Transcripts

"Commentary"-What's Behind the Tax Gap

SUZANNE PRATT: Tonight's commentator says now is the time to close the tax gap. Here's Irving R. Levine, dean emeritus of international studies at Lynn University and former chief economics correspondent at NBC News.

IRVING R. LEVINE, DEAN EMERITUS, INT'L. STUDIES, LYNN UNIVERSITY: The presidential candidates have had a lot to say in their TV debates about cutting taxes or raising them. But there's another tax issue the candidates should be debating -- the issue of how to close the tax gap. The tax gap is the dollar difference between what taxpayers owe and what they actually pay to the U.S. Treasury. The government estimates the tax gap at $244 billion, a sum that would more than cover last year's Federal budget deficit.

The gap is created by taxpayers who cheat on their taxes or simply don't file. One reason for taxpayer delinquency may be the complexity of the 66,000 pages of tax rules. The best way to simplify taxes would be to replace the present income tax system with a national sales tax. A national sales tax would make it difficult to cheat, because every time a person bought just about anything, he or she would be paying the sales tax. A national sales tax would have to be set high, at around 23 percent, to even match current revenue. But a national sales tax would virtually eliminate time-consuming tax forms and tax audits. And it should help to close the costly tax gap. I am Irving R. Levine.