Do you believe that our current tax code system is too complicated and needs to be modified or restructured? Is it possible to make radical changes or would it be too difficult to change?
2007-07-30 05:50:04 · 6 answers · asked by pisces02 4 in Business & Finance ➔ Taxes ➔ United States
I am an accountant and CPA candidate but I don't focus solely on taxes.
I assume you are talking about personal income taxes and not corporate income taxes since that is what most people are talking about recently.
About 1/4 of the total federal gov't tax revenue comes from personal taxes and the rest comes from corporate taxes. So, there is a larger lobbying effort regarding corporate taxes and the corporate tax rules get a little more scrutiny by the gov't because they have a bigger impact on tax revenue than personal income taxes. It is possible to make minor changes to the tax code but I doubt that any huge change like a flat tax or a national sales tax will come without some sort groundbreaking incident that causes everyone to rethink the tax code.
In my opinion about 20% of the tax code is probably overcomplicated in the sense that some of the rules don't really affect the financial decisions people make or have any impact on the final tax expense but do require compliance or reporting.
The AMT (Alternative Minimum Tax) which started in the 1950's and basically creates a parallel tax code to the regular tax code should definitely be highly modified or eliminated completely. I was intended to "catch" people who have a lot of income but who may not pay much taxes under the regular tax code. However, the income thresholds have not been updated approriately so now many middle class families and even well paid blue-collar families could be subject to it.
The idea that "since it can't be described in a sound bite means it it too complicated" is bogus. Most of the "complication" arises from deductions which will in fact help people reduce their tax expense. There is no penalty for overpaying on your taxes and if you think it is too complicated you can always just report your income (which is stated right on your w-2 from your employer) without any deductions using the 1040-EZ form. If it takes any normal person than about 30 minutes to do this form then they are stupid.
The way the form is set up is probably the most confusing part which throws people off. The 1040 personal tax form has a bunch of potential schedules. If they just rearranged and rewrote the form without actually changing the laws it would eliminate a ton of the confusion.
2007-07-30 06:18:20 · answer #1 · answered by Matt M 5 · 0⤊ 0⤋
I do not believe that the tax code is too complicated. As with everything in life, people look at things differently. Some people find operating electronic devices complicated, some people can't operate a remote control, I personally found Quantitative Methods of Business complicated. However, as with the electronic device, the remote control, and QMB, there are Owners manuals and Textbooks available for us to iron out the wrinkles.
It just boils down to how much you want to know, and how much you are willing to learn. The IRC is decipherable.
2007-08-04 14:15:32 · answer #2 · answered by Time will Tell 1 · 0⤊ 0⤋
Yes, it is complicated. To make possible changes, somebody is going to lose a deduction of some type and the lobbyists will be out in full force. The reason the tax code is so complicated is because Congress keeps adding special deductions for a limited amount of people.
2007-08-02 22:24:23 · answer #3 · answered by Dadnach 3 · 0⤊ 0⤋
The CPA's never believe the tax code is too complicated because they get paid to decipher it!
Personal income tax is obscenely complicated because of political posturing by both parties. For example, I know of three different credits or deductions for postsecondary education, and maybe I'm forgetting a fourth. All have different rules for eligibility, and if you misapply any of the rules you will get fined by the IRS. If Congress was serving the public instead of posturing they could figure out how to get by with one set of rules. But everyone wants to claim they "gave" us a tax break, so we get three breaks and then have to buy software or hire experts to sort out how to legally get the best one. Anyone who would defend this sort of complication is very likely to have a personal or financial stake in protecting the status quo.
2007-07-30 08:36:35 · answer #4 · answered by Houyhnhnm 6 · 0⤊ 0⤋
what is the meaning of tax code u
2016-03-18 08:38:20 · answer #5 · answered by Ismael 1 · 0⤊ 0⤋
No, it is not too difficult for the average tax payer.
2007-07-30 07:05:43 · answer #6 · answered by Wayne Z 7 · 0⤊ 0⤋