Wednesday, February 4, 2009

Tax Problems are Everywhere

So far, at least three nominees for President Obama’s cabinet have gotten negative attention due to tax problems. Why is this? Maybe it’s extra hard to find any American who doesn’t mess up on his/her taxes, either on purpose or by accident.

The IRS Tax Code is so long and convoluted that I can’t even find agreement online on how many pages it is. The official count is somewhere over 13,600 pages! With that kind of extreme complexity, it’s no wonder people screw up when doing their taxes. It would also not be a surprise to find that millions of people cheat on taxes either by not understanding the laws, or by purposefully misunderstanding parts of the law to their own financial advantage. I suspect that even the IRS agents don’t understand all of their own code, especially since parts of it change every month.

I’m about to do my annual tax return. My tax situation is a little complicated but nowhere near as complicated as Tom Daschle’s is. I would have never thought that having a friend provide limo service for free, would result in a $130,000 tax. This is why millions of dollars are spent each year to hire tax accountants to figure out our taxes for us. Interpreting the tax laws is a huge industry. I think it’s ridiculous. We need a much simpler tax code. It should be easy for any person to do their own taxes.

Unless the U.S. Senate, who approves cabinet nominees, can prove that candidates purposefully cheated, I don’t see why it should be a big issue if the candidate messed up by accident.

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