Our Tax Code Needs an Overhaul

Alexis I agree with u. this old antique tax code creates a double standard. Why should politicians not pay taxes when everyone else does? What makes them special and gives them special rights? It's time for a real overhaul. How many other politicos stories are about to break on not paying backtaxes? But the IRS needs to streamlined and a RIFED for its own sake.

I am a CPA and have been preparing tax returns for ovwe 30 years. We do not want the Congress to do an overhaul because the last time they did it (mid '80's) the code went from 1 book to 2. The best thig we can do is junk it and the IRS and go to the "Fair Tax" I know this puts me out of business but that's OK because i'm tired anyway

I have always been for a flat tax, and I wish it would happen to keep the tax code very simple. Unfortunately you will never get the demos to agree to it for it is not their socialist make the rich pay scheme. They want to have the poor and the middle class entitled to the demos forever.

As in all things in life, "kiss" it! Keep it simple sam ( or you can use stupid, depending upon who you are talking to ). As in most things in life, the first step is always the toughest and scary, but once you do it, you go wow, why didn't I do that earlier. I am definately all for this one flat tax rate, who cares what the rate is, at least it will be simpler, fairer, and catch/stop the cheaters. 17% after the first 46k or so sounds real good to me! Take away my house deduction, etc. I don't care! What I want is something that is fair for all and stop the cheats!!!! What do we need to do to get the ball rolling?!!!!??? Just let me know and I will be there to help all the others that want to get the ball rolling and get this flat tax thing done!!! Lets get together people and stop talking about it and do something!! Jeff Stadalman

Alexis: Reasonable people can disagree; does it follow that Unreasonable people can agree? Of course! Everyone's agreement is that wow that's great, but what about all the accountants out of work, what about all the IRS agents practicing their stalking and forensic accounting hobbies.. now unsupported; what about all the lawyers who will be missing widows and orphans who are easy cases to win or scare with major jail time (depending on whatever psychotic symptom the lawyer cares to display, advertise or otherwise profit from? And what about the printers, government workers who must edit and file as well as duties to publish manuals on how to use government copiers (Yea, a friend is an attorney for the Labor dept.; she gets about 8 wks off per year and that was the last major job she had) yea what about that? And what, a bout with you an me who either pay some accountant (who sides with the gov't on any issue for fear of being audited him/herself?) Oh, how will Trouble - I mean Turbo tax - getting off cheap with $50 to $150 for a program and then those fun 50 hrs of spare time to answer all the fun questions -and then there's that harddrive that crashed and now all my depreciation items are forgotten. Yea, I didn't want my taxes hacked on my computer, so who froze my harddrive? CIA? Yea and what about all the Psychiatrists, Internists, and others concerned with drugging you into compliance - oh happy thoughts & hemeroids? Drug co. profits, who cares, sum total APATHY.

Alexis, Sure, we all have probably made mistakes but you have a limo and a driver for years for free and you don't think that is income. Come on....I'm not smart but nothing is free. Even the poor lotto players know they pay taxes on their winnings. And what's the first thing people say after some pro hits a hole in one on a par three to win a car........."I hope he can pay the taxes on that Mercedes!" gordon

The current tax code needs more than just an overhaul; it needs to be repealed in favor of a flat tax, a fair tax, some other method of assessing taxes or some hybrid system. However, the complexities of the current tax code cannot be used to absolve public office holders from their responsibilities. You and I wouldn't be "given a pass" and neither should politicians. The cases of Timothy Geithner and Charles Rangel are especially troubling. Timothy Geithner's problems should have disqualified him from consideration for Secretary of the Treasury. Charles Rangel's problems should have at minimum removed him from his House Chairmanship position.

I agree with you that the tax code needs to be overhauled and simplified. It is a drag on our economy riddled with special interest provisions, confusion and inconsistency. However, these are the laws and rules that Congress passed. There should not be one set for the 'connected and influential" and another for the "common man" and the "little people". America need to return to treating all people equally, that is what a legal system is for, and if it does not do that it loses its legitimancy. I like your passion, but you seem a little nieve. You really should do your own taxes once in a while to stay grounded. Politicans should also be required to do their own taxes. This might bring some sense to our tax code if it were required. Even the IRS cannot give you the correct answer on most of these tax code provisions on a regular basis.

I have an idea. Beginning 01 Mar 09 delay collection of federal taxes paid on wages from both employers and employees until 31 Dec 09. Then if 100% of those taxes are deemed due (across the board) the employers would be responsible for paying their liability generated through the period and the employees would be responsible for paying their liability generated through the period. 01 Jan 10 resume federal tax collection with each party paying their own taxes due. Just a different perspective, Holly

Steve Forbes is close to being correct about the tax code but misses the big point; the government does not have a right to the fruits of our labor and therefore no income tax is legal or even necessary. A much better plan would be to have a simple gross receipts corporate tax that is simple and easy to calculate. Steve Forbes' flat tax idea is just as bad, or worse, than the current system because it still allows the government to take money that it has no rights to. Remember, this is America and we are suppose to be free but there can be no freedom as long as the government has rights to your money.

I am outraged at the "tax issues" that surface in our public officials. This only means that we are seeing the tip of the iceberg. I recently spent hours on turbo tax as well as over $150.00 in filing this years taxes. I strongly suggest that we get on the ball and explore the Fair Tax proposed by Senator Linder. The enactement of this plan would not only eliminate the bias in taxation but would insure that everyone pays taxes since the tax would be applied to everything we purchase. One must read the book on fair tax and UNDERSTAND how it is structure before commenting. It would help our economy immensely. Cal Johnson

Good morning Alexis, I'm not sure what you have done but your look is fabulous. You are definitely the Carrie Underwood of the financial world! Now back to business. Steve Forbes is so correct about the tax code. Its an abomination (or an "Obamanation). One thing that should be done for business is to go flat tax and get rid of depreciation schedules. I see a lot of companies that have closed up and the quality of equipment is pathetic. Its old and worn out quite often. Either companies just didn't want to spend the money to upgrade or couldn't afford it. Why not let companies write off the entire amount if they purchase the machine in the year of purchase instead of over 7-10 yrs. on the schedule. We need manufacturers to invest in the latest and greatest constantly if we are going to succeed. Soon the world will hit a production cost parity where almost all countries will be on the same level given variables of energy,transport,material and labor costs. Those who are the most efficient will be the winners. We need incentives to get rid of old equipment plus a change in attitudes in the head shed. I worked for a company several years ago that didn't want to replace a piece of equipment that would have paid for itself in less than 6 months in gained efficiency,reduced downtime,better quality and lower labor cost. Pretty basic stuff but there seems to be a major brain blockage. Thanks Jim Rogers

As our congress acts like a college student with dad's credit card, it occurred to me that expanding the role of the SBA and available funds would have been a direct infusion into the job producing portion of our economy. An effort to craft clear standardized accounting rules and standard contract terms for all borrowers would be another goal. Revision of the Tax Code would go a long way to ease the distrust that Congress now engenders. New oversite of the Mortgage Lenders is in order. If congressmen such as Rangel and Dodd had any integrity, they would step down from their posts immediately. Some modicum of ethics and leadership ability are required and neither has demostrated such qualities. Speaking of leadership, perhaps Pelosi and Reid should get new dictionaries that define bipartisanship for them. The current modus operendi of our Congress is despicable. Each and every bill should stand on it's own merits and be voted up or down individually, eliminating the poison pill contained in every bill currently before Congress which so poorly guides the direction of the country. Every aspect of Health Care should be considered without distraction. As it stands now, the government has complete control of each and every fee. If fraud or deception exists, it should be prosecuted individually, not by punishing the entire Medical Profession. Our Constitution does not address health care but it does guarantee justice, therefore, control of the Legal Profession is needed.

There's the tax code...then there are complicated tax shelters...off shore accounts...where anyone, including the rich, corporations, lawyers and doctors, can hide their profits from the IRS. Please ask Larry Summers and Tim Geithner how they plan to collect the $250 - $300 billion in taxes owed to the IRS each year. Please read article by Samuel Loewenberg "Offshore Thing".

Yes, A Tax Code overhaul should be a top priority!. There is no reason that we have the burden of carrying the tax liability and the IRS. Steve

It is hard to believe there is little to no discussion on changing the Tax code. This is the single most reason we go from one financial crisis to the next since 1929. We can not keep taxing investment and production and expect to maintain our capital markets. Every economist knows capital is what drives a free market. Further, why is nobody complaining vociferously about the wealth we (America) created resides overseas. It has been reported there is $10 to $13 TRILLION residing overseas in profits on sales and investments that will not be repatriated to the USA. These monies are from USA corporate profits and investments placed overseas by very wealthy USA citizens and investment funds. The current tax code requires anywhere from 25% to 55% tax if these monies are repatriated. Given the current circumstances if we could just reduce this rate ( even temporarily )to 5 to 10% I would estimate half of this money would flow back into the USA. That would be close to $5 TRILLION. More than enough to stop this TARP and BAILOUT nonsense.

When people like congressmen and our new treasury secretary, people who in theory are much smarter than little old me can't seem to figure out how to file their taxes accurately ... it's time for a change. The Fair Tax is the only thing I've heard that makes sense. And the beauty of it to me, in addition to it's simplicity, is the fact that it is a consumption tax ... no one can get out of paying it and this includes people in illegal cash businesses like drug dealers, prostitutes ... they still have to purchase things and would then be subject to paying the same taxes as the rest of us.

Alexis - Steve is on the right track but his plan does not address the fundamental problem of how we got to the point of having 65,000 pages of tax code. The FairTax does what his flat tax does and fundamentally changes the way politicians would have to go about changing the rules later on. The real reason that the tax code does not get changed is because it would take away the power of politicians. This is the question you should be asking the law makers.

Alexis Congress has proven two points: policitians don't know jack about economics.Second they prove this quote from Lee Iaccoa: Goverment is a problem prolonge. Wouldn't u agree?

Read "The Fair Tax Book" and "The Fair Tax: The Truth" by Congressman John Linder and Neal Boortz. The books are a quick read and inexpensive, approximately $15.00 each. If that is too much go to the library and get it, but GET THEM both. The Fair Tax is just that FAIR, everyone is treated the same no matter what income level. Listed below are just a few benefits of the Fair Tax: No federal income taxes, no payroll taxes, no self employment taxes, no capitol gains tax, no gift or estates taxes, no alternative minimum taxes, no corporate taxes, no payroll withholding, no taxes on social security, no personal tax forms, no personal or business income tax record keeping and no personal income tax filing. The federal government is funded through a national sales tax, the book suggest a rate of 23%, which is already embedded into every product we already purchase today. But everyone would pay it, honest people, drug dealers and illegal immigrants and so forth. Corporate money in the trillions, 13 trillion US dollars are sitting in offshore tax haven banks accounts to avoid the US tax code. That money would come back to the US. Jobs would come back from overseas because they would know their tax liability at the start and not have to waste time and money determining the tax consequences of business decisions. Mr. Forbes is right, it is going to take the people of the US to band together to get this on the front page of every politician mind. Write your President, Senator and Congressman. Most politicians and all lobbyist are against the Fair Tax because it takes power from the government and stops the millions of dollars that lobbyist are paid to rig the current tax code to suit the highest bidder. Finally, Fox Business news needs to educate all their viewers and spread the word. Alexa Glick please get the ball rolling on a national level, this will only make America stronger and freer.

The Fair Tax is the way to go. No loop holes, no games-playing trying to lower your taxes, but also no constraints on growth, either pesonally or at the corporate level, which is what this country needs right now ... economic growth. Implement the Fair Tax and watch this country prosper like it never has before.

Since you long for the old days. Let's go back to the Eisenhower Era when the top tax bracket was 70%. A flat tax at that rate makes a lot of sense to me!!

Lets think about this. Our Government is the problem. We have a major deficit. Our country is in a recession. When a disaster happens somewhere else in the world, we are there handing out financial and moral support. When that hurricane hit Louisiana, those people were abandoned for the most part. They would have been much better off if they lived outside this country. It was other Americans that pitched in to help out, open up their homes, donated food and clothing. It wasn't our Government. We have so many people out of work. So many people without medical insurance. So many people losing their homes and can't afford to put food on the table to feed their families and what is our Government doing about it? They're giving everyone on average another $13 a week in their paychecks. Ok, that might cover the increase in price of a few groceries.

Continued.......We need to start taking care of our own. I'm not saying that we need to close our eyes or our hearts to others but I do believe that charity begins at home. Why kill ourselves to put our kids through college when there are no jobs to be had? Let's start beating up on those that take advantage of those in desperate need. Take H&R Block for example with their refund anticipation loans. People are hurting. The hear the commercials, they need money now so, they go to H&R Block where as much as 40% of their refund is being charged as the fee. It's even more at times. These people are cutthroats, embezzlers and loan sharks. Where is the compassion? They should be put out of business. Law makers need to start taking a good look at companies and their practices. They need to start cracking down on those bottom feeders out there who are making the economy worse, not for themselves of course. They are bringing in money hand over fist. Let's get back to the basics that this country was founded on and make this country healthy again!

I agree with your major point, Alexis; the system is far too complex and should be discarded in favor of a simpler system. Some variation of Forbes' idea has been on my radar for 30 years. The mortgage debacle we're in right now only reinforces the point because government incentives for being in debt rather unsurprisingly encourages too much spending, speculation, and irrational markets. I hear two powerful, fundamental barriers to reform, and both are basically political. First, First is the social engineering we do with taxes. Most people don't realize that abut 1/3 of the people pay no taxes, and a large percentage of them are actually getting money out of the system by credits. The new program will only exaggerate this abuse. I say we can choose to directly write checks to the lower income reaches of the economy. That is a variation of socialism, and we're doing it already; for my part, I don't like it but I believe in a democracy we can make those choices. The abusive part is to hide it behind a tax system. The other barrier comes from the middle and upper classes who feel they benefit from real estate deductions etc. They rightly believe that if tax benefits to home ownership were eliminated, the value of their real estate investments would drop. In other words, home costs are artificially inflated, ultimately benefiting only two industries: homebuilders and realtors. Why? Becasue if your house value goes up, so does the one you'd like to buy, so we end up with people buying excessively large and expensive houses trying to game the system. Our country does not benefit from this, and we have to find a way to withdraw federal subsidies for homeownership. So what Congress has done is to co-opt political support from virtually everyone, such that we are all afraid to act. So far it has worked. In the meantime, they have packed the tax code with goodies and giveaways to anybody who offered a campaign contribution. Capitalizing on our fear, they have obscured real spending priorities and the real state of our government's finances. What we as citizens need to do is to overcome our fear and press for reform, trying to convince everyone we can that Congress must be FORCED to change. My proposal bears resemblance to what several others have suggested, including Mr. Forbes: 1. Establish a level relative to the federal poverty level below which we do not tax. 2. Calculate the total amount of revenue required to support the current year's spending approved by Congress. Proportion this amount by an agreed percentage between corporate and personal taxes. 3. Simply estimate the total income of all Americans, and calculate the percentage of this sum that is required to balance the budget. 4. In regard to capital gains not from farms and personal, primary housing (which should be exempt, in my view), allow the gain to be corrected for inflation based on CPI, then tax it as real income, which it is. 5. No death tax. 6. Real estate freebies are tough, but the distortion must end-- over time. I can't do the math here, but a system must be established to allow it to be phased out over, say, ten years. Your audience is smart and sophisticated, and I'd love to hear some response.