Real outsider presents tax reform ideas

When people talk about changing the tax code, they always say the same thing: Our federal tax code shouldn't pick winners and losers.

Baloney.

By the very nature of taxes, they do that and always have. When we tax people's income (or anything else), we pick winners and losers: What do we tax? What do we ignore? At the same rate or at a varying rate?

I mention this because we're in the middle of the biggest push for comprehensive tax reform in Congress since 1986, when "Say You, Say Me," was the second-most popular song of the year (and we learned that to say it for always is the way it should be).

I know about tax reform because my day job involves the subject . . . and because it's in the news. Tax reform this, tax reform that, corporate rate this, itemized deductions that, pass-through rate this, alternative minimum tax that.

Confused? Me, too. But I have a plan, if it's not too late for Congress to make some changes.

We can do this!

The first issue we must agree on is that the purpose of the tax code is twofold: Raise money for the government and encourage certain behavior.

Why do we get to deduct home mortgage interest? The government wants us to buy houses.

Why do we get a deduction for each child? The government likes children.

Why do birds suddenly appear every time you are near? Just like me, they long to be close to you.

We can agree that we pick winners and losers. We just need to agree on what they should be, which leads to my first proposal:

Proposal No. 1: Tie the individual tax rate to the taxpayer's BMI.

The current tax code taxes us between 10 percent and 39.6 percent of our income (with all kinds of confusing deductions and other options). At the same time, the government wants us to eat healthy and exercise. Under my plan, if your BMI is "healthy," your tax rate will be 18.5 percent to 24.9 percent. If you're way out of shape, your tax rate will be high.

We don't want to encourage unsafe dieting, so I would set the low at 18.5 percent. (By the way, I'm not saying you should be thin. The government is. I think you look great.)

Under my tax plan, you would visit the doctor in January of each year and get a BMI number. That's your tax rate for the previous year. Think that might affect your holiday diet?

Proposal No. 2: Tax-free lottery.

Under my plan, we'll have an hour-long TV show each year, capped by a low-level Internal Revenue Service employee pulling out a four-digit number (maybe one every 15 minutes, building suspense). Anyone who has that sequence of four numbers to finish their Social Security number gets a full tax refund.

Bonus idea: Tell taxpayers they must file by March 15 to be eligible for the drawing. That would speed up the filing of returns.

Proposal No. 3: Make tax form smaller than a postcard.

People have advocated a simpler tax system for years – but they nearly always dictate what that means: It needs to be three pages or it needs to be the size of a postcard. How about this? We make it smaller. Much smaller. You can shrink anything – heck, a guy copied the entire Hebrew text of the Jewish Bible on a grain of rice. Let's shrink taxes by shrinking the tax forms.

If our tax code is broken, the solution is simple: A BMI rate (for corporate rates, too. We'll see if they're really fat-cat rich guys), a lottery show. And for those obsessed with size, a tiny tax form.

I guess this column should have appeared on the business page.

Reach Brad Stanhope at bradstanhope@hotmail.com.