Thursday, September 20, 2012

Taxing Week

It has been a taxing week for me - literally.  The paperwork necessary for my 2011 taxes is painful (the pdf file is 110 pages).  Yes - 2011 since I filed for the extension.  I'm actually a month early since 2011 extensions are due Oct. 15, 2012.  It has become habit to just extend and procrastinate.  Actually is is decent tax planning because working on 2011 taxes provides me an efficient "learning curve" for 2012 tax planning - giving me 3 months of room to manuver.

I blogged in the past (taxes even has it's own tag) about the complexity of the code, the need for software (or an tax accountant), and the wasted productivity of resolving all of the exceptions.  The trouble with social engineering using the incentive (or disincentive) of the tax code is the inability to predict the behavior response of those being taxed.  For example the recent Affordable Health Care tax penalty for those without health insurance (now estimated at over 6 million) was set too low for the social engineering desire to "incent" people to buy health insurance. 

The uncertainty of tax rates, deductions and rule for 2012 make planning almost impossible.  It's like trying to play a scocer game while they are moving the goal posts. In fact the final ruling may be that you are playing with the wrong ball on the wrong field.  Yet we are required to estimate what we should pay or be penalized.

Romney pointed out that 47% of the taxable American citizens pay no income tax - yet they must spend the time (waste the time) to file a return. Obama and Romney want to reduce the tax burden on the middle class (what exactly is the middle class). 

The real burden is not just paying the check - it is  the time filing out the form.  Very taxing!!!!

No comments:

Post a Comment