Comment: Response to request for comments by the Federal Tax Reform Panel on Feb. 16, 2005 Vass, North Carolina 28394 910-245-2291 March 7, 2005 Individual Submission to Federal Tax Reform Panel I appreciate the opportunity to submit my comments to the panel. I’ll get to the point. The current tax system is unnecessarily complicated! An individual should be able to confidently prepare their own taxes if they are armed with only an eighth grade education and 15 minutes worth of time. I have six years of college education behind me, I utilize tax preparation software, and I still spent five to six hours this year preparing my taxes. That is six hours that I could have spent with my family, or even spent working to generate more income. I submit to the panel that the tax code should not be so complicated and intimidating, that it spawns an entire industry based on preparing taxes for the average American. No one should feel so “scared” of doing their own taxes that they feel they have to pay a professional to prepare them. Not only is the current tax system complicated, it is unfair. If “All men are created equal,” why does one man pay a higher percentage of his income in federal income tax than does his neighbor? Why should I have to pay a higher percentage than a schoolteacher down the street? Why should the doctor down the street pay a higher tax rate Jim Beaty than I do? Once you get over the poverty line, all Americans should be taxed at the same rate. In addition to different tax rates being applied to different individuals, I have always been appalled at the way the tax code handles credits and deductions. As stated earlier, I attended college for six years, as did my wife. Together, we incurred student loans of over $100,000. Each year we have about $4,000 in student loan interest. Because our incomes exceed a magic number, we never get to deduct student loan interest from our income taxes. If the tax code is going to allow for a certain credit or deduction, then let all Americans utilize it. Don’t phase it out based on income. In essence the code punishes individuals who work hard to achieve larger incomes. Next, I’d like to share how the tax code effects personal decisions my wife and I make in our home. I’ll retell the same story I wrote to Senator Richard Burr a few months back. My wife and I make about $170,000 per year. As a hobby, my wife sells AVON on the side. Not because she needs the extra money, but because it gives her a good social outlet to mingle with other women. She also gets a great amount of enjoyment strutting around the house Jim Beaty telling me that she is a “successful business owner”. Over the years, her client base has grown, and last year she made enough money to trigger AVON sending her a 1099-MISC. What a nightmare this was. We had to reconstruct a year’s worth of invoices. I had to educate myself on what deductions she could legally take. About 20 hours worth of time was spent on this aspect of our taxes alone. After we had finished our taxes for that year, I had to plead with her, “DO NOT SELL ENOUGH AVON TO TRIGGER THAT FORM AGAIN”. I’ll ask the panel the same question I asked Senator Burr: Has America gotten to the point where her citizens should avoid activities that instill pride and bolster self-confidence for fear of tax consequences? I’ll leave the panel with only two goals to keep in mind when making recommendations to President Bush on how best to reform the tax code: • Make the tax code FAIR. A single tax rate for all Americans. A deduction for one is a deduction for all. No exceptions. • Make the tax code SIMPLE At this point, I’d like to thank the panel for allowing me to express my comments. Jim Beaty Sincerely, Jim Beaty Vass, North Carolina 910-245-2291 |