Is inheritance income?
What about capital gain? or loss? I did all these improvements on my house before I sold it...
rental income v documented expense [still have to keep up w/ all that?]
What about the stock sale? How much of that is income - I bought it 5 shares per quarter for 40 years... how much did I gain? Still have to keep up with all that too?
What about all the miles I volunteer to drive to deliver meals on wheels?
What about my donations to charitable organizations or church? Who tracks that?
See, tax based on income is never simple. It’s defining income that is the challenge. If we didn’t have to define income, today’s tax could be done on a postcard too -
+how much did you make?
+multiply by your marginal rate.
The only difference is there is more than one rate that can be used. The part that’s tough is determining taxable income. That does not go away if your tax base is income. Nope.
You make good points.
“How much did you make?” can be determined by looking at your W2(s) at the end of the year. And that is how much you pay the tax on.
No withholding, no quarterly estimated taxes, no deductions, no need to track mileage, etc.
One situation I see that would have to be handled is municipal bonds which, now, are tax exempt.
The need for collection and enforcement would still exist but I would guess 90% of the taxing authorities would disappear.
If the Fair Tax could figure out a less complicated way of calculating the tax and a different way of doing the prebate then I think the Fair Tax would have a shot.
Truth be told, though, any tax scheme which takes power away from the government and reduces the number of people employed in the “tax/government” complex hasn’t a chance in Hell of being enacted.