What is the likeliness of a major overhaul in the U.S. income tax sys. & what type of sys would it go to?

Question

I'm a biz major and i really want to be an accountant but not if the job mkt would shrink drastically if we instituted a system such as the fair tax that would eliminate income taxes. And by the way the fair tax plan is the best alternative I have seen so far. However, I believe if there was a change in the U.S. tax sys., it would just become more complex and require MORE accountants.

Answer 1

The accounting career is a safe bet for the foreseeable future. "Accountant" still shows up on most top 10 career lists.

The chances of a major tax overhaul (fairtax or flattax) in the near future are slim and none.....and slim left the building.

One accountant on a message board said it best: "Every time congress 'simplifies' the tax code, my business goes up 20%".

Good luck in the future.

Answer 2

One you cant really go wrong with accounting you can do just about anything. And there is even alot to do in public accounting outside of tax. But to be honest I have not found one person in the tax profession or politician who thinks that it will change anytime soon the last major overhaul we had was in 1986 and that was the first one in at least 40 years. Plus that did not change it to a sales tax either. As long as it can hold out for about 30 more years we should be fine. And I am not sure what he considers megabucks but the Partners at my accounting firm average 750,000 a year and is expected to be a Million a year by 2010 so it my not be mega but were still making more than doctors or at least as much. Try to work for a BIG 4 for at least a couple of years and I dont know what school you go to but start getting involved in recuiting early.

Answer 3

The likelihood of a major tax overhaul that would replace the income tax is virtually zero. For all their faults, Congress realize that the Flat Tax and the Fair Tax are not what they are touted to be.

The so-called Flat Tax is a ploy by the wealthy to transfer their tax burden to the shoulders of the middle class and working poor. Why do you think that folks like Steve Forbes like it so much?

For a flat tax to raise the revenue that the current graduated income tax raises would require a rate of around 25% - 27%. The wealthy pay a marginal rate of 35% so they'd see a nice fat tax cut. Steve Forbes, Bill Gates, and Warren Buffett would pocket MILLION$ on a flat tax.

Most middle-class working stiffs -- folks like you and me -- pay a total tax rate of between 10% and 20% of our total income. Pull out your tax return and compare the Total Tax line to the Total Income line -- and don't forget to add back any 401(k) contributions and your pre-tax medical insurance deductions -- and see what your total effective tax rate is. If you're like most folks, it will be a LOT less than 25%

Now, what would it do to the working poor? Let's have a look. Take a single parent supporting 2 kids on around $16k a year. They don't pay any tax at all and get about $4k in EITC payments. That makes for a little under $18.8k a year when SS and Medicare taxes are considered. They survive, but just barely. With a flat tax, the EITC would disappear and the tax bite would rocket to over $5,500 for them, including SS and Medicare. Take home pay would drop from from $18,800 to about $10,450. They'd be tossed into the streets by the millions. All so Steve, Bill, and Warren can have even more money than they could ever reasonably need.

The Flat Tax and the so-called "Fair Tax" -- a hugely expensive national sales tax -- both violate the first rule of taxation: Make sure that the taxpayer can afford to pay the tax. Our current graduated income tax does just that -- everyone pays their fair share and the poorest get an assist from those of us who are better off.

The impact of the "Fair Tax" on the working poor would be just as devastating as the Flat Tax since nearly every penny they earn goes to pay for essentials. The wealthy spend a far smaller portion of their total income and would get a major tax break.

Worse yet, the "Fair Tax" would require just as much work by the IRS to ensure that all sales were properly taxed and that the funds were rendered. Black marketing of untaxed goods would go through the roof. Look what is happening with tobacco and liquor in high-tax states right now. And we all know the type of element that black marketing attracts -- organized crime and gangs. Wouldn't THAT be nice, getting a TV or your Captain Crunch from the local gang-banger. No thanks!

Answer 4

Most governments now use a dual system of taxation for individuals, which include income tax and a sales tax (VAT, GST). Many governments considered exclusivelly using a sales tax, but generally use both types of taxes together.

Company tax often goes through repeated periods of simplification, but ends up with more bloat. In addition, accountants and tax lawyers develop many different ways to reduce tax burden (and increase the value of the business, benefitting the economy...we hope)

Accounting is a difficult job and in the world today there are not enough qualified accountants. Accountants find it easy to work in many different countries, because they are in high demand.

If you are worried about job prospects, consider various double majors and double degrees. Accounting and Finance are a good combination, because (in a simplistic way) accountants focus on the past mony and finance focuses on the future money. Accountants often handle finance as well.

Accounting and management or business planning are good combinations. Managers with good knowledge of accounting are in demand and accountants with MBAs can earn fairly good money.

Accounting is a good job, but it is not for everyone. Many accountants leave accounting to pursue other careers and the possible salaries are good, but accountants rarely earn megabucks.

Answer 5

Don't worry. You'll probably finish your lifetime career before we see any change in the tax system. Then you can retire and not worry about this anymore. But, there won't be any Social Security coming your way so save your money.
I don't know which system would work best for this country.
Perhaps the best system could be to keep all of our tax money in this country!!!

Answer 6

GREAT QUEST; ONE DAY WE WILL GO TO A FAIR TAX SYSTEM. THERE ARE SOME TAXES THAT WILL REMAIN THE SAME. OTHERS WILL BE REMOVED. THE WAGES EARNER FOR HOURLY WAGES IS ONE THAT WILL BE HISTORY. THE 16th AMENDMENT DID NOT CHANGE THE POWERS OF CONGRESS. AS THE FOUNDING FATHERS WROTE, WITH GREAT CARE, AS NOT TO TAX IT'S PEOPLE A DIRECT TAX. OVER THE YEARS CONGRESS HAS ENJOYED THE MONEY. AS MORE PEOPLE ,HAVE STUDIED TAXES, THEY ARE UNDERSTANDING THE THE UNFAIRNESS OF THE PRESENT IRS SYSTEM. . SO THIS IS THE ROUTE WE WILL TAKE IN ABOUT 5 YEARS. SO THERE IS YOUR TIME TABLE . MY MOM AND DAD WERE BOTH ACCOUNTANTS. GOOD LUCK...DON

Answer 7

The likeliness of a major overhaul is slim to none and I think slim just left town.