14
Mar
11

When the Tax Man Come to the Door

From Fortunate Son by CCR

I paid my taxes today. Several questions are always prompted by my run in with turbotax.

First, I could, I think, save a lot of money IF I had taken the time to record every single thing I’ve ever done. This is because the number of possible deductions are enormous, but they all require detailed of records that I would have never thought to record, or worse, I did record them, but did not group them in the right way or did not organize them in such a way as to make them easily accessible. That’s why I might try to make a good faith effort to use MINT, which is a money managing type of software that imports directly into turbotax.

Still, though I wonder if it’s worth it. For me, I don’t make very much money so my taxes aren’t too high and neither are my savings from things. And so for the time it would take me to remember to record the odometer reading every time I get in and out of my car for a business related trip, it might be cheaper just to work a few more hours. This is a common theme though that people mention over and over, which is the loss in time that results from having to fill out taxes, and the cost of procuring all the forms that are needed to document the various parts of the tax scheme.

Another thing I get a kick out of is the really bizarre questions that turbo tax asks me to see if I qualify for certain things. For instance, did I own a ranch in conjunction with a foreign national in 2010? Have I had my septic tank replaced recently? Have I sold milk from my home? A lof of the time, I start reading some questions, and when they stop making any sense, I just answer no and hope I’m not missing something important. I’m also daunted by the fact that if I ever do get to the point where I’m an established member of our economic order (due to house ownership, and maybe participation in an S-corp, etc. etc.) I will have so much paperwork to keep track of that it will be the most obvious decision in the world to hire an accountant, dump documents on them with a forklift, and let them sort through the mess that will undoubtedly be my life.

The most interesting thing though is that Massachusetts apparently lets you take $1 of your tax bill and send it to a public election financing fund. Most people who file by hand probably miss this or desire to skip it. But if you’re doing your taxes electronically, then its kind of a no-brainer I think, since checking the box helps different candidates run in Massachusetts without costing me a cent. This must raise quite a bit of revenue.

The thing though that puzzles me though is that it’s even voluntary at all. Why doesn’t Mass just take $1 dollar off everyone’s tax bill and then give that to the fund? I guess is that its controversial, so that there could be more support for this law if it was specifically flagged as a voluntary contribution that people could avoid. Next thing I wonder then is why this of all things would be controversial. Who even monitors laws like this (as opposed to the usual-suspects for stirring up controversy like sex-education laws, or things involving minorities) and who finds this very controversial. I mean, I guarantee some of the public money in massachusetts goes to way more bizarre and worthless things than this, which seems democratically valuable and pretty important.

A more philosophical question: why couldn’t taxes be made more flexible in general.

Imagine: your taxes are calculated as they are now. WHAT YOU OWE is not up to you, but WHAT you fund is. So that I could move my money away from the arts and theaters and almost exclusively into roads and education (or I might not give anything to roads, since my untutored belief is that public works money disappears into a black hole — instead I would invest in a futurama-like system of transportation tubes). Other people might choose to fund sports arenas or Charles river clean-up projects.

Would this be just like a referendum about funding then? Would important services get shortchanged because people don’t know about the good they do and so refuse to fund them? The answer to these questions is yes, and so politicians get to tell us what to fund as well as how much to pay, but the cost is that politicians get to tell us what to fund — which can often turn out to result in a lot of waste.

PS: this post is a little unclear I think compared to past posts, but I had to write this in a VERY short amount of time so I just flew over the ideas.

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