It's Tax Time Again

Well, its that time of the year when we have to do our taxes. Over the past several years I have used Turbo Tax and Tax Cut. Both seem to be easy enough to use, unless you make an entry error and that happened to me. The result was that I underpaid taxes. I went to a CPA who quickly found my error and told me to pay up. Since then, I continue to use this software (which ever is cheaper), but I print out the tax return and take it to the CPA before I file it. So, I pay for the software AND a nominal fee for the CPA review. In total, I spend about $100 doing my taxes and spend many hours. My wife does her part by doing a spread sheet with medical bills. I do the rest of the stuff. I also do my youngest daughter's tax return. Man it's a chore, and procrastination is so easy. So, what's wrong with this picture? The tax code is too cumbersome. I have made one mistake on my tax return, the IRS caught it the following year and let me know it, in no uncertain terms. One year, the IRS sent me a nasty gram, but the error was not on my part. Nonetheless, they found the alleged error quickly and again let me know. What's wrong with this picture? They didn't seem to catch Timothy Geithner or Tom Daschle quite so quickly. And from the news reports, it seems these two guys earned the compassion of Senators who dismissed their oversight rather quickly. A totally different reaction from the one I got from my run-in with the fed over tax errors! What's the fix? I vote for a graduated flat tax. Everybody pays something, starting at tax rate of 1% for the lowest income tax payers and increasing to much higher income tax payers. It is not unreasonable to tax billionaires at a 50% tax rate, or higher. He who has more, pays more. Eliminate all tax credits, deductions, exemptions, rebates, and loopholes, save one. Allow tax credits for donations paid to non profit organizations and organized churches. The same tax code would be applicable to businesses. Tax is deducted from pay roll and it's that simple. An annual reconciliation to verify annual income is completed and the tax bill is settled. Jackson Hewitt finds another line of work, as do most of the IRS auditors. We need to define ordinary income that is taxed at the new rates. Ordinary income is any money received by the tax payer regardless of the source, capital gains, inheritance, etc. Tax time should not be this difficult. It is necessary, but it should be simple and fair. Don't you agree?