Letters to the Editor We Need a Simpler, More Efficient Tax System Now 775 words 26 April 2011 The

Wall Street Journal J A16 English (Copyright (c) 2011, Dow Jones & Company, Inc.) Arthur Laffer's rationale for a simple flat tax with no deductions (April 18 op-ed, "The 30-Cent Tax Premium") is based on assumptions that are anathema to many on the left and to powerful beneficiaries of today's tax code. First there are the few million or so tax-industry employees who will lose their jobs when their "taxcompliance time" is freed up for more productive purposes. They are unlikely to accept the forced transition to less lucrative fields in a docile manner. Some will argue that unemployment will skyrocket when millions seek new roles. Mr. Laffer will counter that the end result -- a more vibrant and productive economy -- is wel l worth the short-term restructuring pain. Will Congress surrender the ability to wrest campaign contributions in return for special tax favors for contributors? Mr. Laffer also views economic growth as "the sine qua non for generating prosperity in the U.S." But the green component of the Democratic Party sees economic growth as the formula for destroying the planet; the social justice component is much more interested in fairly allocating the benefits of past economic growth rather than pursuing more growth that disproportionately benefits those at the top. Finally, Mr. Laffer insults the Byzantine empire when he argues that the U.S. "cannot afford the luxury of a Byzantine tax system." Historians believe that the relatively simple and effective nature of Byzantine tax collection is one of the reasons that the empire survived a thousand years after the collapse of the Roman empire. There was corruption in the system and it was expensive to administer but, for the most part, it kept the state solvent for many centuries. Even the Byzantines would be appalled by the U.S. tax code's complexity and inefficiency. Sean Hogan Augusta, Ga. --One could easily substitute a graduated tax system with escalating percentage brackets for progressively higher incomes, with no exceptions and no deductions. Such a system would be fully as frictionless to administer as a flat tax system. The American economy could go back to being production-oriented without having to bear the burden of a complex tax system. Greg McKay Glendale, Calif. --For most families making $150,000 or less, the tax choices are limited and not complicated. Most defer as much tax as possible into retirement accounts. This means your year-end W-2 shows the net of your gross income less the retirement contribution. Your employer does this for you so this obviously is not complicated. As for itemized deductions for most, the only material amounts you can deduct are income taxes paid, real estate taxes, home interest and contributions. These take only a few minutes to post on a Schedule A. Dividend and capital gains taxes do take some computations and are taxed at lower rates but I doubt if Mr. Laffer's system would change this process much. As to his flat tax proposal (which he has put forth before), this only benefits the wealthy as it would significantly lower their taxes and thus to remain revenue neutral would require a large increase in taxes for those making less than $150,000. Contrary to Mr. Laffer, this would hurt the economy and not improve it. We only have to look at the Bush years to see that tax decreases for the wealthy did not improve the economy. Page 1 of 2 2011 Factiva, Inc. All rights reserved.

John Georgiton C.P.A. Columbus, Ohio --Some years ago presidential candidate Fred Thompson suggested an "alternative" flat tax which would not replace the federal tax code but would allow individuals to choose the conventional, grossly complicated version or a simpler form with few deductions and different rates. Revenue neutral rates would seem a good starting point. As a tax professional, I abhor the current system which discourages non-CPAs from attempting their own taxes even when relatively simple. Those who earned a B in high school math should be able to do their own taxes unless they own or are a partner in a business or have exceedingly complicated investments. The "alternative" tax would allow them to avoid paying a preparer and still provide the peace of mind that the calculations were correct and no nasty letters from the IRS would arrive. Even if Congress passed a simpler code, politicians are unlikely to keep themselves from "improving" it in a year or two. With the "alternative" tax, people could vote with their feet and render the old code irrelevant. What a glorious day that would be. Chuck Brandon Sanford, Fla. License this article from Dow Jones Reprint Service Document J000000020110426e74q00001

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