Did my taxes over the weekend, which got me thinking about the subject. You know, for all the talk about what a chore taxes are, they aren't that hard for millions of Americans. That's because they either don't pay them or, like me, use the 1040EZ form.
So if we really want to simplify taxes, why not just make everyone use the 1040EZ? It's basically a one page form. Now, granted, that would mean eliminating thousands of tax deductions (tax earmarks?) that now make up part of the code, and lots of people -- especially homeowners -- would kick and scream about it.
So, fine, close all the loopholes and in exchange knock 10% off of everyone's tax bracket. Hey, it's an idea.
Here's another thought: At the end of filing my taxes I discovered that I'm getting around $300 back as a refund. Now, I have a love-hate relationship with refunds. On the one hand it's money, which I like. But on the other hand I see it as false advertising as it distorts the tax bite. Not only do most people not see the taxes that are deducted from their paycheck -- you can't miss something you never had -- but then they get a check from the government every year.
I think another essential part of tax reform is eliminating this. Make people pay their own taxes and evaluate if they're getting their money's worth. I actually have to do this since my Virginia-based employer does not deduct my state income tax because I live in D.C. So at the beginning of every year I have to calculate what my income is going to be for the year (salary plus income earned from investments), figure out what the tax on that amount is, divide it by four, and every three months mail them a check for that amount. Believe me, writing a check every few months in the hundreds dollars is a big-time reality check.
It's a joy I think everyone should experience.
Update: Tax time also reminds me of an anecdote by PJ O'Rourke. In one of his books (I think this one) he says he was hanging out with some libertarians from the Cato Institute and after a few drinks one of them says, "I have just two things to say to Timothy McVeigh: IRS, 3 a.m."
So if we really want to simplify taxes, why not just make everyone use the 1040EZ? It's basically a one page form. Now, granted, that would mean eliminating thousands of tax deductions (tax earmarks?) that now make up part of the code, and lots of people -- especially homeowners -- would kick and scream about it.
So, fine, close all the loopholes and in exchange knock 10% off of everyone's tax bracket. Hey, it's an idea.
Here's another thought: At the end of filing my taxes I discovered that I'm getting around $300 back as a refund. Now, I have a love-hate relationship with refunds. On the one hand it's money, which I like. But on the other hand I see it as false advertising as it distorts the tax bite. Not only do most people not see the taxes that are deducted from their paycheck -- you can't miss something you never had -- but then they get a check from the government every year.
I think another essential part of tax reform is eliminating this. Make people pay their own taxes and evaluate if they're getting their money's worth. I actually have to do this since my Virginia-based employer does not deduct my state income tax because I live in D.C. So at the beginning of every year I have to calculate what my income is going to be for the year (salary plus income earned from investments), figure out what the tax on that amount is, divide it by four, and every three months mail them a check for that amount. Believe me, writing a check every few months in the hundreds dollars is a big-time reality check.
It's a joy I think everyone should experience.
Update: Tax time also reminds me of an anecdote by PJ O'Rourke. In one of his books (I think this one) he says he was hanging out with some libertarians from the Cato Institute and after a few drinks one of them says, "I have just two things to say to Timothy McVeigh: IRS, 3 a.m."
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