Like the Screeching Whine of the Drill – It’s Tax Time!
The ticking clock grows increasingly louder as we draw ever closer to taxation “D-Day,” Some stellar Americans submitted their returns long ago. Others of us are sitting at our desks, frantically wading through piles of receipts, tax schedules, and IRS instructions. Those who don’t want to deal with the hassle of DIY taxes are hurriedly packing everything up and sending it off to their accountants. As is the case with most other baffling ailments, if we don’t like the prognosis from one accountant, we send it off to another for a second opinion.
Rasmussen Reports is recognized as one of America’s premier organizations specializing in the collection, publication, and distribution of public opinion information. In a recent telephone survey, 1,000 randomly selected Americans were asked how they felt about the process of completing their income tax paperwork. Rasmussen’s results show that 50% of American adults would essentially prefer a root canal to completing the process. My only comment is that the other 50% must have no deductions and simply submit a 1040EZ return. If the preparation of tax returns is this intense for private Americans, it is little wonder that most corporations need a virtual army of tax attorneys and CPAs to complete the task.
Over the years there have been many suggestions on how to simplify our tax code. First we have the Flat Tax. This system would eliminate the current progressive-rate tax system. It would apply the same tax rate to every taxpayer regardless of income bracket. A 10% rate is the general consensus. There are no deductions or exemptions allowed.
Then there is the Fair Tax, a national retail sales tax that again starts by totally dismantling the IRS and instead raises revenues by taxing consumption at the point of sale with higher retail sales taxes. The theory is that people would get to keep their entire paycheck, and their spending habits would dictate how much tax they pay.
During the 2012 Republican primary debates, Herman Cain rolled out his “9-9-9” taxation plan. This plan would eliminate all current taxes, such as payroll tax, capital gains, tax and the estate tax, and replace them with a 9% business transaction tax, a 9% personal income tax, and a 9% federal sales tax.
And finally, as a part of his “Roadmap for America’s Future,” Congressman Paul Ryan addressed Federal tax reform. His plan offers individuals a choice. Taxpayers can choose to pay their federal taxes under the existing code, with all the familiar deductions and schedules; or they can move to a simplified income tax system. Congressman Ryan’s plan broadens the tax base by clearing away nearly all of the existing deductions and credits, and compresses the tax schedule down to two low rates. It also retains a generous standard deduction and exemption level. The Congressman contends that a tax form for this system would “fit on a postcard.”
I have only laid out some of the most prominent tax reform plans. I did not include any other colorful suggestions from the American taxpayer. Needless to say, with all the red tape that exists in Washington, and all of the bureaucrats clinging to the security of their government jobs, trying to implement any of these plans would be an enormous undertaking. It is highly unlikely that any of them will be in place anytime soon. So let’s make just make that next dental appointment right now. How about Tuesday, April 15, 2014. Will that work for you?