The National Taxpayers Union, an advocacy group, estimates American taxpayers spend 3.18 billion hours computing and filing their taxes. That includes record keeping, figuring out the new tax laws, completing forms and filing their tax returns, averaging 24.2 hours per taxpayer.
This year, corporate taxpayers spent an estimated $156.5 billion on tax preparation — almost half of the $354 billion in corporate income tax they paid last year.
Wouldn’t you think all those bean counters could put their calculators together and come up with an easier, more efficient way for Americans to finance our government? What about the flat tax promoted by Sen. Sam Brownback and others?
Posted by Patrice Hein
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7 Comments
I did mine with an H&R block CD and was finished in an hour, breaks and all. Helps to have all your stuff in one folder though.
We have a flat tax today. That is how it all started. A single tax rate, highly progressive as it only targeted the so-called rich. Now look at what the income tax system has become.
The Fair Tax is a much better government revenue system than a flat tax. If for no other reason than you do not have to report your financial doings to the government solely so you can be taxed.
http://www.fairtax.org
A flat tax is not the panacea it is made out to be. The difficult part of doing taxes is getting to line 43; not getting from 43 to 44. Even the hassles of AMT pale in comparison to that. I don’t see how having a flat rate from 43 to 44 will simplify the process.
Why not have no income tax at all? It worked for most of the history of the US.
You are missing the real point!
Don’t get me wrong, I like the idea of a flat tax. However, as a tax professional I must also be a realist and inform you that it is not going to happen. Why? Because the federal tax code has become our elected officials’ greatest tool for control over the American people. Most new tax legislation has a either a large component of social engineering or it is enacted as a symbolic appeasement for an elected official’s constituents.
Tom, I agree that a flat tax isn’t going to happen. “Social engineering” may sound a bit strong to some, but the Code has been used since at least 1939 to control behavior (economic) to obtain certain goals believed desirable by Congress and others. Examples: deductibility of mortgage interest (help the construction industry, provide an incentive to obtain a residence); investment credit (encourage investment in new PPE after the relative flat investment in same during the post-WWII era); accelerated depreciation (encourage investment in new equipment); earned income credit (reward low-income “taxpayers” for getting a job, rather than direct welfare or other public assistance payments); I could go on, but I think the point is made.
You note I don’t list the different treatment of capital gain income; frankly, I don’t think this really encourages capital investment all that much. One change I would make to the existing law; allow the first investor directly investing in the corporation, other entity, to cash out at no tax cost on his/her gain; same with stock acquired through dividend reinvestment plans. Subsequent purchasers would pay tax on same at OI rates. Rationale: only the first purchaser’s money goes to the enterprise; subsequent purchasers are along for the ride, dividends, appreciation in value resulting from successful operation of the business, but their money went to the prior holder of the stock, etc. and not to the enterprise. Thus, the subsequent purchase and sale does nothing for capital formation, etc. in new enterprises, new ventures of exisiting businesses, etc. My two cents.
Because the federal tax code has become our elected officials’ greatest tool for control over the American people. Most new tax legislation has a either a large component of social engineering or it is enacted as a symbolic appeasement for an elected official’s constituents.
Posted by: Tom | April 19, 2007 at 02:57 PM
Few truer words have been spoken about the current tax system