Politics - Tax Day is gone

The deadline for filing individual taxes with the Federal Government has passed. Yesterday across the country people joined together in their cities to protest excessive government spending. It was the Taxation Tea Party or something like that. The protest is admirable; it's just too bad that in order to motivate people there has to be some corny theme. The Boston Tea Party protest and this protest were not too similar. That aside, perhaps it is time to seriously reconsider our tax structure.

I'll leave the issue of how heavy of a burden the rich should be made to carry alone for a day. Let's look at the complicated IRS code and its results. I have plenty of experience in this area during my years as a public accountant. I performed mostly audits, but I did do some tax work as well. The IRS code almost demands the use of a CPA for a normal person with anything much more than a W-2 to feel confident about filing his taxes. The biggest argument for ditching the whole system is the incredible amount of lost productivity due to the IRS code. Imagine if there were no itemized deductions, no obscure credits, no alternative minimum tax. Imagine a code where interest and dividends and capital gains were not taxed. Imagine a tax code where income was simply taxed at a rate without adjustments. That rate could increase as a person made more income, but still the average person would be able to handle his own taxes in quick order. The immediate result would be to put a lot of accountants, such as myself, out of a job. However, over the long term this would likely be a great thing for the productivity of our country. For all the millions of hours spent by CPA's preparing tax returns and IRS auditors reviewing them, nothing of merit has been produced. The only thing that has happened is that a federal law has been satisfied. It is work that does not create anything, no product, no entertainment, nothing. A financial audit of a company, by contrast, does have merit. Banks and investors find an audit very useful in determining how to conduct business with an institution. A tax return? It's not necessary, not productive. The displaced accountants would presumably find work in another field and add to the productivity of our society instead of simply fulfilling a government mandate.

Many areas of government have waste, not just in spending, but in man hours. This is one instance where the government creates wasted man hours not only by government employees but also in the private sector as citizens seek help to comply with the law. It would be a drastic change, but if you were starting from scratch, would you want the simple system, or the incredibly complex one that we have now whereby a citizen must rely on another person to follow the law?