Sunday, March 24, 2013

Argh, taxes

I did (most of) mine over my spring break. (Most of, because I'm still waiting on some paperwork having to do with investments. It's complicated. Way TOO complicated).

Two thoughts:

1. It's really disheartening to hear things (like about VP Biden's Paris trip) where huge amounts of (presumably) taxpayer dollars are spent on things that do not benefit the American public. ESPECIALLY when I am having to redo my budget for this spring to account for a bigger tax bite.

2. I think it's time to move Income Tax Day to the week before Federal elections (i.e., move it to the very end of October). Perhaps people would think a bit more about their vote if they had just done their taxes? Or am I being too optimistic there?

I know it will never happen (no political will to do it, especially since it would involve repealing a constitutional amendment), but I remain convinced that replacing the income tax - with its reams of paperwork (if you are someone trying to make money for retirement by investing) and its increasing percentage of bite as a person's wages go up - with a consumption tax would be fairer and easier for everyone. I resent giving up a day of my spring break every year to do battle with a tax code that seems to get more arcane and difficult with every alleged "paperwork reduction act."

I suppose we'll see a type of VAT tax in my lifetime. Not instead of an income tax (which I would favor) but on top of it (which I most definitely do not favor).

Why I would like a consumption-only tax:

1. No damn forms to fill out every spring. No fifteen-page "instructions" in the best legalese to fill out a two-page form. As much as ANYTHING this seems to recommend the system to me.

2. People who work on a cash-only basis (including people like, oh, I don't know, drug dealers) still get taxed when they buy stuff.

3. Savings is not penalized; in fact, people who save and invest are rewarded with lower taxes. The penalty is on people who spend lavishly.

4. Surely, there is some way that low-income people could be given a rebate or some such to avoid concerns about poor families suffering. Or essential items like food could be exempted, but 'luxury' items (like meals in restaurants) taxed.

5. Less of an incentive for people to blow their money on bling or crap. I admit, as frugal as I am, there are even times I look at the rate of inflation and the rate of interest or of dividends that I earn, and I think, "Damn, I should just go buy a crapton of shoes instead of letting my money dwindle down in savings."

6. And okay, I get that  maybe a barter economy or an underground economy might spring up. Is that such a bad thing? Where I have extra zucchini so I trade them to you for your extra tomatoes?

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