April 15, 2005

Taxes, done at last.

I can't believe how much time I spent doing taxes this year. What a nightmare! Here's an article saying that Americans spend 6.5 billion hours every year filling out tax forms. What a waste! Even if some simpler system would not be perfect, there is so much time that could be used on more productive, creative activities. How much better off we would be with a simpler system! And isn't it ordinary workers who are least able to take advantage of all the crazy little details that have made the system so complex? Let's change this fiendish system!

11 comments:

Gerry said...

Ann--

Federal Taxes stink. But I have to say, Pennsylvania taxes are a snap. Take the gross income right off the W-2, multiply by 3.07%, compare to your withholding, pay the difference if you didn't withhold enough, ask for a refund if you withheld too much.

lindsey said...

Apparently, the Democrats are kibbitzing over the AMT (a tax they don't like because it actually takes a real bite?) so perhaps we will see some meaningful reform. I just want the system simplified.

Pancho said...

I spent approximately 2 minutes doing my taxes today. I called my accountant and uttered one word..."Extension".

Wouldn't things be easier if we had a flat tax of, say, 10% for all taxpaying entities. No exceptions. I have no hard data but I postulate that this would also take in more income for the government than the present system.

Ann Althouse said...

Pancho, why do we need to have a completely flat tax? Eliminate all the deductions and all the special categories of income, but keep the progressive levels of taxation -- just make them comparatively low to make up for eliminating all the other things. I don't think someone making $10,000 a year should pay $1,000 in federal taxes, while someone making $200,000 a year only pays $20,000. That would be crazy.

Tax Answer said...

Why would it be crazy that somebody making $10,000 pays $1,000 in tax and somebody making $200,000 pays $20,000 in tax? As I see it the higher earning person is making 20 times the amount of the lower earning person and therefore is paying 20 times the amount of taxes. I don't see an injustice there at all.

What amount do you think the person making $200,000 should pay in taxes? $50,000? That would be insane, 50 times the amount in taxes.

Rick Lee said...

I spent 4 or 5 hours doing my taxes and I don't even do my own taxes! I'm just gathering the information to send to the accountant whom I pay approximately 400 dollars. That's time and real money that could be put to better use.

Ann Althouse said...

Wow, Tax Answer! It's not a math problem. A person making $10,000 is desperately poor and currently probably pays no tax at all. You'd take $1,000 from him! You need to make more of an effort to picture real life.

Dean said...

Eliminating lines and attached schedules for the Federal Tax form would help.

For a flat tax, I would suggest a level below which no one would owe taxes, say the poverty level? If you made below that, no tax. There could also be a "progressive" percentage (as now but lower, of course). Just simplify the forms, please!

Abraham said...

Abolish the 16th Amendment! National Consumpption Tax, it's the fairest and most efficient way. Prebates make it progressive.

Chris Gabel said...

All this discussion about "flat taxes" assumes people's income is as straightforward as a W-2. But a huge portion of us are self-employed. Measuring income from a business is inherently complex. Do we really want to tax DINKSs the same as a young couple with college loans and 3 young children? There are a lot of unnecessary rules. but also a lot of legitimate reasons for complexity.

Dean said...

So, then, does fairness mean complexity? Must we have all these lines and schedules in order to keep things fair?

Most likely in any flat tax proposal, deductions for marriage and children would remain. I would imagine some deductions for business expenses would have to be included also. Others might think of more deductions that need to remain.

After a few years would we once again wind up with a hodge podge of lines and schedules?