Larry Banman " Flat tax could smooth tax season’s bumps
For the first time in several years, I won’t have to apply for an extension to file my income tax reports at the federal and state level. I don’t know why I have been filing for an extension. I always wait until the last minute, regardless of when that last minute occurs.
So, it was with a great deal of joy and relief that I packed all of my forms and reports into a packet that now goes to my accountant. My taxes are just complicated enough (or I am just dense enough) that having a professional work on my taxes has more than paid for the fee of preparation. Although I feel a bit like gloating, I know there are some who have already filed, received a refund and spent that refund.
My daughter would be one of those who has received her refund. She and her husband had extra incentive this year, because they had a little tax deduction arrive this past September. In addition, she has become so sickeningly organized that filing taxes for her is little more than pushing a print button when she has received all of their W-2s. She has one of those accounting programs that summarizes a person’s yearly activities in the time it took you to read this sentence. Of course, you have to enter your expenses faithfully throughout the year and therein lies the rub (at least for me).
Even though I finished my taxes on the first day of March (as opposed to Oct. 1), I was struck with some of the same impressions that hit me every year.
A flat tax sure seems to make a lot of sense. I think the latest figure I heard is that the country would need to tax all of our income at about 15-20 percent to be able to operate. I am not enough of an economist to know what that would do to sparking economic growth, capital expenditures and entrepreneurial growth. I do know that it would save me at least 50 hours of work each year (roughly a week’s vacation by my reckoning). I am envisioning a simple form: Line 1 – Income; Line 2 – Multiplying Factor; Line 3 – Your Tax. I am pretty sure that there would be a lot fewer mistakes and a lot fewer people worried they made a mistake.
Like everybody else, I am always amazed at how much money I made the previous year. It isn’t that I made lot of dough, the amazement comes from the fact that I have no idea where that money is now. In 2007, I had enough income that I should have been able to afford at least two trips to Mexico. However, at the end of the year I found myself using a fence-stretcher on my paycheck to make it cover expenses. The cost of acquiring all of that income was greater than the income itself.
The perception problem is primarily because the deductions that are allowed don’t come close to including all of the things that eat money during the year.
Last year at this time, we were all looking forward to our “Bush Money.” Remember the economic stimulus payment that we all received?
This year, we find ourselves again waiting for an economic stimulus from Washington, D.C. I don’t mean to be cynical, but the answer isn’t going to come from the banks of the Potomac. The answer, as always, will come from individuals and from small businesses. If there is going to be change, it will have to originate from Main Street America.
As I finished my taxes, I noticed that I was out of checks. That’s good news. Apparently, I am out of money.
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