Monday, April 12, 2010

Red Flag Warning: It is time for Easy Flat Tax

Greetings...The Watchman has finished preparing two tax returns. One for my family and one for my mother. Let me say right off, government does require funds to operate the necessary functions of national defense, public safety, and operation of its various administrative aspects. So this isn't a anti-tax rant. However the methodology by which taxes are computed and then collected is indeed worthy of a good rant, one that I wish our leaders would hear.

I'm just your average citizen. One income source with a few nearly worthless IRA investments, and own a home. Nothing fancy in my fiscal life comparable to say, some rich dude like Warren Buffet or Al Gore. So why does it take over 8 hours just to do one tax submission? Every year when I am done with the agony of answering inane and complex tax questions I take the final numbers and run a little test using simple math and a 3" by 5" index card. Here is what I do:
Line 1 - Gross Income from all sources: $65,000
Line 2 - Tax Rate: x 0.1 (10%)
Line 3 - $6,500.00 (Product of multiplying Line 1 by Line 2)
Line 4 - Federal Withholding: $ 7,652.54
Line 5 - Additional Tax Due(+) or Refund (-): Line 3 - Line 4 = -$1,152.54
Line 6 - Congratulations you are done! Go to: to submit.

Usually my test is very close to the final numbers that spew out from Turbo Tax software that I paid $75 for and spent 8 hours of life working through out of fear I would hose up the filing and have the IRS sending bloodhounds looking for me. Look at how simple the effort turned out. Hard to cheat when the criteria is this straight forward and requires nothing more than a 4 function calculator.

When you look at the tax rules it is obvious the code is set up to encourage or discourage some set of predetermined social aspect. Home mortgage interest deduction is there because the lumber industry, home builders, bankers, and real estate brokers want to 'encourage' home purchases. On the other hand, all the rules about savings and investment really is a way to discourage 'excessive' unearned (meaning you didn't sweat over a blast furnace to get paid) income. Then there are a whole bunch of credits so those who don't make enough money to pay taxes, actually get a tax refund! Gosh how wonderful! From those who have to those who have not.

So the watchman says its time to enact the Easy Flat Tax if we must have an income confiscation system. At least we won't be wasting precious life minutes to pay up. Write to your new congressman on November 3rd to tell them their employers demands the Easy Flat Tax. Let me know what you think. How would you like to have your taxes done in 10 minutes tops?

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