Lower income people will have to “fill out a financial statement to prove they qualify” for a rebate on a regressive sales tax? And who’s going to review these financial statements to make sure they’re legitimate? And how often will they have to be filed? Sounds like a job for a bunch of government bureaucrats. I thought the idea was to simplify things.
On the contrary, it will take a lot fewer IRS employees. Right now, everybody who makes a living has to file. With my proposal, only those wanting a rebate would file. That's obviously a smaller number. Plus the paperwork will be a lot easier.
So it simplifies the process immensely directly. And nobody will have to pay accountants to hide assets (except people filing fraudulent rebate forms). Most important, it makes filing a return voluntary. You want a rebate? File a tax return. You don't want a rebate, or know you won't qualify? You don't have to file anything.
Hard to imagine a simpler system than that. It DEFINITELY requires smaller bureaucracy than what the IRS is now.
Plus it's more politically feasible, because it would be acceptable to those who believe the poorest among should pay less taxes than those who are better off.
And it could be filed annually, just like the tax returns are now. Or maybe people could file quarterly in exchange for a slightly smaller rebate.
And oh yeah, I almost forgot. There's no withholding tax, so that means people are no longer giving the government an interest free loan like they do now.