When a passage from House Speaker Dennis Hastert's newly published memoir
was recently leaked to the media outlining his goal of abolishing the IRS and ditching the current income tax code, some were inclined to write the idea off as the product of a slow news day.

However a week later a supporter of President Bush asked him about the idea at a re-election rally in Florida, and the president said it was worth serious consideration.
Speculation quickly turned to whether this idea would have a place in the president's GOP convention speech. It soon became obvious that this idea touches a nerve with voters.

And why? Because anyone who has ever filed a tax return would be likely to have some sympathy for what Hastert is proposes. The complexity of the tax code saps entire days from our lives. By the government's own estimates it takes taxpayers over 28 hours.

The official tax rules now span more than 60,000 pages. Reading them front to back would be akin to reading "War and Peace" 40 times! In fact, the tax code is so complex that even the IRS can't figure it out. A Treasury Department investigation discovered recently that IRS help-center employees provided the correct answers to tax filers only around 50 percent of the time. You could get just as good an answer to your tax question by simply flipping a coin!

But what if you could get rid of the forms and the fuss?

The best way to do that would be to replace the income tax completely by tearing it out by its roots and replacing it (along with the corporate income tax, the estate tax, the capital gains tax and most excise taxes) with a national sales tax.

Imagine you cash your paycheck, take what you need to buy groceries and pay the bills, and put the rest into savings or toward paying off debt. Under the current tax system, you still have to report all that money to the IRS and you would have to pay tax on most of the dollars you earned, regardless of whether you spent it or saved it.

What's worse is that the dollars you saved are taxed again. Assuming you didn't place your savings in a tax-deferred savings fund like an IRA, the interest earned on that savings would be subject to tax as well.

By contrast, under a national sales tax the dollars you spend are taxed, but the dollars you save are not. You pay the tax at the cash register. And there will be no more intrusion into your personal finances by the IRS. Best of all, because the income tax and all other taxes that penalize investing and saving will no longer exist, there would be a boom in economic growth.

Getting rid of the income tax would restore a great deal of accountability to government. Because the income tax taxes all sorts of income at various different levels and is hidden in the prices of so many goods, the true cost of government is shielded from taxpayers.

Imagine seeing how much you actually pay in taxes with each transaction. With such visibility, the political pressure to keep the tax rate low would be intense. Such an idea is just what President Bush needs to show voters he is serious about creating an innovative domestic agenda for his next term. Promising to reform the entire federal tax system is just such an idea. A commitment to a national sales tax to replace the income tax would be an even better and bolder one.

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