True G.R.I.T- A True Graduated Rational Income Tax System

By James LaHam

This book sets forth the most comprehensive rewrite of the Internal Revenue Code since the 16th Amendment was passed in 1913 authorizing Federal Taxation. Tax rates in the new fair tax system range between 0 and 25%, and the entire Internal Revenue Code is drastically simplified for everyone. The Estate Tax is eliminated, and the new system levels the playing field for business taxpayers. For the first time ever the tax law will treat businesses fairly and consistently. The intense fear of the IRS will be eliminated as the frightening threat of an IRS Audit is eliminated in the new fair tax system. The IRS will serve in a new role of assisting taxpayers instead of inflicting pain and agony. The concept of a true fair tax is often talked about, but this book actually sets out a bold new course for a fair, rational, sensible, stable and predictable tax system. The author is a seasoned CPA Tax Expert that has practiced in the tax world for 40 years, and understands the flaws of our current tax system and has created a new system to fix it.

• Language: English
• Publisher: James LaHam
• Release date: Aug 2, 2012
• ISBN: 9781476238173

Book preview

A TRUE GRADUATED

RATIONAL

INCOME TAX SYSTEM

(TRUE GRIT)

By James S. LaHam, CPA

Copyright 2012 James S. LaHam, CPA

Smashwords Edition

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RETURNING POWER

TO THE PEOPLE

DESTROYING THE

INTERNAL REVENUE CODE

AND

ABOLISHING THE INTERNAL REVENUE SERVICE AS IT EXISTS TODAY

The Most Comprehensive Rewrite of the

Internal Revenue Code

Since the 16th Amendment

Was Passed in 1913 Authorizing Federal Taxation

Table of Contents

Dedication

About the Author

The 16th Amendment to the US Constitution

Introduction

Chapter 1 - Why this Book?

Chapter 2 - Abolishing the Internal Revenue Service (IRS) UNLIMITED POWER; UNLIMITED RESOURCES; UNLIMITED TIME; UNLIMITED MONEY

Chapter 3 - How Bad is Our Current Tax System?

Chapter 4 - The Fix-Can It Be Done? It Will Take Courage

Chapter 5 - Individual Taxes 0% to 25% Graduated Rates; A Complete Overhaul

Chapter 6 - Low Income Taxpayers - Making Life Easier for Them

Chapter 7 - Retirement Plans - The Great Abyss - Rules, Rules, Rules….

Chapter 8 - Business Taxation - Not Business as Usual - A Complete Rebuild

Chapter 9 - Business Taxation - The Solution - Chaos to Order

Chapter 10 - Corporate and Foreign Taxation - Top Tax Rate of 25%; A Boost for Corporations - Giving Them a Competitive Edge

Chapter 11 - The Estate Tax – Gone for 99.965% of Us and Happily Forgotten

Chapter 12 - The New Affordable Health Care Tax Act

Chapter 13 - Transitioning to the New Fair Tax System

Chapter 14 - Fiscal Responsibility - Is the New Fair Tax System Neutral or Too Good to be True?

Chapter 15 - Where Do We Go From Here?

Appendix A - New Fair System Form 1040 – Individual Tax Return

Appendix B - Case Studies

Appendix C - Internal Revenue Codes Deleted or Simplified in the New Fair Tax

Dedication

This book is dedicated to my wife Michele, and my daughters Andrea and Noelle for their encouragement to write this book.

About the Author

James S. LaHam, CPA, CSP

Mr. LaHam is currently the Senior Tax Partner of Berman Hopkins Wright & LaHam CPA’s and Associates, LLP, a large Central Florida CPA firm with offices in Orlando and Melbourne Florida. He has been in this role since 1989 and also served as the Managing Partner for 14 years.

LaHam is an expert in federal taxation and specializes in business tax structures, tax strategies, sales and acquisitions of businesses, succession planning, and IRS tax examinations and controversies. He is a frequent writer, speaker and trainer on various tax and business subjects.

He graduated in 1973 from Loyola University of New Orleans, and was valedictorian of the School of Business.

LaHam’s previous employment follows:

- Vice President of Corporate Taxation – American Pioneer, Inc. Orlando, Florida

- Senior Tax Manager - Deloitte Touche, Jackson, MS

- Partner – Braun, Preboske, LaHam & Brettingen CPA’s, Antigo, WI

- Corporate Accountant – 3M Company, St. Paul, MN

- Staff Accountant – KPMG, New Orleans, LA

Jim LaHam grew up in Antigo, Wisconsin, has been married 39 years to his wife Michele, and has two daughters, Andrea and Noelle, and three grandchildren. He enjoys tennis, outdoor sports, reading, movies, travel and cuisine.

The content, opinions and views in this book are strictly that of the author.

The Sixteenth Amendment to the United States Constitution

Ratified on February 13, 1913

Congress shall have the power to lay and collect taxes on income, from whatever source derived.

The hardest thing in the world to understand is the income tax. Filing tax returns is too difficult for a mathematician. It takes a philosopher.

Albert Einstein, Physicist (E=mc2)

Introduction

Former Treasury Secretary William E. Simon Said The United States Should Have a Tax System That Looks like Someone Designed It for a Purpose.

The fair tax concept, by its very nature, is almost impossible to argue against. On April 4, 2012 USA Today said it best in their Editorial:

A plan doing away with virtually all deductions, credits, exemptions and exclusions, and uses the additional revenue to lower rates or reduce the deficit, is opposed by no one in principle. But once the details emerge, armies of lobbyists emerge.

Let’s begin by making it clear that the new fair tax system being presented in this book IS NOT A FLAT TAX SYSTEM, as a pure flat tax system has only one tax rate for all income, and can disproportionally tax the poor. This new fair tax system will preserve the graduated income tax concept to ensure that the less fortunate are not unfairly taxed.

Take a look at who has knowingly or unknowingly endorsed the new fair tax concept.

1. President Obama’s Deficit Reduction Commission in 2010.

2. George W. Bush’s Tax Reform Commission in 2005.

3. President Obama and Warren Buffett have said repeatedly that the rich should pay no lower a tax rate than janitors and secretaries. This new fair tax system will make sure of that.

4. Mitt Romney has recently stated that lower marginal rates secure for all Americans the economic gains from tax reform.

5. N. Gregory Mankiw, Professor of Economics at Harvard University, wrote a compelling article for fair tax reform in the NY Times on January 22, 2012 titled A Better Tax System- Instructions Included.

6. Senate Budget Committee Chairman Democrat Kent Conrad of North Dakota has said tax loopholes are subsidies, and subsidies are not the type of thing you want for an efficient market system.

7. Steve Forbes, Editor-in-Chief of Forbes Magazine has been a torch bearer for a fair tax system since the early 90's.

8. John C. Bogle, Former CEO of the Vanguard Group, asked in an Associated Press article on December 25, 2011; Is it fair for gamblers on Wall Street to pay a 15% rate when they make a winning investment, and an honest working person - a brick layer for example - pay a higher tax on their wages than a gambler? That's absolute absurdity.

9. Most importantly, regular Americans favor a fair tax model that preserves the graduated rate system, while greatly simplifying the system and lowering rates.

10. Is it possible to completely rewrite our entire tax system? It is most certainly possible,