The WSJ reports that the yet another cabinet nominee - Kathleen Sebelius (whom I have met by the way) - had to pay additional taxes because she missed them the first time.
I think this means one thing and one thing only: our tax system needs an overhaul.
This is not the first time, or the second time. It seems like every time someone is nominated, they have some tax issue. Keep in mind that these are not foolish people who just don't get it - these are smart, motivated, ambitious and generally wealthy individuals who can afford to get the help they need. But yet they fail. The only explanation is that our tax system is way too freakin complicated and needs to be simplified. How about a flat tax! Or, close all loopholes. Earn a dollar, pay .20 in tax. Don't care where it's from or how you got it. Deductions, rebates, credits... blahblahblah... do away with it! Instead, give people good incentives to do well - pay for education, give incentives to stay healthy.... Get a 3.5 in high school and you're in the 90th percentile of SAT/ACT? Guess what! Go to any college and the Feds pay your tuition as long as you maintain a 3.2 every semester, etc. Go to the doctor every year and maintain your weight, stay off drugs, excessive alcohol, etc... you get $500, etc. This nonsense about how many miles do you drive to work and do drive a hybrid or an electric car... whatever, create a better system by focusing on tomorrow, not on today!
Anyway, this is a call to abolish the IRS in its current form.
Thoughts?
2 comments:
Im not sure if its that straight forward. Even a flat tax can be manipulated by mis-stating income.
The current system in place has every incentive to flub on your taxes. Say "I forgot" to claim intrest income. Well then my reported income would be lower than it should had I not "forgotten". Two possible senarios then unfold.
1)The IRS does not catch me and I escape part of my tax liability
2) The IRS does catches me and I simply pay the difference. (or what I originally should have paid)
My point is, using this "I forgot" strategy limits your liability to what you should have paid and raises your potential gain to whatever you can get away with.
(Note: this strategy probably cant be used year after year, assuming the IRS will eventually catch on!)
Good point and agreed. Some one who wins the lottery, should 'forget' about it and claim they were on their island, drinking margaritas and it never occurred to them to pay taxes!
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