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Andrew Gideon wrote:
Matt Barrow wrote: I can't find the source now, but I recently saw a summary of how much money is spent simply related to collection income taxes. This included the cost of the IRS, and all tax preparation services such as H&R Block, tax software, tax attorneys, CPAs, etc. The number of people and amount of money spent simply counting and collecting taxes (and trying to avoid the same) was simply staggering. But how much of this is solvable not by eliminating the taxation process, but by (honestly, this time) simplifying it. In this day of automation, the state of tax preparation is incredible to the point of offense. I would not tolerate this in a vendor from whom I was purchasing by choice. Yes, a flat income, sales or VAT tax could certainly eliminate much of the government bureaucracy. That the government has yet to get this right - along with any other technological project of significance, like the FBI's fiasco - is a good point for private enterprise. However, there are inherent inefficiencies with that approach too. Such as? There are often inequities in private enterprise, depending on how you define equity, but typically the efficiency is quite high over time as the inefficient players die out. Every payment has a cost, even in an efficient (ie. not government {8^) world. The efficiency of the payment (ie. the amount that goes to overhead of the payment infrastructure) drops as the actual cost of the purchased item/service drops. In other words, it's more efficient to pay a single large sum than several smaller sums. This gets especially bad in the range called "micropayments", for which the world is still waiting on a good (accepted) solution. By aggregating several purchases, taxes do (rather: could in theory) provide efficiency. If only it were done well. Yes, that is the crux of the problem. Government has no incentive to do this well. Matt |
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