Form EZ-C

Schedule EZ - C	1998
1. Name of Company	Tax Id #
2. Gross Receipts	$
3. Type of Industry	Industry Tax Rate
4. Tax owed (multiply line 2 by line 3)	$
Industry Tax Rates Note : The Industry Tax Rate is based upon the average tax owed on Gross profits using the median percent of gross paid in taxes by similar size companies in that industry using the long version of the tax code for determining overhead and other deductions. Companies with higher than average overhead costs and/or extra deductible expenses might consider using the long forms. If your company's income is based upon several different types of products and services with different tax rates, you will need to fill out an EZ-C for the income from each type of product and/or service, or use the long forms to figure your adjusted income and tax owed.

Does the EZ C seem too easy to ever be implemented? Think again. An operational version of the EZ-C is found in Washington State's Business and Occupation Tax (B&O tax). While the B&O tax is as disliked as any tax, it does work, it isn't a complicated income tax on businesses and business owners, it is simple to figure out, and doesn't get in the way of productive people being productive and being afraid of running their own business. Additionally, it should be noted that WA's B&O tax does allow for a few specific deductions. For example, gross revenue from exports is exempt from taxation. It may not be coincidence that some of our nation's largest exporters (Boeing, Microsoft, Intel, etc) have production facilities in Washington State. In many respects, the B&O tax is a close cousin of a VAT tax, only much simpler and fairer.

One advantage of an EZ-C is that those few companies that do need to use the long forms because of unusual deductions such as start up costs or damage from fire could still use the long forms and full deductions. Those many people who wish to try running their own company will not be dumped upon by piles and piles of paperwork and confusing tax regulations created by politicians in an effort to micromanage everyday business decisions. If your company makes widgets with a 4% industry tax rate, with the EZ-C you will know that 4% of every widget sale will go to pay federal income taxes, the rest you use to make more widgets, pay your overhead, hire more workers and make a reasonable income.

Another advantage of the EZ-C is that an IRS audit wouldn't be some complex accounting procedure that required a business to bring in box loads of every expense and deduction a company had. All that mattered would be an accurate accounting of gross receipts, which is generally a simple bookkeeping exercise. This is discussed further in the written testimony on the EZ-C submitted to Congress in April 1996.

Of course, if ever implemented, we run the risk of freeing up politician's time now spent micromanaging business activity to do focus on converting some other non-problem in to a problem. Oh well, perhaps that can be dealt with too.