Saturday, January 28, 2012, AM | 2 Comments
We all know U.S. Tax Code is very confusing but I don’t know the reason why it’s confusing. I have not counted how many pages the good old IRS has on their website and how many they have printed out. But I keep reading that there are more than 10,000 – that’s ten thousand – pages out in the consumers’ hands. That’s gotta be a mistake – that many pages out must be in the hands of the tax professionals, not the consumers. Now that would make sense.
IRS treats tax-related small businesses well
The U.S. employment statistics tell us that an overwhelming majority of folks are employed by small businesses. That includes tax law offices and tax filing agencies. In other words, Congress of the United States is giving the economy a boost by making tax code complicated so tax-related small businesses would flourish.
I was reading a book and, at one point, it said
Our tax system is falling apart because it has become way too complicated. Tax breaks are not as helpful as advertised because many taxpayers can’t figure out how to use them. Tax increases don’t raise the expected revenue because many taxpayers are unwilling to spend extra time and money to comply only to get a bigger tax bill for their trouble.
I don’t understand the last sentence. Tax increases don’t raise the expected revenue. I would add the words “not necessarily” because it can’t be true all the time. If that’s the case, then why are some congressmen so anxious about raising taxes. Well, I guess that’s for politicians to decide.
So far as I am concerned, I just figure out what my income is, deduct the deductions, exempt the exemptions and whatever remains then I have two options – well, not exactly options, more like mandatory options. I declare the IRS owes me money or I owe the IRS and sign it.
It’s like the great Sherlock Holmes once said “It’s very easy to solve a murder case, my dear Watson. You eliminate the impossible. Whatever remains, however improbable, must be the truth.” That’s the logic I use whenever I do my taxes.
Patches won’t work
And the tax code is getting worse. Just in the last 15 months, Congress passed nine significant new tax laws. Every one of them added more complexity, and there will be more new laws before year-end. This is change we can be disgusted with.
Three years ago, I lived in an apartment in Vienna, VA. The sliding door in the living room was crooked. It still is. Now whenever I closed the door, there was always a notch open between the two sides. The management kept patching it up with – believe or not – scotch tape. The whole winter we had that cold Siberian draft coming in. Such a waste of energy. I kept telling them, patches are not gonna work. We need a complete overhaul of the door.
The same is true about the U.S. Tax Code. Patches make it more complicated. It needs to be overhauled completely. We need a more just tax code where the rich don’t get benefits of the numerous loopholes that exist today.
In a Nutshell
U.S. tax system needs a complete overhaul instead of patches here and there. Some experts need to look at it from top-down, bottom-up and every which way to see how to make it simpler for average Americans. To minimize my tax filing miseries, I use Tax Software to help me do my taxes.