We’re going to hear this like a million times before the presidential election season is over. It will come in the form of “simplify,” create a “flat tax, “reduce,” or “re-classify” are all key terms to look out for.
The truth is, the reforms these people talk about, I’m 90% sure, won’t happen.
SO WHY DO THEY PROMISE IT!?
Here’s why …
I HATE TAXES!
The natural thing for a politician to assume is that people hate taxes (the next logical thing to assume is social stances of your constituents, which you would derive from a variety of methods). From this base assumption, it’s no wonder politicians emphasize tax overhaul in speeches. It gets people riled up when thinking about all the money they could save. People think of vacations, cars, TVs, HOME REPAIRS, BOATS! THE POSSIBILITIES! … or they just think about keeping their water and lights on.
Anyway, politicians then lay out possible solutions to the tax “problem.” This usually is a buffet of flat or graduated approaches(which is what we currently have), or they simply say they want to “simplify” the code. Some hardcore types even claim they are going to abolish taxes. HA!
The reason candidates do this is because it’s an easy message to deliver, and FAR easier than actually determining what would fix the American tax system. … and they want power. And perhaps to leave a name in the world.
I would say that determining your tax bracket is not the difficult, or controversial, part of doing taxes. Rather, it’s all the stuff in the middle that gets messy. Politicians mention this in passing as well, and they call that stuff “loopholes.” When they say that, they’re referring to the credits, deductions, rules of various account codes, and all that stuff in between looking up your tax bracket, and then determining your “true” tax bracket after all things considered.
In reality, the IRS has a pretty decent hold on tax theory, how they are collected, and what is acceptable for various levels of incomes.
Politicians can’t acknowledge this. If they do, nobody would listen to them.
Are there problems with taxes? Of course!
What is the problem? It’s all the ways people and organizations can use all that stuff in the middle to twist their income numbers to make their “real” tax payment numbers low. The real problem is looking at all the messy stuff to ensure that people can’t distort their incomes to evade taxes. This has always been the problem, and always will be the problem.
But, working class Americans don’t care about that. They simply want to hear “less taxes” or “simplified” taxes. If we really examined the tax code, it would become a roundtable discussion, and not a debate (which doesn’t make for very compelling television).
I mean really, It’s impossible to answer any question about taxes substantively with the 30 seconds you get on the debate stage. So, instead, politicians radically simplify their messages, and this principle generally holds with all of their positions.
At the end of the day, normal people want to hear “for” or “against” something, and not think about, or discuss, actual policy development.
Why won’t taxes change?
First, to overhaul taxes radically — that would most likely need a vote, somewhere. I’m not a tax scholar, but we can safely assume that an overhaul in taxes would be similar to the national budget. In this process, the House and Senate volley around the budget until it’s agreed, then signed by the president. We, as Americans, should be familiar with this procedure.
The problem is getting something like that pushed through. It would be a highly complex overhaul, and the House would have to contribute a huge portion of it’s resources to it. You can’t just say “flat tax” and be done. What about retirees, people on social security, homeowners, nonprofits, contractors, manual laborers? You’re telling me that 15% flat is going to work in their eyes? No exceptions, everyone pays that tax, and doesn’t get it back? There are lots of people with different tax circumstances in the United States, AND there are like 340 million people! There is no way a one-size-fits all approach would work in any capacity …. I see lots of pushback, and problems there.
Again, political candidates are lying.
BUT, to be fair, if they don’t lie, then nobody would listen. As it stands, they are going to promise all sorts of stuff, and then it won’t get done because it’s far easier to fix the system already in place than to reinvent the wheel (because that won’t happen).
The president can tell Congress what (s)he wants to emphasize, and the presidential budget office can put a plan out (and the Congressional budget office can but it’s version out), but to reinvent the tax code singlehandedly is not going to happen.
WHAT ABOUT LOWER TAXES!?
Realistically speaking, changing taxes at a federal level is ridiculously hard. The probability of you changing taxes in the immediate future increases as politics becomes more local. You want less sales tax? That could be the state, county, or even city. The first step is to identify the source of that tax, look at candidates, get mad, call them up, yell, get some signatures going (which is easy with the internet now), and target taxes locally.
To save some taxes more immediately, you should do yourself a favor and identify your city or county representative, and put some pressure on them — because local politicians don’t always work as hard as they should, especially considering that your local mayor may have been in office for the past 40 years, and really does nothing at all.
So before you people start yelling at presidential candidates about taxes, think about what it would REALISTICALLY take to change the tax situation in America, and then, as an alternative, start to identify the biggest tax drains at a more local level.