EDITORIAL - WE NEED TRUE TAX REFORM
The idiot in the White House (I know there are currently several, but when I use that descriptive phrase I refer, of course, to the biggest one – Trump) FU-ed what should have been an easy task for a Republican-controlled Congress – repealing Obamacare, or, more better, repealing the many bad aspects of the ACE (see my TWTP post OBAMACARE- THE GOOD, THE BAD, AND THE UGLY).
He is now apparently ready to take on tax reform. Please, let us hope he does not also FU that, too.
As a tax preparer I know full well that the United States Tax Code has grown into what I frequently refer to as a “mucking fess”.
The major reason for tax return errors, by both paid tax preparers and taxpayers who “self-prepare”, is the excessive complexity of the Tax Code. I strongly believe the current Tax Code needs to be shredded and totally rewritten from scratch.
I also strongly believe that the one and only purpose of the Tax Code is to raise the money necessary to fund the government.
The new Tax Code must –
(1) Be simple – easy for everyone to understand. Simplicity for simplicity’s sake.
(2) Be fair and equitable - treat all taxpayers equally.
(3) Be consistent – treat specific conditions, situations, and activities, and maintain specific definitions and descriptions, the same in all instances.
(4) Encourage savings, investment, and growth.
(5) Index for inflation all allowable deductions and credits.
The new Tax Code must not –
(1) Be used for social engineering, to redistribute income or wealth, or to deliver social welfare and other government benefits.
(2) Encourage or discourage certain economic decisions (other than savings, investment, and growth), or provide exclusive benefits for specific industries, business activities, or classes of taxpayers.
(3) Contain any refundable credits, or any phase-outs, exclusions or adjustments based on Adjusted Gross Income or Modified Adjusted Gross Income.
(4) Contain any “alternative” tax calculation systems (such as the current “Alternative Minimum Tax”).
(5) Contain any temporary deductions, credits, benefits, or provisions.
This new Code would state “Everything is taxable, except . . .” and “Nothing is deductible, except . . .”. Only those “excepts” – exclusions and deductions - that are absolutely necessary and appropriate, in the context of the “musts” and “must nots” listed above, should be added back.
One of the biggest problem with the current system is the inappropriate use of the Tax Code to deliver social welfare and other government benefits – hence its appearance as #1 on our list of “must nots”. This practice is not only inappropriate, but it also invites and encourages tax fraud.
The Internal Revenue Service, and the tax professional community, should not be required to act as Social Workers and administer and verify government program benefit payments.
I am not saying that the government shouldn’t provide financial assistance to the working poor and college students, provide encouragements for purchasing health insurance, making energy-saving purchases and improvements and other “worthy” actions, . What we are saying is that such assistance and encouragements should not be distributed via the tax return.
The benefits provided by the Earned Income Tax Credit and the refundable Child Tax Credit should be distributed via existing federal welfare programs for Aid to Families with Dependent Children. The benefits provided by the education tax credits and deduction for tuition and fees should be distributed via existing federal programs for providing direct student financial aid. The benefits provided by the Premium Tax Credit, the energy credits, and other such personal and business credits should be distributed via direct discount payments to the appropriate vendors or direct rebate programs funded by the budget of the appropriate Cabinet department.
Distributing the benefits in this manner is much better than the current method for many reasons:
1. It would be easier for the government to verify that the recipient of the subsidy, discount or rebate actually qualified for the money, greatly reducing fraud. And tax preparers, and the IRS, would no longer need to take on the added responsibility of having to verify that a person qualifies for government benefits.
2. The qualifying individuals would get the money at the “point of purchase,” when it is really needed, and not have to go “out of pocket” up front and wait to be reimbursed when they file their tax return.
3. We would be able to calculate the true income tax burden of individuals. Many of the current “47 percent” would still be receiving government benefits, but it would not be done through the income tax system, so they would actually be paying federal income tax.
4. We could measure the true cost of education, housing, health, energy and welfare programs in the federal budget because benefit payments would be properly allocated to the appropriate departments.
Let us hope that the idiots in Congress act intelligently for once and enact true and appropriate tax reform.
ROBERT D FLACH
TRUMP HAS PERVERTED THE AMERICAN DREAM
The American Dream is that anyone born in the United States can grow up to become President.
The selection – not election (he wasn’t elected – he lost the election by over 3 Million votes) of Donald Trump has perverted the dream.
Trump has shown us that any idiot with lots of money and a big mouth, regardless of how unqualified or inappropriate or deplorable, can become President.
THE LIBERTY BUZZ – Online Digest
+ “Worse than just being a liar or a narcissist, in addition he is paranoid, delusional and grandiose thinking and he proved that to the country the first day he was President. If Donald Trump really believes he had the largest crowd size in history, that’s delusional.”
So says one of the group of psychiatrists attending a conference at Yale University.
According to “Donald Trump has 'dangerous mental illness', say psychiatry experts at Yale conference” from INDEPENDENT –
“Donald Trump has a ‘dangerous mental illness’ and is not fit to lead the US, a group of psychiatrists has warned during a conference at Yale University.
Mental health experts claimed the President was ‘paranoid and delusional’, and said it was their ‘ethical responsibility’ to warn the American public about the “dangers” Mr Trump’s psychological state poses to the country.”
Many of the psychiatrists assembled agree with me, and many other professionals and lay people, that “Trump is mentally unfit to be president”.
Republicans must use the 25th Amendment to remove Trump from office for mental incompetence!
+ The LA TIMES has published an excellent series of editorials on “The Problem with Trump”. The series includes -
Why did the paper present this series? (highlight is mine)
“The answer is simple. Even though we’re only 11 weeks into the Trump presidency, there is good reason to believe that rather than grow into the job, he’ll remain the man he was on the campaign trail — impulsive, untruthful, narcissistic, ignorant of the limits on presidential power and woefully unprepared to wield it. Rather than wait until the public grew inured to the lies, the undermining of democratic institutions, the demagoguery and bluster, we decided to lay out our concerns at length and in detail.”
+ Trump’s selfishness and consistent use of the Presidency to line his pockets and the pockets of his family costs American taxpayers millions of dollars unnecessarily.
That is the “take-away” from the NBC piece “Trump’s Mar-a-Lago Travel Triggers Cost and Ethics Concerns”.
The item also highlights Trump’s hypocrisy. He constantly complained about Obama’s vacations and golf-playing.