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Complication in taxes is a pet peeve of mine. It's incredible how much money it wastes. There is an entire industry dedicated to figuring out what you owe in ta

Complication in taxes is a pet peeve of mine. It's incredible how much money it wastes. There is an entire industry dedicated to figuring out what you owe in taxes. Everyone working in that industry is fixing broken windows that get broken again every year. What a waste of productivity. If I were King of America, I would mandate that the entire tax code fit on a single typewritten page with specified font and margin. Each year, a group of 3rd-graders would be asked to complete the tax form given all the necessary information. If they couldn't, the tax code would be considered invalid.

bsimpson 14y ago
billybob for King!
kooshball 14y ago
>There is an entire industry dedicated to figuring out what you owe in taxes. Everyone working in that industry is fixing broken windows that get broken again every year. What a waste of productivity. Its actually worse than that. Those in the tax prep industry actually lobby against major tax reforms. http://www.nytimes.com/2010/01/24/business/24digi.html http://www.nytimes.com/2010/01/24/business/24digi.html Its similar to where the AV companies complain when Microsoft release the free version of their own AV software. Ultimately its about protecting your own profits and not about the users.
icegreentea 14y ago
You know that Herman Cain was widely ridiculed for exactly this line of thought? The tax code is certainly too complicated, but why should it be simple? It should be complicated to reflect the complications and nuances of our societies. Enough of us obviously think that there should be special cases for certain situations that special cases will arise. And democracy will see to that. Which I guess is why you'd have to be King to make it stick. But even then And why set the threshold to 3rd graders? They aren't the ones filling out taxes. Maybe high school seniors would be a more nonsensical threshold.
- mikeash 14y ago
  I thought Cain was ridiculed largely because his tax plan a) would substantially shift the burden of taxation to the poor and b) sounded like something that came out of SimCity. The idea of a simplified tax code in itself doesn't get ridiculed, only ridiculous ideas for how.
  - TomatoTomato 14y ago
    The FairTax actually does the opposite. It taxes the wealthy at just under 23% without deductions and the poor at zero or negative. http://i.imgur.com/hAJ8G.jpg http://i.imgur.com/hAJ8G.jpg shows the tax rates based for a married couple based on the number of children. All rates approach 23% as income/consumption rises. It also taxes income/spending earned from dividends and interest the same as if they were earned from an employer which is how people like Warren Buffet pay less % of tax than I do. Herman Cain's failure was not adding the prebate into his 999 plan (which was just a stepping stone to the FairTax). Without the prebate, yes much of the tax regression is gone, and the poor end up paying nearly the same rate as the rich until the FairTax is fully implemented. With that adjustment, it could make sense.
    - scarmig 14y ago
      It doesn't tax the wealthy at just under 23%. It taxes consumption at 23% and offers a rebate. Wealthy individuals would end up being taxed substantially less than people whose income is labor based, unless they spend every cent of their incomes every year.
      - deleted 14y ago
        [deleted]
      - TomatoTomato 14y ago
        Please give me an example. As above, focusing on the $ spent, it is a more regressive tax system than today. Our current system encourages the wealthy to put their money in tax shelters and use interest and dividends to consume getting about a 20% tax savings. Good luck earning 20% in the market year after year. Low earners do not have this luxury and tend to pay higher rates rel. to true wages. With the FairTax, if you are using ($tax spent / $wage earned). Then yes, this could be low for a high earner. Ex. a 200k earner saving 75% of their income would be paying an effective tax rate of 12% of consumption or 3% of wages vs 20% if they spent everything. Seems like a nice incentive to invest doesn't it? But eventually all savings get spent. If it's spent by their kids as an inheritance, then they will pay a higher effective rate of consumption than to their labor wage reversing the difference. Now if it's spent by the couple in retirement, the tax to wage calculation makes absolutely no sense because it is INFINITE % taxes to (zero) wages. Whereas focusing on consumption would be 10% tax rate if they keep the same lifestyle under the FairTax. See why focusing on the percent of consumption is important? Either way, the earned dollar will eventually be taxed. One caveat... There is a disincentive to consume primary goods or first run items and buy used. This IMO is a good thing frankly as our natural resources continue to decline with no end in sight. For the wealthy, marginal increases are low but effective tax is high. So there is a much greater incentive to consume than to save for high earners than they have today (increasing market velocity) and a greater incentive to save for low earners. This will also shift investment power from richest of the rich to be more democratic as more small investors enter the market.

bsimpson 14y ago

billybob for King!

kooshball 14y ago

>There is an entire industry dedicated to figuring out what you owe in taxes. Everyone working in that industry is fixing broken windows that get broken again every year. What a waste of productivity. Its actually worse than that. Those in the tax prep industry actually lobby against major tax reforms. http://www.nytimes.com/2010/01/24/business/24digi.html http://www.nytimes.com/2010/01/24/business/24digi.html Its similar to where the AV companies complain when Microsoft release the free version of their own AV software. Ultimately its about protecting your own profits and not about the users.

icegreentea 14y ago

You know that Herman Cain was widely ridiculed for exactly this line of thought? The tax code is certainly too complicated, but why should it be simple? It should be complicated to reflect the complications and nuances of our societies. Enough of us obviously think that there should be special cases for certain situations that special cases will arise. And democracy will see to that. Which I guess is why you'd have to be King to make it stick. But even then And why set the threshold to 3rd graders? They aren't the ones filling out taxes. Maybe high school seniors would be a more nonsensical threshold.

mikeash 14y ago
I thought Cain was ridiculed largely because his tax plan a) would substantially shift the burden of taxation to the poor and b) sounded like something that came out of SimCity. The idea of a simplified tax code in itself doesn't get ridiculed, only ridiculous ideas for how.
- TomatoTomato 14y ago
  The FairTax actually does the opposite. It taxes the wealthy at just under 23% without deductions and the poor at zero or negative. http://i.imgur.com/hAJ8G.jpg http://i.imgur.com/hAJ8G.jpg shows the tax rates based for a married couple based on the number of children. All rates approach 23% as income/consumption rises. It also taxes income/spending earned from dividends and interest the same as if they were earned from an employer which is how people like Warren Buffet pay less % of tax than I do. Herman Cain's failure was not adding the prebate into his 999 plan (which was just a stepping stone to the FairTax). Without the prebate, yes much of the tax regression is gone, and the poor end up paying nearly the same rate as the rich until the FairTax is fully implemented. With that adjustment, it could make sense.
  - scarmig 14y ago
    It doesn't tax the wealthy at just under 23%. It taxes consumption at 23% and offers a rebate. Wealthy individuals would end up being taxed substantially less than people whose income is labor based, unless they spend every cent of their incomes every year.
    - deleted 14y ago
      [deleted]
    - TomatoTomato 14y ago
      Please give me an example. As above, focusing on the $ spent, it is a more regressive tax system than today. Our current system encourages the wealthy to put their money in tax shelters and use interest and dividends to consume getting about a 20% tax savings. Good luck earning 20% in the market year after year. Low earners do not have this luxury and tend to pay higher rates rel. to true wages. With the FairTax, if you are using ($tax spent / $wage earned). Then yes, this could be low for a high earner. Ex. a 200k earner saving 75% of their income would be paying an effective tax rate of 12% of consumption or 3% of wages vs 20% if they spent everything. Seems like a nice incentive to invest doesn't it? But eventually all savings get spent. If it's spent by their kids as an inheritance, then they will pay a higher effective rate of consumption than to their labor wage reversing the difference. Now if it's spent by the couple in retirement, the tax to wage calculation makes absolutely no sense because it is INFINITE % taxes to (zero) wages. Whereas focusing on consumption would be 10% tax rate if they keep the same lifestyle under the FairTax. See why focusing on the percent of consumption is important? Either way, the earned dollar will eventually be taxed. One caveat... There is a disincentive to consume primary goods or first run items and buy used. This IMO is a good thing frankly as our natural resources continue to decline with no end in sight. For the wealthy, marginal increases are low but effective tax is high. So there is a much greater incentive to consume than to save for high earners than they have today (increasing market velocity) and a greater incentive to save for low earners. This will also shift investment power from richest of the rich to be more democratic as more small investors enter the market.