Tax Reform – Time to Get Down On It

Only one group of people likes our tax laws just the way they are:  the accountants.

Our tax code is so complex that nobody understands it.  If you call the IRS ten times to get a question answered, you are likely to get ten different answers – that is, if your call even gets through!  30 million calls went unanswered at last count in 2015.

No two CPAs will ever come up with the same tax liability given the same set of books.  It’s not their fault – the tax code was 75,000 pages a year ago (probably more by now).  And that’s a good thing, if you make your living doing tax returns.  For the rest of us, not so much.

Tax compliance costs almost a half-trillion dollars a year, and that doesn’t include the routine accounting that businesses do every day to determine their profitability. 90% of Americans think the tax code is too complex.

Finally there is an opportunity to do something about it.  GOP members of congress have come up with a tax reform plan that would reduce most individual tax returns to one simple page, eliminate most loopholes and targeted deductions, repeal the complex alternative minimum tax, and do away with business depreciation.

Oh, the humanity!  Tax accountants will be leaping from their first-story windows.  H&R Block will no longer have an office on every block.  Packages of TurboTax software will be relegated to the bargain bin at Ollie’s.  Corrupt and inefficient IRS employees will have to get real jobs that actually produce something of value.

More importantly, GDP growth will suddenly jump from 2.5% to 3%.  Then 4%, and upward. Eliminating the productivity drag of all that accounting, reducing tax payments, and deducting the cost of capital purchases from taxable income will give businesses and individuals a huge shot of economic momentum.

Of course this can only happen if Congress is convinced that voters give a damn.  Most of them would just as soon spend your money for you rather than let you do it yourself, and they enjoy controlling your behavior by controlling your wallet.

It’s way past time for tax reform.  Today might be a good day to pick up the phone and call your member of Congress and tell him or her to get down on it.

Tom Balek – Rockin’ On the Right Side

Get down on it, come on and
Get down on it, if you really want it.
Get down on it, you gotta feel it
Get down on it, get down on it

Get Down On It – Kool and the Gang

 

They’re getting a little gray, but they still got it going on!  It’s Kool and the Gang.