Although the Internal Revenue Code began as a simple instrument designed to raise monies for use by the federal government, the passage of time has created a statute drastically changed in nature. Pressure on the Congress by a multitude of groups with vested interests, attempts by the legislators to promote "equity" in the Code, and tax breaks for social or fiscal policy reasons have wreaked havoc with the "simple" acts of bygone days. It is the purpose of this article to point out several specific areas which are in desperate need of modification or total elimination. However, it is not only with these specifics we deal. Our cry is much broader in scope; we intend to point out and explain how a revenue act may be structured so as to tax "real" income—"real" profits—without regard to social or fiscal policy, with the object being equal treatment for virtually all taxpayers and fewer controls by our Treasury Department over these policies. In Part I of the article, after setting out the longstanding congressional rationale upon which depreciation and capital gains taxation rests, we shall attempt to demonstrate how these areas of the statute may be modified in order that "real" profit is reflected. In these cases, "real" profit is defined as that amount of actual gain in value of goods or services which accrues or is paid to the taxpayer, taking into consideration the long term inflationary aspects of our economy. Part II sets forth the reasons for departing from what has long been considered "normal" tax policy and why a "simpler" Code would result from this departure. Finally, several provisions of the present Internal Revenue Code are examined with an attempt to point up why greater economies are achieved, and thus more revenue raised through their actual elimination.
Leslie C. Smith and Paul E. Sullivan,
The Taxation of "Real Profit": Towards a Laissez-Faire Revenue Code,
51 Neb. L. Rev. 258
Available at: http://digitalcommons.unl.edu/nlr/vol51/iss2/4