Death and Taxes

Yes, the only two certainties in life are these for Americans. Of course if you're in the marjority in sub-Saharan Africa, your two certainties would be death and poverty, so I'll consider myself fortunate.

For most U.S. citizens, October 16, 2006, was just another pretty fall day... or a chilly, rainy one if you live in metro Atlanta. For procrastinators like me, though, it held special significance because it is today that 2005 taxes are due.

As someone with an accounting degree, I feel a compulsion to be actively involved in this annual rite. In total, I probably spent ~ 30 hours working on taxes. This year was good--I guessed correctly back in April when I didn't submit a check to the IRS along with my extension. So I'll get some pocket change back within the next 6-8 weeks after they go through my 40+ page return (things get complicated when you own a business).

I have a young, impressionable friend from my former North Point community group who is crazy for Neal Boortz's Fair Tax idea. He probably would have been equally excited about Steve Forbes' Flat Tax plan had he been old enough to vote back in 1996 & again in 2000 when Forbes had this as the basis for his platform in his failed attempts to capture the Republican nomination for President. Here was my response to my friend's request to "run out, buy the book (Boortz's Fair Tax), and get on board":

As long as they're not oppressive, people don't really give a shit about making tax simple or fair. They're more interested in good schools, clean air, cheap gas, homeland security, and who Paris Hilton slept with last night. But that's not the main reason I think it's a pipe dream. The reality is that tens of thousands of individuals have a vested interest in keeping our tax structure incomprehensible: accountants, auditors, tax preparers, attorneys, software developers, and a huge branch of the government--the IRS, just to name a few.

I give unto Caesar what is Caesar's, but not a penny more. Not including FICA or Medicare, last year I paid 8% of gross income in federal income tax. I fall into the 28% tax bracket. Why the disparity? Ignorance is expensive, so I got an accounting degree with a concentration in tax. I have a better understanding of tax law than most.

This friend was floored when I told him that the Fair Tax plan will never see the light of day through any legislative action. The problem with ideas like the fair or flat tax is that they're rational. Huh? Yes, the fundamental problem with a simplified "fair" or flat tax plan is that it's rational.

Government isn't about rational. Government is about power, control, and influence.

And with 60% of taxpayers using a professional to prepare their returns, it's only getting more complicated.