Just to make a point

I wonder if there was a time when tax law wasn't used as a policy tool. If so, it was most definitely before my time.

TaxProf, Joe Kristan, and Kay Bell, provide coverage on the proposed "pay as you fight" war surtax.

I'm all for fiscal responsibility, including making sure we can actually afford our expenditures before we commit to them. (Novel concept, I know.) But this is not the way to go about achieving that. We didn't add a surtax for TARP, stimulus checks, the blasted "Making Word Pay" credit, or any number of other spending bills.

The purpose of this bill is to make a point, and I would rather not spend our limited government resources going through the motions of a bill just to make a point. I'd hope we have another means of engaging in debate about the issues, and that we would stop using taxes as a primary tool for affecting public policy.

Well, it's a nice dream anyway.

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Maybe next year...

TaxVox reports that the results of the President's Economic Recovery Advisory Board are likely to be less than stellar. Included in the post is the following observation:

From its earliest days, the group was forced to work under impossible constraints. Chief among them: Obama’s insistence that no one earning less than $250,000 should pay higher taxes. Exempting more than 95 percent of families and individuals from tax hikes of any kind essentially shut the door on any serious discussion of reform, which inevitably creates winners and, yes, losers.

This, sadly, is similar to my observations on the matter. It looks like we won't see any significant reform in the near future. No end in sight to massive AMT, endless credits, and a brand new Schedule L, too! Oh goody.

(Hat tip: Tax Update's Joe Kristan)

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Who can you trust?

The world is a scary place, and Congress makes it even scarier for taxpayers with the insanity called the tax code.

And of course, there is much more to life than tax. (Many are likely shocked to hear me say it.) To function with so much variety in life, our modern economy relies on specialization of labor, so that different people become educated and trained in different things, and we trade.

Each day, we decide what to trade for. Perhaps the most important decisions we make are related to choosing service providers: doctors, dentists, lawyers, accountants, and so forth. These can also be the most challenging decisions because human beings are much more variable and unpredictable than a simple widget.

When you choose a service provider, you do your best to find the right person, and hope you choose wisely.

The more time I spend in our profession, the more I come to realize that clients are looking for someone to trust. That's why referrals are usually the most successful way to generate new business. Stacie Clifford Kitts has a good post on the topic of referrals.

Of course, the biggest hurdle most people face is that they cannot afford the best service providers. And some people who can afford them are just too cheap. And so, for everything from medicine to tax, people turn to the Internet.

Robert Flach provides and interesting discussion on the issue of tax advice online in his post: Who can you believe? Jim Maule also provides a great discussion in Tax Illiteracy as a Threat.

Alas, I do not have the answer for how to ensure people get access to credible tax information. Robert provides some good tips for people to use in evaluating whether a person espousing tax advice is trustworthy. If I didn't need to earn a living by charging for the value of my services, I could spend all of my time combating tax illiteracy. Instead, I'll need to settle for doing what I can to educate in my own communities while working around "my day job."

I do hope that people can start to do a better job of simply using good judgment. It's amazing how much trouble can be avoided by making good decisions.

In a barely related note, often when I think about choosing wisely or poorly, I remember the line at the end of this gruesome scene from Indiana Jones and the Last Crusade. "He chose poorly." Gotta love the understatement.

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Do something

Several years ago, Congress passed a law that completely eliminated the estate tax starting January 1, 2010. I remember thinking: "Oh, but that will never happen. Congress will act way before then."

So young. So naive.

Regarding this and many areas of tax law, I just want to shout: "Do something!" In the words of Seth Godin:

Make a decision. It doesn't have to be a wise decision or a perfect one. Just make one. In fact, make several. Make more decisions could be your three word mantra. No decision is a decision as well, the decision not to decide. Not deciding is usually the wrong decision. If you are the go-to person, the one who can decide, you'll make more of a difference. It doesn't matter so much that you're right, it matters that you decided. Of course it's risky and painful. That's why it's a rare and valuable skill.

Sadly, it appears Congress is not made up of people with this rare and valuable skill. And it doesn't look like the current administration is in a big rush either. Kay Bell recently wrote about Treasury Secretary Timothy Geithner's comments at an economic conference last week in New York City:

Asked about the prospects for tax reform, Sheppard reports that Geithner dodged the question and indicated that it would be far down the line. Economic growth and public confidence about the economy's future take precedence, he said, followed by deficit reduction, which would require tough political choices.

With those items before it on the policy to-do list, it's probably safe to say that Obama's stab at tax reform is going to suffer the same sad fate as did Dubya's tax revamp effort.

We've got our work cut out for us. Still, I like to think that if we keep telling Congress to "Do something", we just might get somewhere... someday.

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