings the American people would realize if they did not have to buy costly tax software, nor hire accountants and tax-preparation services.
A flat tax would make that possible — and it would save both taxpayers and the federal government a lot more than $10 million.