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The Code

October 7th, 2009 Leave a comment Go to comments

The Code
When I write of The Code, I am talking about the Department of the Treasury’s, Internal Revenue Service Tax Code. It’s the Bible/Quoran/Mahabarata of all tax accountants, the lodestone of our existence, the tome we grab and consult for “truth”.
Remember in the Pirates of the Caribbean, where Keith Richards ( as Cap’n Jack’s dad) is “The Keeper of the Code” ? He hauls out a dusty tome the size of the Greater New York Yellow Pages, labeled “The Codex”? Aye, matey, that’s The Code.
It would be funny if this musty accretion of laws going back to 1917 were indeed a lovely leather volume with impressed golden letters. It’s not. We pay yearly for access on a CD (or an online database) for The Code.
It’s cumbersome, antiquated, and unjust.
How many of you know lawyers? They study words. Not numbers, words. Logic, precedent, jurisdiction-wordy concepts like that. They generally cannot count. If you put a doc in front of a lawyer with any numbers (other than or and page numbers) they push it away faster than a pro bono case. Lawyers can compute fees from ten feet in dim light: otherwise not so much.
But do you realize that lawyers, i.e., the Ways & Means Committee of the United States Senate, write the Code? Yes, they write, and write, and write. They do not have to clarify or minimize before they pass new legislation. They add more words upon words, which Accountants have to interpret after it is passed and becomes law.
Why does this happen? Legislators write laws with the express purpose of raising revenue, affecting social policies and implementing programs and services they feel serve the public interest. We elect them based upon what we think they will do: what comes out is something else. The ‘something else’ is crafted by lobbyists to serve the interests of large corporations, and wealthy individuals to sneak complicated stuff into the legislation. Do you think I’m kidding? Read the actual legislation some times: I do.
The solution? Simplicity, not complexity. As a financial analyst I can tell you when something is complicated it is a.) because it was written by Committee/Idiot; or b.) someone is trying to make it complicated so you will either stop reading it, ask a lawyer what it means; and/ or c.) they are doing something sneaky. Like incredibly low capital gains rates, like no disclosure or taxes for Hedge Funds, like a corporate tax code that ships jobs abroad and allows/encourages corporations to repatriate heinous profits and offset them with fictional losses; like the Earned Income Credit for poor people, like Pollution Credits.
My Solution: Restructure the Code. Disallow multinational corporations shipping labor abroad: Estates and Trusts having no allowance for Net Operating Losses or Exemptions with the top rate at 40% from 35%, make all income subject to Social Security, apply means testing to Social Security payments ( no one having over 100,000 in Adjusted Gross Income gets anything from Social Security ),increase the Basic Standard deduction (for single people) from 5,450 to 9,000.,the Exemption from 3,500 to 5,000., allow long term capital losses against long term capital gains in the amount of 25,000 for the next 3 years, audit Schedule A Mortgage interest deductions and exclude interest attributable to things other than home improvements, and do not index Alternative Minimum Tax with inflation. That’s to start with.
Want to talk?

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