Charles Shiflett Column March 7, 2004

Death By Numbers

My home office looks like a paper recycling dump station. Recycling is fine, but I'm not that green. If K-1, W2,
1099, 1040, & Schedules A, B, C, D, D-1, & E mean anything to you, then you know what I'm up against - so
welcome to the club. Yep, it's tax time!

Our forefathers had a nighttime tea party and launched a war over much less than the abuse we endure
today from our government taskmasters. During one of my recent moments of boredom, I calculated roughly
how many hours were required each year to maintain the records needed for my personal returns plus the
time spent actually completing the forms - try sixty-three hours on for size. And that doesn't include my
business returns!

Sixty-three hours of my life wasted, year after year, to satisfy an unwieldy tax code! That's time I could spend
with my family or doing chores around the house. Then we have countless hours - no make that months
spent laboring just to pay taxes they waste on fluff, pork, and reelection gimmicks!

We are talking about government, so it gets worse. I also have four small businesses and of course must
keep tax records and fill out numerous tax forms for them. Hey, I'm not IBM or GM with an army of
accountants and lawyers to keep me in compliance - it's just me. So while doing the moment of boredom
thing, I calculated the time spent on my business taxes. Bad move. I became so depressed I considered
asking my doctor for some Prozac.

My businesses would require no bookkeeping at all if not for the tax code. Just deposit the money as it
comes in, pay the bills, and I keep the rest. No reason for financial statements, balance sheets, or profit &
loss statements… and there are millions of small businesses like this across the nation.

While we're on the subject, please remember businesses pay no income taxes. Only individuals pay income
taxes. Companies only collect taxes from you by raising the prices of the goods or services they sell. The
price of a loaf of bread would drop by 25% or more if the corporation baking it didn't have to include corporate
taxes and compliance in the price.

And to show how goofy the tax code is… Let's say the bread company's taxable profits are $50 million this
year. They pay corporate taxes on the $50 million and then return what's left of that $50 million to the
company's owners - the stockholders - as dividends. You guessed it; the stockholders now have to pay
taxes on that money all over again when they receive it. Can you say double taxation?

Now there's a third leg of this tax table (oh, that was cute) - and that's the issue of privacy. No one, and I
mean absolutely no one should know anything about my personal business - not my friends, family,
employer, church, and especially not the government. It's easy to accomplish that level of privacy with the
elimination of personal & corporate income taxes. That's why I am such a big fan of the national sales tax
plans being floated.

Imagine an employer would never again have to maintain income records on its employees. No taxes to
withhold or forms to file. You would receive a check or cash each week from your employer for the full
amount earned and no one would know. Imagine how much more productive small business people would
be. No records to maintain for taxes, no forms, no unexpected tax liabilities - just pure freedom!

Imagine how much lower retail prices would be since companies would no longer be passing along taxes
as part of the price. American produced goods would be cheaper to manufacture and exports would
increase greatly - meaning more and better paying jobs for U.S. workers.

Most states already collect sales taxes, so the infrastructure is largely in place and each state could be
responsible for collection within its borders. The IRS could be abolished and those fine folks drawing a
check there now could just apply for a job with their state sales tax department.

A lower tax bite, greater productivity, freedom, simplicity, and most of all… Privacy! What's the problem with
this picture? The problem is the majority of Americans have been beaten down to the point they will accept
our current inefficient & invasive tax system - and then willingly vote for politicians who promise a little pork
back. Many citizens are receiving some form of government assistance or subsidy and our U.S. Constitution
is on life support. Can we as a nation stomach the courage for the cure or will we eventually settle for death
by numbers?