First, the tax system.

Let's look at what we 'believe'. First, the tax system.
For the longest time the public has demanded the tax
system be overhauled. 'We' have claimed it is unfair,
regressive (whatever that means), and goes beyond the
intend of taxation to fund the business of government.

When there is an 'outcry' for such reform it is usually
done by politicians attempting to win our support. These
crys demand great change, such as the flat tax proposal
being promoted this year.

But before Congress begins the work of re-writing our
tax code and 'closing down the IRS' lets review the tax
system the way it currently appears, what it is doing,
and what is needed.

The tax system is the legal means of transferring money
from the private sector to the public sector. This money
is to be used to pay for the goods and services government provides.

Unfortunately, the money collected is less than the amount
government spends each year, causing our country to increase
its debt. So the first issue is to determine how can our government 'pay its bills' without worsening our debt load,
which is nearly 5 trillion dollars.

We can reduce spending to a level to a level equal to tax revenue, or raise taxes so our debt burden is not increased.
Or, apply a combination of both of these approaches.

On the spending side there are many ways to cut expenses
and save money. This can be done in two ways. First, look
at current processes that are inefficient and improve them.
Make government perform the same way most successful companies
do. Peel away bureaucrat layers that burden both the public
and those in government who must adhere to outdated laws and burdensome regulations that provide no benefit to the public.

Second, look at areas that go beyond the role of a 'limited government' which is the core of our representative democracy.
At every level governement does too much. It offers more
support to the public, at a great cost, than the benefits provided. This will be the hardest 'mind-set' to alter. Once people receive something from government, whether it is surplus cheese for senior citizens, or lunch and condoms for school children, it is difficult to take away. Advocates for groups getting goods and services will protest any benefit either
taken away or reduced.

Once we clearly define what role government should play in
our life we can move forward to see what the best means of taxation is.

And what is the 'best' way to collect taxes? Experts argue, usually on philosophical grounds. The arguements are filled
more with rhetoric than thoughtful persuasive positions.

The 'flat tax' is getting lots of attention. So is 'higher
rates on the rich' and reducing 'capital gains tax'. It is
mind-boggling to average citizens.

And again, before we debate the way to tax we need to address
what tax policies are EFFECTIVE and should remain. And secondly
what is best way to tax.

Currently, our tax system circumvents the natural laws of
supply/demand in a free market system by creating artifical
incentives. If we make changes that eliminate conditions we
have adjusted our behavior towards, we risk damaging any
industry operating in this environment. We must make certain
any changes do not place a hardship on the public.

There are many tax laws specifically designed to benefit key industries.
we have If for example
Some 'experts' argue increasing taxes will increase revenue, while others claim reducing taxes will increase revenue. And we, the public, quizzically wonder who is right.