Better tax system models?

I too feel your pain and believe tax day is Oct. 15th.  Every year I get frustrated in April and just file an extension.  I feel I have pretty simple situation, and my tax return is 80 pages!  Thank god for Turbo Tax, but this year I sold an investment house and I had to hire an accountant since I couldn't even remotely figure out what to do even with turbo tax.  Last year I had the IRS send me a note saying I owed them an extra $8K.  After about a weeks worth of work digging though all the crap and multiple calls with them they finally decided that instead they owed me $13.  I suspect this was more than a man week of effort!

I think we need to get rid of income and corporate taxes completely and have sales tax only - not a flat tax (which is applied to income).  This has several benefits:

1. Much simpler - business already has to account for sales tax on local, county, and state levels.  Adding a federal tax would not be difficult.   Note, this is not a VAT tax, we only want to tax the end consumer.
2. This makes things much more transparent. You see exactly what you are paying in taxes every day.  None of the games that make it easy to hide how much tax you are truly paying (hence why no VAT).
3. A sales tax discourages consumption, not savings or investing.  We want people to be encouraged to save and invest as much as possible.  Taxing consumption encourages the right behavior versus our current system which encourages consumption via deductions for things you buy.
4. I also believe we need to get rid of all employer paid taxes like Social Security, Medicare, etc.  These should all be paid directly by the employee.  Again this is a transparency issue since many employees have no idea how much their employers pay in taxes on their behalf.
5. I believe all the taxes paid should be itemized by taxing authority on each receipt. This is again a transparency issue so that you know who/what/how much you are paying.  Taxing authorities hate this type of transparency - remember a few years back when the phone companies decided to itemize some of the taxes on the bills, the feds had a fit.
6. We also need to have a balanced budget amendment.  Borrowing from the future to hide the taxes necessary today is just another hidden tax.
7. On top of all this we have to have a sound currency, since inflation is simply another hidden tax.

Quite the mess - I have little hope we will fix the system...

The Fair Tax is the only one I know of that has had serious vetting and careful wording. I would support it fully. A dear family friend is the NC director for the Fair Tax and would be happy to write an op ed and answer questions about it. You know how to reach me if you want her contact info. 

It is.  It's why the tax code is huge.  Thousands of special interests get special exemptions and each one requires forms.   What really bad is when you start getting into the 100k or so range, you them have to do your taxes essentially twice to determine if you have to pay AMT (Alternative Minimum Tax).  It was one of those things that was instituted to "tax the rich" that is not indexed, so inflation has driven more and more people into dealing with it (sell a company or large chunk of stock and you get to have all kinds of tax fun).  Also, many of the credits (for example the EV car charger credit) also require you to do a lot of extra calculations to determine if you can claim it (means testing).  It's really a complete disaster with many many subjective choices to make. 

VAT is collected at every step in the production of a good or service.  So if you manufacture something and have to buy raw materials, your material supplier collects the tax and then when you sale you also have to collect a tax for "adding value" to the product.  Generally you get to deduct the tax you paid to your supplier from what you owe when you collect from the consumer.  Whereas with a sales tax, you generally give your supplier a note that says, you are going to resale (exempt), and you don't have to pay the tax at that point. 

So VAT adds complexity since every one has to pay the tax and everyone has to keep track and fill out paperwork along the supply chain.  Whereas will sales tax only the end seller has to do so.   The big difference however, is that the end user (the consumer) doesn't see exactly how much tax was collected on the product they just purchased.  It allows the government to hide it all along the supply chain and give large vertically integrated manufacturers an edge.  You can read about it here: The Value Added Tax Is Not The Answer

Governments don't like transparency, they are like cockroaches and like to hide in the shadows so you never know how much of that sandwich they have stolen.

That's exactly how governments like it.  You can't tell how much of your purchase was actual product versus taxes.  That's why government prefer VAT type taxes.  We see the same thing here in the US on products like gasoline which have a lot of taxes in the price, but at the pump you don't see them so you just think the price of gas has gone up and you get angry at the gas station owner, the oil company, or them evil speculators instead of at the government.

For instance which of these receipts would make you question the amount of taxes you pay:

Gas:   10 gallons @ $3.00 = $30.00

------------------------------------------------------------------------

Gas:   10 gallons @ $2.50 = $25.00

Tax:    10 gallons @ $ .50 =  $ 5.00

Total:                               = $30.00

Sorry to those of you outside the US (or in CA,NJ,NY) where these gas prices look ridiculously low.

Thanks for the link - interesting, but I'm not sure I agree with all his points looking back from another 40 yrs on. Accounting is not diffcult, just an extra column in the ledger. Businesses I've worked at always treat the ex-VAT price as their 'real' cost of materials etc, so the cumulative increases don't occur as Rothbard says. Otherwise you become uncompetitive vs a company which doesn't do that. I will concede that vertical integration benefits, though not on that score exactly - the accounting costs, whilst small, can be minimised by VI (though do you know any large company without hordes of accountants? ) He raises false invoicing, but fraud is fraud and will occur in any system, and I'm sure there'll be someone who can work out a fiddle on sales tax too. Re small businesses, there is a threshold for turnover (in the UK that's around £70k/$100k), below that you're VAT exempt (like me). Also he was incorrect to say all business invoices have to be submitted to the 'federal' govt. Accounts must be kept, and you can be inspected, but unless you're acting dodgy that doesn't occur more than once every seven years or so. I think 40 yrs of practice have honed things slightly since the article. Conversely, we don't have sales taxes (ie retail-only), so here that would add extra bureaucracy.

I appreciate the mess you face, tax really shouldn't be subjective. Once I fill in my form I know how much I owe (or how much they owe me...) and its easy to keep track as you go, too, so an escrow account isn't hard to do if necessary. I begin to see why you don't have much hope of getting the system fixed. It sounds beyond fixing, you need a full Keplerian revolution to banish all those epicycles to history.

If we cannot rein in spending, talking about taxes is almost meaningless.

Nevertheless a flat tax is the fairest one I've seen. A tax on consumption would tax a wealthy person when they make luxury purchases at the same rate as a poor person, but since the poor person consumes far less, they'd have an "effective" lower tax bill.

Let's look at how a flat tax would work. In my example Mary Moneybags buys a Gulfstram jet at $37,000,000 and Peggy Poorhouse buys a bicycle at $200. Using a 15% flat consumption tax Mary's tax on the Gulfstream purchase is $5,550,000. Peggy pays $30 in consumption tax on her bicycle. That may sound like a lot of tax for a simple bike, but this replaces income tax and a host of other taxes.

I am still not completely sold on a flat tax on basic food items, but the minute you make anything at all exempt the whole system is vulnerable to the same sort of manipulation our current tax code is subject to.

Those prices DO look low! Yesterday I paid $A 1.549 / litre for diesel, which is what it has been on average for a few months now. (Petrol is about 10 cents cheaper.) This converts to $US 6.06 per gallon.

People grumble but by and large these prices have receded into the background. On the other hand, it is becoming evident that the Australian motor vehicle industry is crumbling.

Given that I believe that some projects need collectivism ( the military springs to mind) the Government needs to raise revenue.

Why not just print it? This is a flat tax on everybodies purchasing power as their dollar is devalued.

The newly minted note is spent on whatever the population votes for (no change there) and there is no paperwork, no angst, no loopholes, no smoke and mirrors.

Aye, and there's the rub. No loopholes. Seeing that the USA is now a Fascist state Capital will never allow a tax system with no loopholes.

To keep inflation under control notes (or digits) are withdrawn at a steady rate.

All very simple really, in a Democracy.

Fascism is when Capital becomes the Government. The USA is now Fascist because companies are free to pervert the will of the people with lucre.

I'm assuming you're joking, but just in case:

The problem is that taxing this way is not evenly distributed.  Those closest to the source of the printing (government and large corporations) see less of an impact because they get the money first.  Also, printing as a form of taxation punishes savers and rewards spenders.  Then on top of that is the transparency issue.  Taxation via inflation is the most hidden tax of all.