I Know How To Fix This

I have no doubt that this will happen, the question is to what extent:

Tax pros now fear that tax evasion could go viral if the health-reform bill’s new 1099 requirement takes effect next year. They say more small businesses will likely opt to do all-cash transactions under the table to avoid the 1099 reporting requirement, and all of its onerous provisions, which are worse than small businesses may realize.

That's the direct opposite effect of what lawmakers had hoped for, and it would pose a bad development for the Internal Revenue Service, which for years has been under pressure from Congress to bring in more tax revenue. That revenue is needed now more than ever, as Social Security and Medicare teeter into the red, and as more states rely on federal revenue to fill their budget holes. 

The article goes on to report that uncollected federal taxes may be as high as $290 billion this year. Making even more people fill out even more time-wasting paperwork is not the answer. We live in a progressive and digital age and there lies the answer. With my modest proposal we can dramatically improve tax compliance and make life simpler for the American taxpayer:

1. Abolish all cash and coins. Cash is evil. It enables all sorts of crimes, from tax evasion to illegal drug purchases. In our time of instant processing of debit and credit cards cash is simply not needed. There are perfectly legal uses for cash right now that are more convenient to the individual, but alternatives can be developed. The good for the state(and what's good for the state is good for all of us) in the elimination of cash, as I will show in a moment, far outweighs any minor inconvenience to mere individuals.
2. Through the US Treasury Department, create individual income accounts based on social security number or business tax ID. All income must be sent to and received by one of these accounts, without exception. Every. Last. Cent. Wages, salaries, tips(think how much money the government will save just by closing that loophole!) interest...everything. Private bank accounts will not be forbidden, in fact they will become mandatory for each person or business, but they can only receive deposits to an account from a federal government individual income account. No other source is allowed. Want to give a friend or family member some money? Just drop it in their individual income account with a couple of clicks on your PC, or maybe someday a cell phone.
3. By tracking income type, the federal government can also help state and local governments close the gaps in their own income and sales/use tax enforcement that is costing those entities tens of billions of dollars each year.
4. The tax code would have to be simplified somewhat, but no more hassles with forms for individuals or businesses. Just log into your individual income account by the beginning of the year and set the deductions that you are eligible for. The system will calculate all of the correct taxes as the income comes in and forward what is left to your designated private bank account. 

Safe, secure, and hassle free. What's not to like? No, I haven't forgotten about barter and how people will be tempted to that. That can be countered though, with education about how barter equals stealing from the government which is really stealing from all of us and draconian, but unfortunately necessary, punishment for barter crimes. 

It is unconscionable that tax evasion is costing government at all levels hundreds of billions of dollars each year. We can deal with that though, in a way that doesn't add even more of a paperwork burden on Americans.