Subject: comments on the current tax system Comment: I am submitting my comments on the current tax system, from the view of a sole practitioner CPA with 27 years practice in the real world helping individuals and small businesses try to make some sense of our current system. See attached word file. Eddie Aune, CPA Oxford, MS Comments on current income tax system: 1) Unnecessary complexity. a) There are several deduction that taxpayers lose as their income rises. Examples are tuition and fees, student loan interest, education savings bond interest exclusion, traditional IRA deduction for active participation in a retirement plan, Roth IRA contribution, retirement savings credit, child tax credit, itemized deductions, personal exemptions. Why is the income threshold which triggers the loss of the deduction different for each of these. Can’t we have just one income level for each filing status? b) We have a tax deduction and two tax credits for college tuition. Why do we need three alternatives, just pick one. c) Have you tried to figure depreciation on assets used in a business? There is a ridiculous number of class lives, depreciation methods for both regular and alternative tax depreciation. This could be greatly simplified. d) Too many accounting methods. Manipulation of accrual methods, inventory methods, etc. Simple cash method would work for most smaller companies and should be mandatory, not optional for those small businesses. 2) Unfairness: a) Taxation of social security benefits. This is grossly immoral ( changing the taxation of benefits for taxpayers who paid into the system for years and years), and should be illegal. b) Earned income tax credit. Huge fraud in this area by taxpayers using the wrong filing status ( head of household while still married) and allowing relatives to use children like commodities to qualify for the credit. Most taxpayers with lower income do not benefit from claiming more than two children on their tax returns, and therefore allow the other parent, grandparent, etc to claim any other child for which they would not receive a tax benefit. Eddie Aune, CPA Oxford, MS 662-281-8900 eddie@aunecpa.com |