Tax Myths

Here is an part of an article from Tribune Media Services.

The Tax Increase Prevention and Reconciliation Act, signed into law in May, aims to raise $2.1 billion over the next 10 years with a change in the so-called kiddie tax.

The change is a relatively simple one, noted Mark Luscombe, principal tax analyst with CCH Inc. It broadens the pool of youths who could be subject to this tax by raising the cutoff age to 18 from 14, retroactive to the beginning of 2006.

It sounds innocuous enough, but tax experts say it lets loose a flood of complexities.

''It's an accounting nightmare,'' said Patty O'Connell, a partner at the Santa Monica, Calif., tax law and accounting firm Holthouse Carlin & Van Trigt.

That's a crock Ms. O'Connell. No added complexities to the tax code is a nightmare for an accountant. Rather its what CPA firms, tax accountants and tax preperation firms want. They want the tax code complex, for the industry they are part of earns billions in fees every year from people who either want to hide their money from taxes or can't do their own taxes because they are too complex.

True tax simplification is unlikely ever to happen because- One the above people will lobby against it for they have too much to lose and secondly politicians use tax breaks for everything from social to political reasons.

A flat tax would be wonderful, I bet it will never happen in my lifetime.

Disclosure note- TFM earns money doing people's taxes every year.

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