And so it begins

Spending a beautiful Friday afternoon with four kids running around (only two are mine), I took a moment to check Twitter chatter, and was excited to read (via @taxtweet) "Obama tax reform panel report released." (I realize I am odd to find the news exciting, but accepted my oddity years ago.)

The report arrives 8 months past the original deadline.

Kay Bell and Professor Nellen give us their first impressions, Professor Nellen writing: "This 126 page report does not include recommendations but instead in an analysis of a variety of proposals that have been made by various groups in the past with a brief explanation of advantages and disadvantages of each. So, really nothing new."

I think Professor Nellen is correct that this report doesn't present anything new. I do hope it gets some kind of political attention, and that it gets dialogue started. The preface notes that: "The Board gathered information from business leaders, policy makers, academics, individual citizens, labor leaders, and many others."

There are a lot of smart people with a lot of good ideas, and I'm glad we're at least attempting to gather the ideas in one place.

The introduction to the summary of alternatives for simplification includes this comment: "The complexity of the tax code is partly the result of the fact that new provisions have been added one at a time to achieve a particular policy goal, but with inadequate attention to how they interact with existing provisions."

I liken the tax system to a medical patient who is prescribed a new medication for each new symptom, without being effectively treated as a whole.

Some wish the panel had been allowed to consider broader reform. "We received many suggestions for broad tax reform, and some members of the PERAB believe that such reform will be an essential component of a strategy to reduce the long-term deficit of the federal government. But consistent with our limited mandate, we did not evaluate competing proposals for overarching tax reform in this report."

As much as I believe broad reform is needed, I'm starting to accept the hard reality that people struggle with big change. (I enjoy reading some of the research on change.) If the alternatives are to start with small change or to debate broad reform that doesn't lead to any reform, I'll take the small change, with the hope of building change momentum.

One big change that is listed as an alternative (on page 50) I support wholeheartedly: Repeal the AMT!

I look forward to reading others' thoughts on the report...

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Caution is the better part of valor... sometimes

Back in Ohio, we used to pass a street sign each week that said: "Right turn with caution." (Which was probably safer than "Right turn with abandon.")

My impression is that accountants are a cautious bunch. We like to look before we leap. When we learn in the news of a disaster that could have been avoided with more safeguards, we point to it and say: "See, that's why we need to be careful."

For example, Key Bell shares a report of Donald Bren's $1.4 million federal tax refund stolen by an ID thief. She writes: "While Bren and others at his rarefied income level are an identity thief's dream target, any of us can become victims."

Kay is (as usual) absolutely correct.

David McClure recently wrote on CPATechViews:

I have dropped out of FaceBook, don’t Twitter or Tweet, and refuse to give real information to any web site. And I wipe my cookies and tracker caches every single night. Because I do not want to let advertisers know who I am, where I am or what I am thinking about. That may seem extreme, but you should consider it as well. I’m a pretty stable guy, not a privacy lunatic by any means, but I am scared.

And so as with all things in life, we find ourselves dealing with the gray area. I understand McClure's position, and at the same time am not taking the same position. Perhaps I am setting myself up for trouble by staying active online. But I keep thinking of the Spanish proverb quoted in one of my favorite movies ("Strictly Ballroom"):

"A life lived in fear is a life half lived."

I'm not about to go sky diving or anything, but I'll stick around on Twitter, and hopefully not have my tax refund stolen. (To any ID thieves out there: there's not a whole lot of money to be gained from swiping my name.)

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