Excited about the tax cut? I keep being told I should be. But if I have to be honest, I’d say I really have no idea if the new tax law will lower my tax burden based on how I file. But given the government and its behemoth tax code, my answer can be only one thing: It’s complicated.
It’s also why I hire a CPA. I simply can’t keep up with 80,000 some pages of tax code. It’s also why the largest businesses on the planet hire CPAs as well. And no matter what your representative or senator told you, the new law only complicates the tax code even more. That’s because no matter how much easier, simpler or cheaper the government says it’s making something, these same things bring more work, harder-to-understand new rules and unintended costs for those the government claims to help.
So back to my CPA. I want everyone to know I adore my CPA. I worship my CPA. She saved my business during the most difficult time in my life. But even with the “yuuuuuggggee, greatest tax cut evah,” I’m going to need her more than ever. Why? Because I don’t understand the tax code. Admit it: Neither do you. And I bet my CPA would have to admit it as well since it’s always changing. In fact, employees at the IRS have little clue to the entire code either. They just have the ultimate fall back: If they want, they can find in that code some law taxpayers are breaking.
That’s still the problem. You see, I didn’t pay too much attention to the whole “tax cut” malarkey going on in D.C. over the past year. “Aren’t you in favor of lower taxes, Craig?” you ask. Of course I am. I just don’t trust government to actually lower them fairly. That’s why small business owners find out after the fact they’re losing write-offs for meals and entertainment, among other complications. I don’t know about you, but I’ve done a lot business over a beer in this town, and me being out and seeing people socially is a huge part of what I do to make the paper successful. It still will be, but I can’t write it off like I used to. If you’re a big business or a business that runs seminars, not to worry, your write-off is still good.
Is that fair? Am I picking fly poop out of the pepper? Maybe. But my poop is my poop. And everything the government does creates a bigger pile of it.
You might counter with the fact that I now have a larger deduction on my personal taxes and that should cover things for me. Perhaps it does, perhaps it doesn’t. I know my beloved CPA will run those numbers for me to see what benefits me most. That’s her job. But you know who else has a job in all of this? Politicians who believe in things like revenue neutrality — whatever the hell that is. In a nut shell, it means one main thing when it comes to taxes: If you give a break over here, get it back over there while the folks aren’t looking.
Now I’m sure if this is read by our elected betters, they’d come back with their talking points and statistics showing what they need to say and show — like tax cuts always produce more revenues. And then they’d find the times that it did, not the times it backfired. But my guess is little of any new tax law makes it easier for the taxpayers of this country. It simply can’t. Why? Because we’ll have to learn more about the new laws. We’ll need more advice as to what’s deductible and what isn’t. We will need to spend more time and effort than ever on taxes. That, my readers, is one of the largest costs of our tax system. And whether you’re doing your own research or using your accountant, you’re the one still paying. Just like with the silly 1099s we now have to produce annually (so the government can track our money it thinks is theirs) due to Obamacare, everything the government does costs us all as taxpayers.
Did big business benefit? You bet it did because the main law it now adheres to is simple: Their tax rate went down significantly. Did yours or mine? I have no idea.
The solution is simple: A consumption-based tax. Treat the little guy like the big guy whether they’re a business or not. One rate for all. Let’s say, 10 percent across the board on anything you buy. Now we’re treating EVERY taxpayer equally under the law. It would also treat businesses, non-profits and churches the same — ridding us of the constant argument over profits.
Now this takes one thing from government. it’s totally against doing. And that’s to base spending on the taxes it confiscates. Better yet, doing so could mean actually cutting spending to constitutional limits. Hell, if government did that, 10 percent might be too high.
But it’s hard to get fair laws on spending and taxes from the bully with the guns to confiscate the people’s wealth and print money as it sees fit. And until we address that problem, things will stay, well, complicated.