'Tis the Tax Season ( Time to think of voting for people who will SIMPLIFY our tax code )

Yes, it's that time of year when most of us begin the arduous task of completing our 2009 income tax returns. I just received a tax-planning memo from my accountant highlighting the new tax credits available under the American Recovery and Reinvestment Act of 2009.

Along with a listing and description of these credits, such as First Time Homebuyer, Energy Efficiency and Renewable Energy, and Alternative or Electric Drive Motor Vehicle, my CPA added this comment:

I can't refrain from getting on the proverbial soapbox to point out that the Internal Revenue Code is no longer a body of tax law, but a body of social policy. In analyzing those credits, note that each one provides society with a type of tax credit which Washington DC believes provides good public policy, provides economic stimuli, or assists lower income taxpayers (e.g., the "redistribution of wealth"). But as those credits are available, it is our responsibility to advise you of their availability.

Ah yes, the Tax Code: the Progressive's tool -- or should I say weapon? -- of choice.

Most of these new credits are given for buying stuff. We're supposed to buy stuff to help boost the economy, right? That's supposedly what the Stimulus was for, all $787 billion of it. You just need to make sure you spend your own money on the right stuff, like an electric car, energy efficient water heater, or new insulation. Don't worry if the cost of that expensive new energy-efficient item minus your tax credit and future savings on energy bills means a payback that won't be realized until well past your life expectancy. Tighten your belt, and don't blow your money on a boat or a trip to Las Vegas.

Not only have the tax codes become a "body of social policy," but they have also become so complex that even the head of the Treasury Department needed his hand held by Turbo-Tax when he filled out his own tax return. Apparently, though, even that software program wasn't helpful enough.

The latest figures I could obtain from a quick Google search put the Code at a staggering 8,500 to 10,000 pages, in very fine print, and excluding related IRS regulations and guidance. I am sure that the many creative minds reading this can offer a more descriptive title than "Internal Revenue Code" for this weighty tome.

Back in 2008, an intern with the Tax Foundation calculated that it would fit on eighty rolls of toilet paper. Now, there's an innovative idea. Dual Purpose -- use it to complete your return, and then reuse it in the powder room. Environmentally friendly and energy-saving! Would that qualify for a tax credit?

CPAs and tax preparers arguably profit as the laws become more complex, but the government plans to control even this business pursuit, with the IRS placing minimum testing requirements on the non-professionals. If you think the CPA exam, LSAT, MCAT, GMAT, etc. are tough, the ACAT exam will have to cover thousands of pages of intricate rules and regulations.

Many parents of college-aged kids add the FAFSA, or the Free Application for Federal Student Aid, to their growing stack of forms to complete, and they fill it in using their prepared income tax returns. Other college supplemental financial aid applications are also based on tax returns, such as the CSS/Financial Aid PROFILE, but, frustratingly, they usually have deadlines well in advance of the returns themselves. Most include a question such as: "How much are you willing to contribute towards the cost of education?"

I propose a similar question, just below the "Tax Due" line on the tax return, posed in patriotic terms so taxpayers will feel more generous. Vice President Biden could help pitch that one. The line could be called "Alternative Patriotic Tax" -- APT for short.

Speaking of acronyms, don't you love all the technical jargon thrown around this time of year? K-1s, 1099s, W-2s, AGI, NOL, RMD. That's RMD, "Required Minimum Distribution," and not WMD, and it has to do with IRAs. (If you forgot to take your RMD before December 31, you may be SOL.) It is so confusing. Once a friend of mine ranted on about having to pay the AMT (Alternative Minimum Tax), and all the while I was wondering why she didn't just go find a bank, like mine, that charges no service fees for its ATMs. And what about the poor guy who was dying and got UPS instead of CPR?

Which reminds me of HCR (the 2,000 pages of Health Care Reform) -- and if the latest version passes, it will add even more complexity to the tax returns, requiring citizens to use them to report details of their health insurance. If these questions are near the end of the return, it would probably help drum up business for insurers and health care providers, since by the time one gets to that point of the form, he'll be feeling rather ill.

If you are feeling really dizzy by now and you are a successful small business-owner wondering if your estate will be subject to the death taxes, you'll be happy to know that the Senate is considering giving you an option to prepay them at a reduced rate. So if you are too sick to know any better but not ready to die yet, you can go ahead and pay them now, and be comforted that you are doing your part to help with the deficit when the country needs it most. You will probably, however, have to sell your business and let your employees go to come up with enough cash, but at least you can get that done while you're still alive rather than leaving the job to those you leave behind.

Go and sharpen those pencils. Bring out the box of check stubs. Pour a drink. Hug an accountant.

Don't procrastinate. I'd better not see you on the local news standing in line at the post office on April 15.

Paul Ryan’s Roadmap for America allows tax payers the choice of filing the traditional way ( assuming they love to navigate the maze of deductions and exemptions and determining what or what does not constitute income ), or filing the FLAT way ( the size of a post card ).

IF we vote for politicians who do not support the Ryan alternative (which is a great step, IMHO), we deserve everything we get.

“’Tis the Tax Season ( Time to think of voting for people who will SIMPLIFY our tax code )”
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*******************************Just shows to go ya how brainwashed we are!!!!

We don’t owe anyone taxes!!!!!

Taxation is robbery—pure and simple.

The gubmint wants $$$ let em do bake sales, work even!

Tax all those ****ing BMWs, wetbacks, goods/bads from china, etc.
THAT’s Simplification!

Forget Paul Ryan, he is ignorant of tax history.

The Income tax started as a flat tax and it always grows into a metastatic cancer.

Since 1913 there have been 5 major tax reforms and each one made the tax code simpler and flatter.

And each time it comes back with a vengeance.

There is a reason that it does this.

It’s called the 16th Amendment which is a de facto business license for the tax gaming industry inside the Beltway.

Since the last major tax reform under Ronald Reagan in 1986, there have been more than 17,000 amendments to the tax code and a quadrupling of the number of tax lobbyists inside the Beltway.

The Tax Favor Trading business is a game between the IRS (Treasury), Congress and the Tax Lobbyists. Often tax lobbyists are former IRS or Congressional or treasury staff. The lobbyist positions with the most salary and perks go to those that held the highest positions before they passed through the revolving doors between playing teams. For example, lobbyists comprise former IRS commissioners, former US Senators etc.

The point is that Ryan is offering or suggesting NOTHING NEW under the Sun in the tax corrupt extortion racket inside the Beltway. His ideas are NOT NEW and have been tried before with no success.

Now we need to ask ourselves WHY in the world would we support someone like Ryan who is peddling the same crap that has come before and has never worked? It’s insane.

People that study the problem comprehensively come to the answer for the tax cancer and its ability to always reappear after a decade or so of remission. It’s called the FairTax and it is brilliant. It is so brilliant that it has the Tax Gamers in panic and they have invested hugely in smearing it much in the same way that the media is now engaged in smearing the Tea Partiers.

http://www.fairtax.org

Tell Ryan to buy a clue.

While I applaud and would support a proposal such as Congressman Ryan’s, it still requires documentation, record keeping, and reporting of one’s income to the government. It should NOT be the government’s, nor anyone’s (except maybe divorce lawyers)business what a person’s income happens to be! A tax system that is not cumbersome, fraught with cheating, simple and already in place would be even better than Ryan’s flat two-tiered approach and that is a national consumption tax. Would politicians approve of this... not likely as it would negate their ability to socially engineer society by utilizing tax law to alter behavior as they presently do with wreck-less abandon!
This system would not only simplify tax collection, but unleash a job and business climate that would explode hiring and production. The uncertainly of today’s tax/health care/regulatory climate is unnecessarily restraining small business growth and large business expansion.
If the politicians would unlock the shackles of the tax code on business this economy would expand exponentially - spending would increase as pent-up demand would be unleashed and the overall revenue to the government would increase.
Now if they would couple that with government reduction in expenditures and control of the deficit, perhaps we can leave this country better than we received it - our children’s children deserve that!

Here are more IRS stats:

The tax code is more than 67,500 pages.
The cost to run the IRS is approximately $11 billion.
The IRS has 100,000 agents.
Income tax compliance costs more than $350 BILLION per year.
Americans sending their personal and business liquid assets, worth around US$13 TRILLION, overseas.
The IRS accepting bids from vendors to purchase 60 12 gauge shot guns.

All these stats can be drastically reduced by insisting Congress pass the Fair Tax Act(HR25/S296) that will replace all federal income taxes with a national sales tax and abolish the IRS. Fair Tax ping!

The latest figures I could obtain from a quick Google search put the Code at a staggering 8,500 to 10,000 pages, in very fine print, and excluding related IRS regulations and guidance.

And don't underestimate that "guidance" bit. A few years ago I was working as an accountant for a company and was trying to deal with CA sales tax related to internet sales (the company I was working at was not located in CA, nor did we have an office there). I had to submit my questions in writing, and I received a response that had the caveat that it was not the "official" answer. that is to say, the official answer was that they didn't want to be held to whatever answer they might come up with so they left me hanging with risk because they didn't want to risk an answer regarding their own tax code. Now that's a sales tax issue and not the federal tax, but it just goes as an example of "guidance".

Don't forget the US$2 TRILLION involved in the underground economy that is almost unreachable by the IRS.

In short, FairTax replacing Title 26, the Internal Revenue Code, does this:

1) Saves the government US$11 billion per year in government costs.
2) Saves Americans somewhere between US$350 and US$500 BILLION per year in tax compliance costs.
3) Brings back US$15 TRILLION in American-owned liquid assets into the US financial system.

The resulting change would send the stock market rocketing upward in no time flat. And that's outside of millions of jobs returning to the USA because of no more taxes on earning money, which drastically lowers the unemployment rate and bumps up economic activity to unprecedented levels.

Is there a coordinated effort to use the objection clause to stop paying social security payroll taxes? As you are probably, aware the Amish can legally claim a religious exemption to the payment of social security taxes. Other cases of conscientious objection (I believe to selective service during war for example) do not require the objector to be a member of an organized religious group but only hold a personal philosophical conviction.
Perhaps a Facebook page with information on government forms and legal information could be started. This could be our loophole to non-violent resistance to unfair taxes.
This could also be a demand especially by young people to demand that the Federal government reform social security.

In American politics, what works is usually — evolution, not revolution.

People do not want something presented to them in one BIG BANG, but a series of small steps so that they can digest the small changes to see if they work.

THAT is the big mistake with Obamacare.

The same will be true for those who keep harping on the FAIR TAX. It won’t be accepted by most people today. Better to make the change evolutionary. That’s what Paul Ryan’s alternative flat tax is all about for instance. Start with that first, and when people are comfortable with the idea that we can do away with tens of thousands of pages of tax code, then we can talk about the Fair Tax but not until.

In American politics, what works is usually — evolution, not revolution.

People do not want something presented to them in one BIG BANG, but a series of small steps so that they can digest the small changes to see if they work.

THAT is the big mistake with Obamacare.

“That’s what Paul Ryan’s alternative flat tax is all about for instance. Start with that first, and when people are comfortable with the idea that we can do away with tens of thousands of pages of tax code, then we can talk about the Fair Tax but not until.”

Almost true. Ryan’s tax is not “flat” since it includes two brackets (10% and 25%) and retains exemptions and tax credits which make it highly “progressive” and retains social policy weapons. A truly “flat” tax without any deductions, exemptions, or credits would only require the 10% rate to garner the same revenue as the existing income tax code. I’d love to see the people who would try to complain that 10% of their income was more than they could afford to contribute to paying for the national defense, judiciary and other “discretionary” spending. Could anybody do that without everybody seeing them for the freeloaders they currently are ?

The FairTax is a bad idea. It attempts to force a higher effective tax rate on high achievers while leaving low achievers as tax freeloaders by rebating them all their tax payments. Just another punishing “progressive” tax grab on achievement. But it has a legal tax avoidance mechanism — simply make your money in the US but live and spend your money elsewhere — the wealthy high achievers will jump on, leaving a huge hole in the projected tax revenues. So no taxes on the rich and no taxes on the poor means the middle class would see its tax burden DOUBLE.

You shouldn’t reward low achievement by exempting the poor from taxation, and you shouldn’t make the tax rates on the high achievers into a punishment. This means low rates and completely flat without any exemptions or deductions that make them progressive. A 10% flat income tax on individuals only with no corporate taxes, together with a 10% NRST with no rebates would be my choice for actually pulling in the same revenue as the existing Income+FICA taxes while promoting GDP growth.

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