So how do you folks feel about shutting down the IRS?

and having an across-the-board 23% flat tax for everyone? This would mean that it's fair for everyone, individuals, big-business, and small business, not only that, but think of all the money saved from getting rid of the expense of the IRS as well. I was thinking of joining Fair Tax. Org but I'd like to hear the pros and cons of this issue first.

Perhaps I wasn't really clear, the 23% flat tax would be a tax on all sales, which would mean no capital gains tax or any other kind of tax.

yes , get rid of the Income Raping Service !

Let's suppose we had a 23% flat tax. That would shorten two sections of the gigantic Internal Revenue Code--sections 1 and 11. The other 9000 sections of the Code would stay the same.

Why would that mean we would no longer have to have the IRS? Applying graduated tax rates is just about the simplest part of the whole process.

What makes it complicated is figuring out what your taxable income is in the first place. The IRS is in the business of figuring out what someone's taxable income is.

Depreciation, medical expense deductions, capital gains and losses, dividends, redemptions, partnership distributions and allocations, foreign withholding tax, generation-skipping transfer tax, estate tax, gift tax, excises taxes, special fuels taxes, loss carryforwards and carrybacks, controlled-foreign corporations, passive foreign investment companies, grantor trusts, registered investment companies, real estate investment trusts, S-corporations, straddles, notional principal contracts, puts, calls, wash sales, passive losses, at-risk rules, mergers, acquisitions, spin-offs, split-ups, liquidations, etc.--these are the things that make it all so complicated.

Not one of those things would disappear if we had a flat tax.

I agree the system could be a whole lot simpler. Some of the complexity, though, results from the fact that quite apart from taxes, we have a very complex economy. It's not easy to determine just who is earning how much income. Many of the rules are in place only because taxpayers invented clever ways to get around the old rules.

The "fair tax" is a sales tax. It's not clear to me why a sales tax would necessarily be any simpler than what we now have. Instead of having to define taxable income, we would have to define taxable sale. It's just as difficult a task.

Before you opt for a flat tax, consider whether it would really magically make things all that much simpler.

23% sounds great if you are in the 25, 28, 33 or 35 percent brackets. Most people in the 25 or even 28 percent brackets have and effective rate lower than 23% so a flat 23% tax would be a tax increase to them.

What about poor people in the 10 and 15 percent brackets? Most of them end up with a 0% tax rate after deductions and credits and many even end up with a negative tax rate. They get back more than they pay in.

Though it sometimes sounds good, a flat tax is basically a huge tax break for the rich and a huge tax increase for poor and middle class.

The Fairtax has been discussed many times in this and other forums and the "cons" greatly outweigh the "pros".

depends....would you still differentiate between capital gains and earned income? 23% is too high but if you taxed all income at the same lower rate and allowed for a floor income level to eliminate the tax for the truly poor and didn't allow for any deductions you'd probably get my vote. But then again it'd probably destroy the already reeling housing market so you'll not likely get far. Not to mention all those people who put money into ROTHS....whoooooo heeeee!!! Can you spell political nightmare!!!!

And last, but not least, your assumption that a tax exists that would somehow administer itself is naive. You seem to be talking about two different taxes, a flat tax, which is a tax on income, and the Fair Tax, which is a tax on consumption. Neither one could work without an agency to administer it.

Not fair for me to be in the same tax bracket as Bill Gates.

It won't happen. No matter what happens with fair tax, IRS will not shut down.