{"id":1742,"date":"2015-04-15T21:45:03","date_gmt":"2015-04-16T03:45:03","guid":{"rendered":"http:\/\/admin.patheos.com\/blogs\/janetheactuary\/?p=1742"},"modified":"2015-04-16T07:16:53","modified_gmt":"2015-04-16T13:16:53","slug":"taxes-on-a-postcard-uh-no-thank-you","status":"publish","type":"post","link":"https:\/\/www.patheos.com\/blogs\/janetheactuary\/2015\/04\/taxes-on-a-postcard-uh-no-thank-you.html","title":{"rendered":"Taxes on a postcard? Uh, no, thank you."},"content":{"rendered":"\n<\/head>

That\u2019s Ted Cruz\u2019s proposal:<\/p>\n

Imagine a simple flat tax that lets every American fill out his or her taxes on a postcard.<\/p><\/blockquote>\n

and, as reported at cbsnews.com<\/a>, it\u2019s tied to his vision of a flat tax.<\/p>\n

Now, I\u2019d earlier said<\/a> that a flat tax is not a particularly worthy goal. \u00a0Even in the days of tax tables rather than tax software, it wasn\u2019t a big deal to look up your income range on a table to see what the tax was \u2014 and, as I recall, once you exceeded a certain level of income, you were then given the instruction to apply the relevant marginal percent to your total income less the income in the last row of the table. \u00a0And there is a good reason for graduated tax rates \u2014 the greater ability of the wealthy to shoulder a disproportionate part of the tax burden is real, and appeals to simplicity aren\u2019t sufficient to counter this, especially since, in order to minimize the burden on the poor, flat tax proponents need to offer credits and other benefits for low-income taxpayers anyway.<\/p>\n

Of course, I\u2019m all for simplifying taxes by reducing the sorts of deductions one can take, but not because it simplifies taxes; instead, I support reducing deductions where those deductions distort the economy (e.g., the home mortgage deduction artificially raising the cost of housing) or are simply unfair by picking winners and losers. \u00a0But the Schedule A is not especially complicated. \u00a0It\u2019s not that hard to calculate the interest paid on your mortgage, or the \u00a0property taxes you paid. \u00a0Yes, it\u2019s more work to add up your charitable deductions (and provides too much opportunity for unethical exaggerations of the value of in-kind donations), or your medical expenses (if you have enough medical expenses for this to apply), but each of these takes up a single line on the Schedule A itself <\/a>(well, fine, each takes up four lines \u2014 for the medical expense, to calculate the 10% of income threshold, and for charitable contributions, to add together cash, in-kind, and carryover donations), which is only one page in total.<\/p>\n

So what is it that makes taxes so hideously complicated? \u00a0For us, at least, it\u2019s when you need to calculate all the non-wage income you\u2019ve had during the year \u2014 interest, dividends, capital gains, rental income, self-employment income, even farm income (that\u2019s Mom and Dad, whose taxes my husband is now handling, and Dad\u2019s inheritance from his mother and her parents before her). \u00a0Last year, Dad had a particularly nasty capital gains calculation when a company he owned stock in decamped to London. \u00a0But unless you plan to treat capital gains and other investment related income as wholly non-taxable (which I\u2019ve said is foolishness<\/a>\u00a0in the context of my criticisms of the Rubio proposal), then it is simply necessary to calculate and report this income. \u00a0True, this could be simpler, if, for instance, there were not separate tax rates for short- and long-term gains. \u00a0And the additional Medicare tax adds another level of complexity for people who are impacted.<\/p>\n

Sure, I suppose you could \u201cfile taxes on a postcard\u201d in a somewhat trivial sense, by calculating your income from these sources on separate worksheets that are just retained in case of audit, but not \u201cshowing your work\u201d to the IRS. \u00a0In that sense, this would match the approach to charitable donations, where you don\u2019t list each donation on an IRS schedule, but just provide the total. \u00a0But whether you report the individual components or only the total to the IRS, the real work is in the calculation, not the writing of a final result on a tax form.<\/p>\n

What else adds to the complexity? \u00a0Taxes are fiendishly complex if you live abroad, of course. \u00a0But no one\u2019s going to bat for them. \u00a0(Maybe there should be a congressional district composed solely of citizens residing outside the country\u2019s borders.) \u00a0I\u2019m told that the additional math for the health insurance penalty is also a mess, as well.<\/p>\n

And there are a host of other credits and special treatments. \u00a0Did you know that<\/p>\n

Taxpayers who make cash contributions on or before April 15 to charities providing relief for the families of two slain New York City police officers can receive an immediate tax benefit by choosing to claim a charitable contribution deduction on their 2014 federal income tax returns, according to the Internal Revenue Service.<\/p><\/blockquote>\n

which I stumbled upon<\/a> while pulling up the link for the Schedule A?<\/p>\n

Now, some of these special credits\/deductions\/tax treatments are reasonable and appropriate, and others are not. \u00a0But what makes them appropriate or inappropriate is not whether it impedes the goal of taxes-on-a-postcard, but whether they are just or unjust, and whether they distort the market or not.<\/p>\n<\/body><\/html>\n","protected":false},"excerpt":{"rendered":"

That\u2019s Ted Cruz\u2019s proposal: Imagine a simple flat tax that lets every American fill out his or her taxes on a postcard. and, as reported at cbsnews.com, it\u2019s tied to his vision of a flat tax. Now, I\u2019d earlier said that a flat tax is not a particularly worthy goal. \u00a0Even in the days of […]<\/p>\n","protected":false},"author":2209,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-1742","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"yoast_head":"\nTaxes on a postcard? 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