Anyone who’s followed this space for any length of time knows I despise tax season.  I don’t generally use the term “hate”, but in this rare case it seems to apply.

Hate,    –verb (used with object)

to dislike intensely or passionately; feel extreme aversion for or extreme hostility toward; detest: to hate the enemy; to hate bigotry.

I’m not to the point of  “extreme hostility” yet, but the rest of the above certainly applies.

It’s not that I’m against paying taxes.  I understand the benefit.  Someone has to pay for the roads and highways we use, banking and aviation infrastructure, etc…

It’s the rest of the fraudulent and wasteful crap that my tax dollars spent on that really peeves me.

At any rate, corporate returns are due Monday, and I’ll be filing an extension.  Not because I’m not ready, I just don’t like being rushed.

More on how things turned out later.

Taxes tax code, Taxes

While I’m not attending a tax day tea party today, I’ll certainly drink a cup of tea in honor of the idea.

The topic of taxes comes up about this time every year, and every y ear I grovel at the fact of actually writing the check.  I don’t mind paying taxes; I understand their value.  After all, someone has to pay for the highway system, post office, etc.  Services we all use.

It’s what my tax dollars are used for that really chaps my hide. Hearing about all the wasteful spending that’s going on in Washington, the bailouts, the TARP, the budget.  Yeah, I don’t mind paying taxes, but spend my money wisely, damn it!

And simplify the code!

After this years tax season I’m more adamant than ever about simplifying the tax code.  In my opinion, the whole thing needs to be scrapped.  Get rid of it.  Burn it.  Shred it.  I don’t care, just don’t use it any more.

We have to simplify the system; be it through a FairTax, a flat tax…  To consider either one of those ideas is a start.

Our current code is over 65,000 pages in length.  There is no way any citizen of this great country can be expected to read, understand and comply with this garbage every year.  It’s no wonder so many people are paying someone else to prepare their taxes.

It’s also no wonder that even our politicians can’t even get their taxes right.

I’m not giving them a pass, and I believe a number of them are willfully cheating the system, and they should be held accountable.

I’m a big fan of Glenn Beck’s program, as I think he provides a sensible voice of reality to today’s issues.  And I don’t think I could have made a stronger argument for a new tax code any better than in his “The One Thing” segment below.

Happy tax day.  And enjoy your tea!

Taxes Fair Tax, Flat Tax, Glenn Beck, tax code, Taxes, Tea Party

Barack Obama announced the establishment of a new panel to look at overhauling the existing tax code.  Former Fed Chair Paul Volcker will be in charge of the review, with the goal of closing loopholes, simplifying the law and generating more revenue.

Under Volcker, White House senior economic adviser to Obama Austan Goolsbee will be the staff director, and report back to Volcker.

Obama plans to ask Volcker, Goolsbee and the panel for a package of recommendations to be on his desk Dec. 4, which would leave enough time for decisions to be made and included as proposals in the White House budget for fiscal 2011, to be submitted to Congress in February 2010.

A little history.

Volcker served as Fed Chairman from 1979 to 1987 under Presidents Carter and Reagan, a time when inflation was running rampant leading Volcker to drive interest rates up to 20%; effectively choking off home-buying car purchases and other consumables.

Wages were driven down and corporate America was redefined through numerous strikes and high unemployment (over 11% in the early 80’s).  Arguably the economic mess, influenced by Volcker contributed to Carter’s defeat to Reagan, but interestingly enough, Reagan retained Volcker as Treasury Secretary throughout his presidency.

With striking irony, it was during this time period that the Democrats first bailed out the Chrysler Corporation as Carter provided loan guarantees in return for wage cuts by the UAW.

Fast forward to today.

With Volcker back in Washington, the game should seem familiar.  The Democratic President is in the process of bailing out the big three auto manufacturers while demanding wage concessions from the UAW.  In a round about way, Volcker transformed what was then a very dominant portion of America’s working class in to politically exploited labor group.

In addition it should come as no surprise that Obama touts Volcker as an ideal candidate for the “Economic Recovery Advisory Board”, considering the considerable amount of money (on the order of $2,500) Volcker contributed to Obama’s campaign.  It helps that Volcker’s historical decisions align well with Obama’s vision of “change” for the future.

Corner Office Comments

When I first read the headlines, I was elated.  Finally Obama was going to do something good for the country and simplify the tax code.  After paying $800 per year to have a professional prepare my taxes, resulting in nearly 150 pages of documents, you can understand why I’d be interested in this proposition.

After thinking about it though, Obama’s motive for revamping the tax code isn’t to make my life easier, it’s to bring in more money.  He really wants to close existing loopholes while sliding increased rates into the code, all under the guise of simplifying the code.

The fact that he brought Paul Volcker in to lead the team doesn’t bode well given Volcker’s experience raising interest rates (another suggestion that inflation is coming, with higher interest rates to follow).  In essence, it’s a match made in heaven: the guy who drove down wages through higher unemployment rates labor strikes in the auto and mining industry, teams up with the guy who strives to do the same, just on a much more grandiose scale.

I suspect that redefining the tax code will segue nicely with increasing interest and tax rates, while whitewashing the public into believing that it’s all part of his “hope and change” scheme… it’ll just require a lot of patience.

I’d like to see more proposals like the FairTax and the flat tax get more air time and be part of further discussion.  I particularly like the FairTax idea, which taxes consumption versus earnings.  More on the FairTax idea later…

Economics, Taxes FairTax, Flat Tax, Paul Volcker, tax code