The tax code is a disgrace, the IRS not much better
So says the nation's tax ombudswoman, and as usual, she hits the nail right on the head.
Comments (9)
"individuals and businesses spend about 6.1 billion hours a year complying with tax-filing requirements. That adds up to the equivalent of more than three million full-time workers, or more than the number of jobs on the entire federal government’s payroll."
Another big reason America can't compete with the rest of the world. Just think if we put that time into research and innovation.
Lawmakers "need to" overhaul the tax code completely. Uh-huh. How many light years separate "need to" from "ever will?"
I've probably said this before, but my father in his days of legal practice used to say that a tax attorney who specialized in nothing else could have a working knowledge of only a small portion of the tax code, so voluminous was it in special riders, provisions and interests jumbled together with no cohesion or core. I'm sure it's gotten only worse -- much.
The thing that irks me the most as a small employer is that it's my obligation to deal with all of the withholding taxes, etc. Truly, I avoid hiring people because I hate dealing with all of the red-tape and extra costs above their base wages. I hire people to do the taxes for me, but I really don't know if they are doing it correctly.
Everyone wants a simpler code but are they willing to give up their tax break to get it? One mans loophole is another mans cherished deduction. And payroll is a nightmare of compliance and contingent liabilities. No wonder people hesitate to take on employees.
cc, if you include the mortgage interest deduction, tuition deduction/credits, student loan interest eduction, the EITC*, and various child tax credits, almost EVERY taxpayer has tax breaks, most of them bigger than the loopholes many companies get.
*To be fair, this is actually a welfare program that happens to be administered by the IRS
Yes, Zach, almost "every" taxpayer has breaks, but the vast majority of taxpayers file the short form and the benefits of the sacred home mortgage deduction go primarily to households in the top 10-15%.
There's little question that the tax code is intentionally incomprehensible nor that the majority of its provisions benefit the more well-off.
I would favor a progressive flat tax with no deductions and lower rates. Roughly half of all income the the U.S. is not subject to taxation. Broadening the tax base, eliminating all deductions, keeping it progressive, and lowering the rates is what I would do if I were king... :)
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Comments (9)
"individuals and businesses spend about 6.1 billion hours a year complying with tax-filing requirements. That adds up to the equivalent of more than three million full-time workers, or more than the number of jobs on the entire federal government’s payroll."
Another big reason America can't compete with the rest of the world. Just think if we put that time into research and innovation.
Posted by Tim | January 9, 2013 1:14 PM
Lawmakers "need to" overhaul the tax code completely. Uh-huh. How many light years separate "need to" from "ever will?"
I've probably said this before, but my father in his days of legal practice used to say that a tax attorney who specialized in nothing else could have a working knowledge of only a small portion of the tax code, so voluminous was it in special riders, provisions and interests jumbled together with no cohesion or core. I'm sure it's gotten only worse -- much.
Posted by sally | January 9, 2013 1:46 PM
The thing that irks me the most as a small employer is that it's my obligation to deal with all of the withholding taxes, etc. Truly, I avoid hiring people because I hate dealing with all of the red-tape and extra costs above their base wages. I hire people to do the taxes for me, but I really don't know if they are doing it correctly.
Posted by Usual Kevin | January 9, 2013 2:40 PM
Everyone wants a simpler code but are they willing to give up their tax break to get it? One mans loophole is another mans cherished deduction. And payroll is a nightmare of compliance and contingent liabilities. No wonder people hesitate to take on employees.
Posted by GEORGE | January 9, 2013 3:04 PM
And a follow-on to Usual Kevin and George's comments...
Its such a nightmare that you almost HAVE to outsource it to Paychexx or ADP, which adds its own level of costs...
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Posted by It's Mike | January 9, 2013 3:21 PM
Everyone wants a simpler code but are they willing to give up their tax break to get it?
Well, yes.
I'd think that the number of those with
"tax break(s)" is far outweighed by those without.
Posted by cc | January 9, 2013 4:15 PM
"Tax expenditures" is tax lawyer jargon for what's left over after your pay your taxes.
Something that is sure to get smaller.
Posted by John D | January 9, 2013 10:18 PM
cc, if you include the mortgage interest deduction, tuition deduction/credits, student loan interest eduction, the EITC*, and various child tax credits, almost EVERY taxpayer has tax breaks, most of them bigger than the loopholes many companies get.
*To be fair, this is actually a welfare program that happens to be administered by the IRS
Posted by Zach | January 10, 2013 11:15 AM
Yes, Zach, almost "every" taxpayer has breaks, but the vast majority of taxpayers file the short form and the benefits of the sacred home mortgage deduction go primarily to households in the top 10-15%.
There's little question that the tax code is intentionally incomprehensible nor that the majority of its provisions benefit the more well-off.
I would favor a progressive flat tax with no deductions and lower rates. Roughly half of all income the the U.S. is not subject to taxation. Broadening the tax base, eliminating all deductions, keeping it progressive, and lowering the rates is what I would do if I were king... :)
Posted by Mike Austin | January 10, 2013 12:43 PM