If you've been working hard this past year and have either joined the ranks of the middle class or otherwise moved yourself up the ladder, the government is about to penalize you for your hard work with its progressive tax system.
If your tax situation is more complicated or more uncomfortable than you like dealing with, you can pay another human being to do your taxes so you don't have to. There are dependents, mortgages, deductions from energy-efficient household additions, charity, student loan interest ... even with a Ph.D. in economics, it's hard to understand!
What if we all received our full pay every month and just wrote a check to the IRS at the end of the year?That is why we have tax preparers, tax accountants, and tax managers. But you know there's something wrong with the tax system if an economist can't figure it out.
Senator Phil Gramm of Texas used to campaign for a simple flat tax system, walking around with a small postcard-sized form written with a simple equation that would determine a person's annual taxes rather than the omnibus we have now, but he got nowhere.
A flat tax would be wonderful for us normal citizens, but the lobbying pressure from the tax accountants, tax lawyers, tax planners, retirement planners, and similar jobs was too great. There are whole industries built around our overly complex tax code, and the majority would go out of business if we reformed our tax system as we should.
The saying that the government pays people to dig holes and then pays others to fill them must have been about taxes.
But what if, instead of withholding taxes from each paycheck and acclimating people to lower income, everyone only had the option of receiving their full pay and then writing a check to the IRS at the end of the year?