Read my lips raising/lowering taxes will not fix anything, a study in futility.

This was sent to me by a brilliant Cornell University Student, who also happens to be my cousin:
After listening to the presidential and vice-presidential debates, I realized that the issue of taxation on corporations and individuals seems to be a ubiquitous theme. McCain/Palin explaining that Obama/Biden will raise taxes and Obama/Biden commenting that McCain/Palin will give more tax breaks to the wealthy and corporations. The problem here is that one of the solutions that was proposed by the two campaigns will do nothing to increase global competitiveness and create equity between classes (in reference to taxation, not redistribution of wealth). The argument should not be able lowering or raising taxes but rather on the reformation of the current tax system. Hopefully, I can try to shed some light on something that has been constantly looked over. I will not get too detailed because I believe one should make up his/her own decision through research and reasoning. Let’s first take a brief look at the current tax system.
Brief, would be an understatement in this overview but I rather focus on the actual issue than arguing about semantics about how the IRS works. Here it goes. Federal tax law in the United States is regulated and administrated by the IRS. The original goal of the tax law was to raise revenue for the federal government. Throughout the years amendments have been added and acts have been signed that have made the system even more of a complex process. The system is progressive, as income goes up so do the applicable rates. The government also allows exemptions under the current tax policy. They reward individuals and corporations with tax deductions. That’s basically it in a nutshell. Oh and don’t bother looking at the tax code its about 9-10 million words long.
We need to grasp the concept that taxes are here to stay and regardless of your feelings towards them, you will also pay taxes. The government does need revenue to make sure that the 10% approval rating congress has light and power to filibuster in the chamber. Additionally, increasing or decreasing taxes will never create that equity that we so “patriotically” strive for. One may pose a question such as why not just continue lowering tax rates? The problem is that tax reform acts that were passed in prior administrations have been used as political leverage and disregard the need to completely revamp the current tax code. With every reform that is passed new exemptions are created. Increase in taxes create tax avoidance issues. So if Obama/Biden want to increase taxes, I can almost guarantee that the citizens they want to make more “patriotic” will find ways to avoid them and here you will observe the catalyst for the corruption that they want to destroy. Look up the Tax Reform Act of 1986 and the S chapter explosion after the passage for an example.
The United States has the second highest corporate tax rate in the world. The effects on society are extremely visible. Less jobs, lower business growth, and the most important significantly lower attractiveness for Foreign Direct Investment (FDI). We complain about all those things, yet we see politicians putting the blame on companies such as Nike, GM, and Microsoft. Do you think any reasonable person or company would say, well country A has a corporate tax rate of 15% but the US has 40%, I think I’ll go to the US. No dummies! If you know someone that would, then please make sure that they go back to business school. The fluctuation of the tax rate also goes into decisions of investment and allocation of resources. If rates were high why would a company invest in new machines, workers, or etc?
If you take the last point in terms of regular citizens in society, the tax system creates somewhat of an uncertainty for workers. If the tax rate constantly fluctuates up and down, workers have no idea if they should increase or reduce hours of work. For example, if I knew that the tax rate was a constant percentage all the time regardless of income, I would ensure that I worked to the marginal rate that would allow me to be financially solvent as well as happy. I would also know that that I could if I wanted to work more hours.
To do a quick wrap up. If you have heard of these concepts, then you are particularly informed. If not but this makes sense to you, then you are beginning to be informed. There are two solutions out there. Either the Flat Tax, which has been proposed by Steve Forbes and others, or a FairTax which is essentially the same but is more focused on a national retail tax. Do your homework, read up on these ideas and make your own decisions. I recognize that there may be criticisms of both systems. But seriously people, putting a band-aid on a flesh wound (fixing the current system) will be a lot more painful.
Taxes have become a buzz word for political campaigns. Often we see a candidate ramble on and then mention he/she will be changing the current tax and the American people react. Not to the nonsense that was spewed before but to the word taxes. If you reform the system completely, politicians would be able to focus more times discussing issues that actually matter (education, defense, welfare, etc).