Auctioning of the tax code

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With millions of Americans once again struggling to complete their federal income taxes, it is a good time to reflect on the profoundly dysfunctional and highly punitive federal tax code that only gets more complicated year after year.

The patchwork quilt of tax loopholes, exclusions, adjustments and various forms and schedules that we all struggle to understand is a reflection of the wholesale auctioning off of the tax code over the last several decades at the hands of an army of powerful, well-heeled lobbyists. The hallway in front of the tax code-writing House Ways and Means Committee where they practice their lavishly compensated trade has even been dubbed "Gucci Gulch" in recognition of the $1,000 shoes worn by many lobbyists.

Tax policy is big business in Washington. Members of the House Ways and Means Committee and the Senate Finance Committee and their staff are routinely paid signing bonuses of a million dollars and more when they join powerful Washington lobbying firms. Recent revelations about the clout of some Washington lobbyists pale in comparison to the real and hidden influence of tax lobbyists on both citizens' responsibilities to the national government and the nation's economic well-being. It is little wonder that these staffers and their bosses so passionately object to efforts to win fundamental reforms.

Unfortunately, Americans have learned to fear "tax simplification" because the tax code always gets more, not less, complicated in the lobbyists' hands. The code is so complex that even the Internal Revenue Service fails about half of the time to accurately answer taxpayers' questions, and even H&R Block has been fined for getting its own taxes wrong.

This complexity gives rise to another staggering $265 billion a year in tax compliance costs by legions of frustrated citizens and busy auditors, tax preparers, lawyers and corporate compliance specialists. Compliance costs alone represent a greater sum than the combined annual revenues of Sears, Walt Disney, Microsoft, Rite Aid and McDonald's. That honest citizens must spend so much time and money in order to comply with a federal law is an indignity that seems lost on many critics of a national sales tax.

As the founder of a national campaign to replace the income tax with a transparent, simple and non-regressive national sales tax, I have seen first hand the lengths that both elected officials and the entourage fed by the tax code will go to defend their turf. In recent deliberations by the President's Advisory Panel on Tax Reform, for example, millions of dollars of top level research by recognized economists supporting the FairTax proposal was simply swept under the rug. The panel was charged with suggesting fundamental reform but failed to deliver under the leadership of two former U.S. senators -- both of whom who work in firms lobbying the tax code.

When we began our work at FairTax.Org, we naively thought that our common-sense proposal of a national sales tax that eliminates the IRS, un-taxes the poor, favors American producers and is simple enough to be understood by a child would be welcomed by our elected officials. To date, more than 55 courageous members of the Congress agree. But, we have now come to understand that nothing less than a national roar of citizen condemnation will force reform.

Once upon a time our tax policy may have been intended to spur growth in segments of the economy while fairly funding the government. Today it is simply a lucrative Washington business that specializes in shearing taxpaying sheep while rewarding those wealthy enough to buy into the corrupt auction of taxpayer's wealth. This assault on taxpayers and the nation's best interests cries out for fundamental reform.

Leo Linbeck is the chairman of Americans for Fair Taxation (FairTax.org), a national organization seeking replacement of the income tax with a non-regressive sales tax.