Will Congress change the tax laws? When will they send the proposed changes to the president? Will he sign it and have the laws changed?
I don’t know, but perhaps you shouldn’t hold your breath waiting for it to happen. Of course the tax laws are too complicated and it’s too expensive to prepare the returns.
I think the main problem is various special provisions have been added to the tax laws.
Until the members of Congress act like Americans, not Democrats or Republicans, it’s not likely they will work together to really simplify our tax laws. Some of the members of Congress do have the best interests of our nation and our people at heart. However, they’re subject to the pressures of their party.
The provisions of “A Better Way” were published over a year ago. It suggested many special deductions and credits be canceled and taken out of the law. The problem is for each item there are many who want that special benefit. For example, interest on a home mortgage is currently limited to the interest on up to $1 million of debt plus $100,000 owed for a home equity line of credit. That was done some years ago. Maybe the home builders, construction industry, real estate brokers and lenders want to keep or expand that benefit. They may urge the members of Congress to vote for that benefit to be kept in the law or even expanded.
The $250 deduction for unreimbursed educational expenses for teachers, instructors, counselors and principals sounds like a wonderful idea. The problem is the tax saved is only $62.50 if the other income causes a 25 percent tax rate. Our teachers should be honored and paid more on a professional level like other countries do. To give them a special deduction of maybe $62 a year is not enough.
But the compliance with the law to get the $250 deduction is a bother and a complication that doesn’t really do much good.
To have regular corporation profits taxed and when some of those profits are paid to the stockholders as dividends, they’re being subject to another tax seems wrong to me. Yes, qualified dividends (paid from profits of an operating business) are only taxed at 15 percent, but it seems like double taxation. Since our corporation income tax rates are much higher than the rates in most countries, is it any surprise many corporations have moved all or part of their business to other countries?
Here’s hoping the laws are really changed for the better and soon! Someone said it should be required for members of Congress to prepare their own tax returns in a glass booth. Maybe then they would see the need for doing away with many special benefits and complications?
Did you hear? “A person who can’t lead and won’t follow makes a dandy roadblock,” by Author Unknown.
John Bullis is a certified public accountant, personal financial specialist and certified senior adviser who has served Carson City for 45 years.
He is founder emeritus of Bullis and Company CPAs.