John Stossel on income taxes

[George K]

Taxation Without Reason

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My income tax is due in a few weeks!

I hate it.

I'm pretty good at math, but I no longer prepare my own taxes. The form alone scares me.

I feel I have to hire an accountant, because Congress, endlessly sucking up to various interest groups, keeps adding to a tax code. Now even accountants and tax nerds barely understand it.

I can get a deduction for feeding feral cats but not for having a watchdog.

I can deduct clarinet lessons if I get an orthodontist to say it'll cure my overbite, but not piano lessons if a psychotherapist prescribes them for relaxation.

Exotic dancers can depreciate breast implants.

Even though whaling is mostly banned, owning a whaling boat can get you $10,000 in deductions.

And so on.

Stop! I have a life! I don't want to spend my time learning about such things.

No wonder most Americans pay for some form of assistance. We pay big -- about $104 billion a year. We waste 2 billion hours filling out stupid forms.

That may not even be the worst part of the tax code.

We adjust our lives to satisfy the whims of politicians. They manipulate us with tax rules. Million-dollar mortgage deductions invite us to buy bigger homes. Solar tax credits got me to put panels on my roof.

"These incentives are a good thing," say politicians. "Even high taxes alone encourage gifts to charity.

But "Americans don't need to be bribed to give," says Steve Forbes in one of my videos. "In the 1980s, when the top rate got cut from 70% down to 28% ... charitable giving went up. When people have more, they give more."

Right. When government lets us live our own lives, good things happen.

But politicians want more control.

American colonists started a revolution partly over taxes. They raided British ships and dumped their tea into the Boston Harbor to protest a tax of "3 pennies per pound." But once those "don't tax me!" colonists became politicians, they, too, raised taxes. First, they taxed things they deemed bad, like snuff and whiskey.

Alexander Hamilton's whiskey tax led to violent protests.

Now Americans meekly (mostly) accept new and much higher taxes.

All of us suffer because politicians have turned income tax into a manipulative maze.

We waste money and time and do things we wouldn't normally do.

Since I criticize government, I assume some IRS agent would like to come after me.

So, cowering in fear, I hire an accountant and tell her, "Megan, don't be aggressive. Just skip any challengeable deduction, even if it means I pay more."

I like having an accountant, but I don't like having to have one. I resent having to pay Megan.

I once calculated what I could buy with the money I pay her. I could get a brand-new motorcycle. I could take a cruise ship to Italy and back every year.

Better still, I could give my money to charity and maybe do some good in the world. For the same amount I spend on Megan, I could pay four kids' tuition at a private school funded by SSPNYC.org.

Or I could invest. I might help grow a company that creates a fun product, cures cancer or creates wealth in a hundred ways.

But I can't. I need to pay Megan.

What a waste.

[Axtremus]

I once calculated what I could buy with the money I pay her. I could get a brand-new motorcycle. I could take a cruise ship to Italy and back every year.

A “brand new motorcycle” in the USA averages $10k in 2022. No way an “individual” tax return preparation costs that much. The “average” tax return preparation fee is around $220 according to this article. You have to have a fairly complicated business and/or multiple small businesses and maybe taxable income from multiple states or even foreign income to get to $10k of tax preparation fees a year.

Not that the author is wrong about the tax code seeming unnecessarily complicated for the average American, but the “brand-new motorcycle” and “cruise ship to Italy” comparisons reek elitism and show the author to be out-of-touch with the reality of the average American.

[Jolly]

I think we need to hold a Special Session of Congress dedicated to rewriting the tax code. The goal should be to simplify and create an environment where all taxes are easier to do, be they individual or business. As part of the session, any changes should require a majority of at least 60% in further legislation.

While the session is ongoing, I'd like to see congress critters and their staffs sequestered, with little or no involvement by the K Street Klan.

[Jolly]

@Axtremus said in John Stossel on income taxes:

I once calculated what I could buy with the money I pay her. I could get a brand-new motorcycle. I could take a cruise ship to Italy and back every year.

A “brand new motorcycle” in the USA averages $10k in 2022. No way an “individual” tax return preparation costs that much. The “average” tax return preparation fee is around $220 according to this article. You have to have a fairly complicated business and/or multiple small businesses and maybe taxable income from multiple states or even foreign income to get to $10k of tax preparation fees a year.

Not that the author is wrong that the tax code seems unnecessarily complicated for the average American, but that “brand-new motorcycle” and “cruise ship to Italy” comparison reek elitism and show the author to be out-of-touch with the realities of the average American.

A $10k tax return? Yep, I can see that.

[89th]

I have a simple brain. Keep taxes simple. You pay a flat % based on your income, regardless of source. The more you make, the more you pay, the less you make, the less you pay. Revenue would be highly predictable and congress could budget accordingly.

Anyway... I did my taxes last night. I chuckled when I added that I have a new dependent (born in Jan 2023) that they asked the gender "M or F" and then had a help button if those choices weren't enough.

[Jolly]

I'd also like to see everybody with earned income pay taxes. Everybody. Doesn't matter if you make $10 or $10M. Everybody.

I'd also like to see an end to the unearned income tax credit. Period.

I think the above suggestions do a couple of things:

1. When you have skin in the game, you're less likely to just want to fling money around.
2. No unearned income tax credit gives lower income workers more impetus to educate and train for better jobs. It also forces employers to quit depending on the government to subsidize their workforce. Workers will flow to where the money is, even in lower-paying jobs.