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A Good Idea

Neil the Ethical Werewolf at Ezra Klein came across the Edwards Tax Plan, which makes a lot of sense, is very easy to implement, would save the government and individuals money, and obviously can never be allowed. Edwards calls the plan Form 1.

Basically the IRS as all of the information needed to complete a Form 1040 for millions of people. It gets copies of W-2s, 1099s, etc., which is all most people use to fill out their tax return. Edwards wants the IRS to fill it out and send the completed form to people for them to review. If they agree the form is correct, they sign it and return it. The IRS form would be generated by a computer, and be both human and machine readable.

It wouldn’t help me, as not all of my clients are required to fill out a 1099, and my expenses vary a lot, but for millions of wage earners it makes a lot of sense.

The problem is that it will cut into profits of tax preparers, the “tax refund loan” business, and other hangers on in the income tax business.

Aside: People might be more aware of this proposal if two ladies hadn’t been chased out of their jobs by a rabid mob.

4 comments

1 Steve Bates { 04.16.07 at 9:43 pm }

The fact that so many GOPers try to use the complexity of the current tax system as a justification for a “flat tax” that would be grossly unjust to most people of low to middle income does not mean that there aren’t legitimate simplifications that could be legislated, simplifications that would help many of the very people a flat tax would penalize.

Edwards’s plan would of course not help me anymore than it would help you, and for the same reason, but it would do a world of good for most people who are not self-employed. That is why it must be stopped at all costs; just ask any GOPer. In particular, ask the people who swift-boated Melissa and Amanda.

The tax prep harpies that would be harmed are the H&R Blocks of the world. My accountant, whose firm includes all of four people, mostly does taxes for businesses; such a plan would likely do him no harm. That’s not to say he’d approve of Edwards’s proposal; we quickly learned years ago not to talk economic politics. 🙂

2 Bryan { 04.16.07 at 10:22 pm }

There are a lot of ways to simplify the tax code to make life better for everyone except those with special interest exemptions.

I would love not to keep all of the records I now store, and not to waste the time and money I spend on preparing my final tax payment of the year.

3 whig { 04.17.07 at 12:37 am }

I think most people dread tax preparation far more than the taxes themselves.

4 Bryan { 04.17.07 at 9:09 am }

Back in the days when I was a wage slave I did my taxes as soon as I received my W-2 because I was due a refund, but even people who are due refunds put it off because they didn’t want to deal with the paper work. The 1040-EZ was a “Great Leap Forward” for many of them.

People are afraid of the IRS, and afraid of screwing up the forms. Many have the belief that if their math is wrong they are going to jail, and they aren’t very good at math.

This is a great idea.