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Senator Obama promises a 5-minute tax return
I finished and filed my taxes late last night. Because I sold some securities in 2007, own rental property, and generated self-employment income from this site, my tax returns are a lot of fun. I think even the Turbo Tax software I was using was straining to churn out my returns. And all of this reminded me of a tax proposal Senator Obama has made.
If elected, he promises to simplify tax filings for middle class Americans so that millions can prepare their returns in less than 5 minutes. According to Senator Obama’s website, experts estimate that his proposal will save Americans up to 200 million total hours of work and aggravation and up to $2 billion in tax preparer fees. Senator Obama has not identified who these experts are or the basis for their opinions, at least not that I can find.
And this leads us to the first ever poll on The Dough Roller. So what do you think. . .
{ 11 comments… read them below or add one }
I think its definitely possible. I used to file mine by phone in that amount of time back when I was a student 10 years ago.
But because you “sold some securities in 2007, own rental property, and generated self-employment income from this site”, I doubt it will become much easier for you to file no matter how many experts they hire.
The only way I see it being this simple is removing tax on income and placing it on sales-only (see Mike Huckaby). Then you wouldn’t need a form at all.
It’s funny that these presidential candidates actually think they have power to accomplish things like this. I suppose that line will win him an extra vote or two.
I have to laugh at all those who say they will simplify the income tax system. As long as we have any tax on income, we will have a complicated income tax system. Why? Because in the modern world income is sometimes hard to define, and therefore hard to evaluate how to tax. Over-simplification of the income tax system will make it easy to game the system and pay far lower taxes than our current system.
Another point to consider is the figure of $2 billion savings! bandied about. Sounds like a lot, doesn’t it? Do you know how much we spend on Easter candy every year? About $2 billion! Will we be able to invest our savings in tax preparation by doubling our spring candy consumption?
Could a 5-minute return be possible? Yes, but I think only for people who have nothing to declare and go with standard deductions. And some of those people could be missing out by not going deeper into the return rules.
Line 1: List your income
Line 2: Send it to me
THAT’S the five minute tax return I fear from the Senator.
The Fraser Institute, a conservative think-tank in Vancouver, Canada, has a proposal for a one-page tax return. It couples a higher personal standard exemption with an elimination of pretty much every other exclusion or deduction out there and a single tax rate. I think it makes a lot of sense - the higher personal exemption would eliminate income taxes on the lowest income earners, eliminating deductions for everything under the sun would fairly tax the rest, and simplifying the process would allow ordinary people to file them on their own. I think the only downside is that a lot of tax accountants might end up looking for other work (sell your H&R Block shares now). Look it up.
Ron, it is clear that both Senators Obama and Clinton would raise taxes substantially. My concern is that they are positioning their tax increases as only hitting the rich. Even if one were to assume that’s true, they are then spending the increased taxes on massive social programs when we have a serious pending financial crisis in social security and medicare.
Marty, I think that’s a great idea, too. Unfortunately, many great ideas get left on the chamber floor in the Capital.
Dude has got to be crazy 5 minutes? He must be referring to everyone being unemployed and just putting that on the form for the year. It is hard to do anything in 5 minutes.
And then an entire industry goes down - not to mention the thousands of IRS employees who would be displaced (butthe government doesn’t really give pink slips very often, they would find them other work somewhere else, or just not renew positions when people retire).
It sounds like a dream, but I doubt we see it as reality any time soon.