Daily Egyptian Politics Editor

Mounting criticism of the Internal Revenue Service is prompting legislative candidates to promise income tax reform, but one SIUC tax expert says that politicians are jumping on a flat-tax bandwagon that they hope to ride to the Capitol.

A flat-rate income tax has been tossed around for years, but it received national attention in 1996 when presidential hopeful Steve Forbes used the notion as the driving issue in his campaign.

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The ongoing U.S. Congress investigation of the IRS has churned up stories of families torn apart after failing to meet requirements of grueling audits.

William Schroeder, an SIUC law school professor and tax expert, says that in the wake of the IRS investigation, some politicians have been touting a switch to a flat-rate tax as a solution to cumbersome paperwork required for graduated tax computation.

But, he says, a flat rate tax does little to eradicate paperwork.

The promise of a flat tax is a red herring of sorts, Schroeder said. It won’t eliminate the need for paperwork.

Schroeder said people who receive income from sources that require depreciation evaluation, such as rental properties, must calculate complex formulas to determine net income. The calculations are time consuming and must be retained in case of an audit.

It takes practically forever to assess depreciation and cost of repair, he said.

Other minor problems are inherent in a flat tax plan, such as a lack of deductions for a home mortgage or charities.

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One of Schroeder’s colleagues, Keith Beyler, another law school professor, differs with Schroeder saying that a move toward a flat tax would improve the quality of the IRS.

Beyler said that some affluent individuals paying higher rates hire tax accountants to find loopholes to reduce the tax they must pay.

Basically what we have now is a system where people in similar economic situations are paying different amounts of income tax, he said.

Schroeder said that eliminating income tax and creating a national sales tax would alleviate current IRS problems.

He suggests a rate of 15 to 20 percent would make up the money lost from an income tax.

Beyler said that a national sales tax could be implemented as a value-added tax, where a tax is levied on each component of a product and the final product. Consumers would have no idea how much they were being taxed, he says.

His other criticism is that the tax burden of a national sales tax would fall hardest on the poor.

But Schroeder said that such a plan could provide exemptions for food, medicine and other basic necessities.

Though he sees his plan as a better solution than a flat-rate tax, Schroeder said he is not optimistic about any politicians endorsing a national sales tax because of the popularity of flat-tax rhetoric.

It might get someone in office, but it doesn’t address the real problems of income tax, he said.