Tuesday, April 18, 2017

Tax Day, 2017

This was one of the best tax filing days within memory---all returns mailed by noon, estimates paid, and nothing on extension (OK, there were some delayed information filings that I could have pushed to complete today but didn't.)

Our financial profile is simpler. We've been pruning our accounts and investments, especially those that are easy to consolidate, like CD's and bonds that have not been renewed. But the administrative burden is only a little lower than 2004. Taxes are still way too complex. Nina Olson, the National Taxpayer Advocate agrees.
If I had to distill everything I’ve learned into one sentence, it would be this: The root of all evil is the complexity of the tax code...

there are 151 million individual taxpayers, including 27 million who report sole-proprietor or farm business income with their individual returns. There are also nearly nine million pass-through entities (S corporations and partnerships), the income from which is reported on individual income-tax returns. These taxpayers desperately need relief from the extraordinary compliance burdens the tax code imposes.
Ms. Olson has a number of suggestions (e.g., why have twelve different incentives to encourage education savings?), any of which would ease our burden, but I'm not hopeful. As I've written before:
We have a complicated tax profile that is way out of proportion to our income bracket. If any of the political candidates had a credible program to simplify the tax code, I would support that candidate in a heartbeat even if it meant that my bill would be, say, 10% higher.
That was nine years ago.

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