Then what option do we have? The current tax system is outrageous, what's the better path to follow?
http://www.pbs.org/newshour/bb/election/july-dec00/browne_7-05.html
RAY SUAREZ: So that smaller federal government would also allow you to, what, eliminate the income tax?
HARRY BROWNE: Eliminate the income tax.
RAY SUAREZ: How would you do that?
HARRY BROWNE: Well, if you limit the government to its constitutional functions the way it was for the first 120 years or so, you don't need an income tax. The government was financed completely by tariffs and excise taxes, and it paid for national defense, the judiciary, the mint, the post office, all of these things until 1913. When the income tax was passed, that provided a virtually unlimited source of income for the federal government, and they could get into anything they wanted because the money was always there, just raise taxes, raise taxes more. Today, tariffs and excise taxes are more than enough for a strong national defense, the judiciary, the mint and all those other constitutional functions. So we should repeal the income tax completely and not replace it with a flat tax or sales tax or any other kind of tax.
"Then what option do we have? The current tax system is outrageous, what's the better path to follow?"
Number 1 option - REDUCE SPENDING! Reduce spending at both Federal and State and Local level.
Number 2 - VAT is a bad thing. I saw it first hand during the 3 years I lived in the UK (Northern Ireland). VAT/National Sales Tax are similar, though they operate a bit differently. And all countries with VAT also have HIGH income tax rates. Stuff in England costs about double (US dollar equivalent) what it does here in the US.
Number 3 - My opinion is that some sort of a Flat Income Taxmight be the best alternative to the present system. Any legislation instituting a flat tax must also require major reorganization/reduction/curtailment-of-power in the IRS.
Number 4 - the only argument for National Sales Tax is that it would tend to put US manufacturing on a more equal footing with imports because it would require the same tax rate on incoming goods. Perhaps someone has a suggestion on how to accomplish this without the adverse effects on the rest of us. Note that EC countries avoid VAT on exports. But we can't tax those imports with duties to match the VAT avoided. This in effect is an EC subsidy on exports, but we can't do the same on our exports. Inequitable!
The path that the founders of this country put in place, that worked well until the socialist takeover during WW I. They taxed imported manufactured goods. It would work even better today.