Full blown 1040A

It ain’t rocket science to do your own taxes. A little complicated if you expect to do it without educating yourself first. But that’s true about almost anything. I like to pretend I’m on a treasure hunt when I do my taxes. Looking for all those gold nuggets. Makes it a little more fun.

Hmm, hiraethin, when is a food ingredient not a food for GST purposes? That came across my desk this week in relation to one particular product that we sell in Aus. Oh, it is used in making beer, and is an additive to white bread. One is taxable, one is GST-free. All good fun really!!

I look at the US tax system and think “there but for the grace of god go I…” Living as I do in Australia I feel I’m lucky - we pay one set of taxes, to the federal government (which seized state tax revenues to pay for WW2 and never gave them back, heh). Our income tax return form is large and complex, but not too complex for a high school grad to complete, and anyone without investments, tax write-offs etc. is wasting money if they use an accountant. (60% of American tax payers use an accountant to do their taxes? Wow, that really is an industry). Finally, we have an on-line tax facility now for the net-savvy - complete with online help, much more user-friendly than the paper form, provides immediate lodgement and rebate (if appropriate) paid in 14 days.

In NZ, tax from my earnings is deducted at source - salary, interest, dividends…

If I wish, if I believe that I am due a refund for some reason, I can file a formal return.

Similarly, if the IRD think I am not playing the game right (like if I owned investment properties and did not pay the tax on them) then they can work out what they think my tax is and charge me.

In my wife’s case, it pays for her to lodge a return because she works 8 months of 12, but the tax is deducted on the assumption of 12 months of 12 employment.

The tax return itself?

37 panels on 8 pages. My wife uses 12 of those 37 panels. The instruction booklet - 50 pages of examples and notes.

THAT is simple tax…

Now doing Company tax - that is for the professionals :-D

This will make you sick. I promise. (hat tip TMV)

The numbers regarding the rich investors, though, are probably pretty accurate.

Alan has put it out there with clarity regarding the social program cuts at the expense of the working class. It doesn’t take a sighted person to understand that Bush has a particular hard on for the little guy when he enriches the rich and wants to take your measly $240 death benefit.

On the other hand, he was voted in a second time by somebody … and the super rich are not a majority.

I am sure that there are metrics available that accurately show the time/ cost factor for the average employee to complete the tax forms. That is where the centrist movement should be focused in terms of information publication. The 527 Orgs and the Party folks are going to make information as confusing as possible. We should be shooting for clarity in all things. Good job, ASC. You made people talk and think rather than debate a position. Maybe we are going somewhere after all.

That said, simplified tax system? Sure. Flat? No. We need a simplified progressive tax. Either way, you still have to do all the work to figure out what the income is. That’s where all the work goes. It’s not into looking up the dollar figure in the table at the end.

Interesting point about the numbers. If I have a chance, I’ll check Bevan’s source and see how they calculated it–my raw guess is that it includes money spent by businesses paying taxes. But that’s just a guess.

Besides, it’s an artificial industry that doesn’t exist to serve a need created by the free market but instead a need created by government ineffeciancy and, frankly, rank stupidity. It’s a drain on our economy simply because it is unnecessary. If it’s not a bad thing, why not make the tax code even more complicated and try to boost the perctage of Americans hiring tax preparers from 60% to 80%?

Americans spend more than a quarter-trillion dollars on tax preparation? In 2004, the last year the IRS had numbers available, there were 131.3 million individual returns filed. So, the average taxpayer paid slightly over $2000 to have their taxes done, and that includes everyone who did their own and didn’t itemize?

If you discount the 40% that did their own, then the cost to the average filer was more than $3300 dollars, whether or not they itemized.

I found a CNN article from 2002 that said that the nationwide average for preparation of itemized returns was $208. I don’t think that the cost of doing business has risen that much. (I have no personal experience with paid preparers, as I’m a single dependentless renter who can do basic math).

…none of what you’re saying convinces me that this is an actual drain on our economy.

What it is is an industry. Don’t we want to have industries?