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How The Current Tax Code Harms The Lower Class

January 25th, 2009

It’s that time of the year again. The time of year where all of our hearts can be warmed by the knowledge that some of our hard earned dollars must be sacrificed to support the people who spend absurd amounts of that money on everything from lavish lavatories to bailouts for industries that are mismanaged and under performing. Thats right, it’s Tax Season!

Taxes Are Hard.

As I went through my taxes this year determining exactly which credits and deductions I qualified for,  which deductions and credits I could claim from previous years, how much money I had spent on various items needed for work and school I had a thought, “This is Hard!”. The complicated system for determining an individuals obligation to the government has outgrown it’s usefulness. Originally, all of the deductions credits and special rules were designed to help people, more often than not they were designed to help the lower class. But what happens when the tax code designed to help people grows into a 20 volume 13,458 page monolith? It turns on the people it was designed to help.

The problem with the way taxes are done in America is that it’s hard. I said this once but I want to really drive it home. I might be able to do it no problem - I’m college educated and I still need TurboTax to help out - but what about some other folks? I’ve had many people ask for my help doing their taxes. They become frustrated because they don’t understand the complicated instructions - or maybe they just aren’t good with numbers. “Tell them to use TurboTax, that’s what you use”, I know you’re thinking it and it’s absolutely true - I do tell them to use TurboTax but not everyone knows me. Moreover, TurboTax won’t help everyone. A lot of these people may need to itemize their deductions and that version of TurboTax is gonna cost them 29.99$. A small price to pay for saving 1000$ on your taxes but how many people can’t even spare the 30$.

Aside from the complicated mess that is the U.S. tax code there are the ‘Tax Preparers’ that fleece unsuspecting tax payers. They offer free tax preparation services and agree to give you a special “Debit Card” with you tax return on it early (minus their fee of course) and your tax return goes to them. Operations like this are little better than the crooks at check advance locations. It’s a shame that so many people have to pay someone to make sure they are fulfilling their civic duties.

Even Warren Buffett Is Appalled.

This brings me to the last problem. The sliding tax bracket isn’t working. When Warren Buffett, and most other people in the top 10% of earners are paying less taxes than so many others the system isn’t working. If you have the money to hire someone that understands all 20 volumes of the tax code, or you are educated enough to do it yourself, you have an advantage when it comes to paying taxes over tax payers who are less fortunate. Especially considering that only 35% of these free tax preparation services get it right. The solution is easy - The Fair Tax.

Make Taxes Simple.

The Fair Tax would remove the income tax all together and instead tax the money each person spends through an increased sales tax. The government will still get the same, if not more, tax dollars than before and people who are struggling to save money for a rainy day don’t have to pay taxes on their earned dollars and instead can keep more of their money to use how they see fit. Expect to hear more from us about why GeekPolitics supports the fair tax.
Creative Commons License photo credit: The Consumerist

  1. January 27th, 2009 at 09:20 | #1

    The Fair Tax isn’t fair; it’s regressive. The Flat Tax is fair.

  2. February 1st, 2009 at 11:06 | #2

    When you have to pay to have someone do your taxes, that, also, does not do the middle and lower classes any favors!

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