A question from Yahoo! Answers:
Why is it so damn confusing to pay taxes for small business?! All the records you are suppose to keep!!?
You want to know my theory?
Because there are so many exceptions to the rules for the rich.
If we all could just pay evenly in sales tax, i think it would MUCH EASIER, AND MUCH FAIRER, AND EVERYBODY PAYS ACCORDING TO THEIR CONSUMPTION!!
what is yours? for or against the complication?
It would be nice to have a simple tax system, but would it be a fair system? Our notions of fairness are complex, so a fair tax system, unfortunately, cannot be simple…
Let’s say we went with your suggestion and everybody pays according to their consumption. Who do you think will have the greatest effective tax rate in this system? The rich? Nope; cancer patients, dialisys patients, and parents of children with disabilities. They consume a lot of REALLY expensive stuff — medications, equipment, doctors’ and nurses’ time… Is this your idea of fair taxation?
Now, let’s say we exempted healthcare from taxation in the interest of fairness. How far should this exemption go? Will dentistry be exempt as well? What about cosmetic surgery? Physical therapy? Speaking of physical therapy, how do we prevent abuse by personal trainers masquerading as physical therapists? What about lobbying efforts by the fitness industry trying to get the healthcare exemption extended to gym memberships and dietary supplements? Pretty soon, the system becomes complicated again. Rulebooks, enforcement personnel, congressional debates, and all that jazz…