OK, taxes are boring at best, but I'll try to make this interesting... First, most of the ideas given below are not original... I have gotten a lot of them from http://www.fairtax.org : Most would agree that the current tax structure is overly complex, confusing, and rife with loopholes, shelters, etc. So how to fix it? In a nutshell, by replacing the entire federal tax system (which includes personal, payroll, corporate, self-employment, capital gains, figt, and inheritance taxes) with a consumption tax (aka sales tax) on new goods and services. (Some of you have probably have some concerns about this, and I'll address some of those shortly.) Let's look at the benefits first: 1) Everyone who earns a paycheck would actually be able to take home their entire paycheck (except for any state taxes of course). Take a look at your pay stub to see the difference between NET and GROSS pay. An instant pay raise for everyone who gets a paycheck sounds good to me. 2) Existing taxes that businesses pay are actually built in to the prices of the things that they sell (a Harvard study says 20-30% of the price of a product is made up of hidden taxes), so if those taxes are eliminated businesses will be able to reduce prices (competition will make sure this happens). So things will start to cost less. 3) No need for individuals to file complicated tax forms each year, and/or pay someone else to help them with the forms. 4) No more loopholes, tax shelters, etc. Congress wouldn't be able to give a particular company/industry a tax break, or raise the tax rate on some people and not others... there would be exactly one tax rate for them to mess with, and it would be very evident to everyone whenever it was raised. 5) No need to keep receipts, or for the IRS to be told how much money you make, or where you work, or how much you decided to contribute to charity, etc. 6) Tax the "underground" economy a lot better (drug dealers don't pay payroll taxes, but every time they'd buy a new car, etc. they would pay taxes under this new plan). Now, the concerns that some people have: 1) "Sales taxes hurt the poor, because they're taxed on 'essentials' such as food, medicine, etc." The proposed plan I'm advocating takes this into account, by allowing every household to request a monthly tax rebate to cover purchases up to the government poverty level. How would this work? Let's look at an example dealing with a family of four: (I'm basing this off of numbers that are 2-3 years old, so there would be some minor changes for this year, but it'll give you a good idea of how it works). First, the government would make an assumption: Every single household needs to spend money equal to the poverty level. Therefore there is no need to keep receipts, or otherwise prove what you bought, when you bought it, etc. Poverty level for a family of four is $17,050. Let's assume the consumption tax rate is 30%. So the government would assume that a family of four would pay $5115 each year, or about $426 each month. The family of four would then be able to receive a tax rebate check each month for $426. Note that there is no proof of income required... the thinking would shift to how much you spend, versus how much you earn. All you'd need to do is provide the government with the Social Security number of everyone in the household. And if you make enough money to not bother, then you don't have to even do that. Basically, any family that decided not to spend more than the poverty level (or didn't have enough money to spend more than the poverty level) would pay $0 in federal taxes. Compare that to the current system, where everyone earning a paycheck is paying Medicare, Social Security, and in many cases income taxes. Even those who make too little to pay income taxes are paying the other payroll taxes. 2) "It's just a tax break for the rich!" Well, there would be some people paying more in taxes, and others paying less in taxes. But guess who typically buys the expensive vehicles, new homes, boats, etc.? That's right... people with money. And when they buy those things, they'll pay taxes. If a guy making millions each year decides to live in a one bedroom apartment and eat dog food, he'd get a tax break. But conversely, someone living on a large trust fund (in a tax-free shelter probably) would wind up paying more taxes than they are now. Anyone have any comments/concerns?