Skip to main content

Tax Time

In honor of tax day (which is not officially for two more days), I thought I'd make a brief comment on the complexity of the U.S. tax system. Since I've earned enough money to receive a W-2, I've always done my own taxes. At first I used the IRS's 1040-EZ form, but I've since graduated to the standard 1040 form and I do my taxes online. I'm still amazed how many people, even folks with financial situations no more complex than my own, that spend a non-negligible amount of money to have someone else prepare their taxes.

(from kenteegardin on Flickr)

This is what makes the idea of tax reform is so compelling, in theory anyway. Instead of having to go through pages and pages of questions asking really detailed and personal questions about your life situation, or paying someone your hard earned money to do the paperwork, why can't there just be a single form where you type in my income, withholdings, and be done with it?

Alan D. Viard says tax reform won't happen because it's not a top priority for the voting public. Instead, they're more interested in tax cuts, even within the complex framework. I think that's mostly correct.

From another perspective, tax reform would mean giving up some control over certain aspects of the economy. Like it or not, taxes can be used to drive consumer behavior.

The mortgage interest deduction is a classic example of a tax incentive designed for a very specific purpose: get people to buy homes. Society thinks homeownership is good, so government strives to get more people to buy homes. There are a lot of people who have a strong interest in maintaining the mortgage deduction: homeowners, home builders, contractors, Realtors, etc. So even if tax reform generally isn't a top priority for anyone, it can be easily spun as a tax hike for anyone receiving this deduction.

And this is just one of many examples. I benefited greatly this tax year by the student loan interest deduction. It required keeping track of more documents, and spending more time filling out the 1040, but it was worth it.

So sure, everyone is for tax reform, until you put a price tag on it. Calling tax reform a tax hike is all it will really take to kill it politically.


Popular posts from this blog

In Praise of Southwest's 'C' Boarding Group

A few weeks ago I saw a tweet from someone complaining that their Southwest Airlines boarding pass had been assigned A20 (meaning they would be at least one of the first twenty passengers to board the plane). Apparently this person though they should have been assigned a higher number, less their flight experience be considerably spoiled.

Despite the complaints, Southwest has resisted demands to assign seats on its flights, a decision which I personally applaud. I'll admit that I was skeptical when they rolled out the newest boarding procedure, assigning both boarding groups and a line number; but in hindsight it seems like one of the best operational decisions they've ever made. If nothing else, it effectively eliminated the infamous "cattle call" whereby fliers were getting to airports hours in advance and sitting in line on the floor as if they were waiting for the midnight showing of the new Star Wars movie.

When I was an intern at Southwest Airlines last winter, I…

So You Want to be a Southwest Airlines Intern?

My personal website must have pretty decent SEO - because in the past year, I've received about two dozen emails from aspiring Southwest Airlines interns looking to draw on my experience in search of their own dream internship. In the past two weeks alone a few new emails have already started rolling in...

(from flickr user San Diego Shooter)

If you've found your way here, you might be hoping for the silver bullet; a secret tip that will propel you above the competition. Unfortunately, I do not know any inside secrets. I can only share my experience as an internship candidate about two years ago and, rather than responding individually to future emails I anticipate to receive, I hope that potential interns will find the information posted here valuable.

Understand: Southwest Airlines is a very unique company. The corporate culture at Southwest is truly unlike that of nearly every other company. But you probably already knew that, since it now seems mandatory for every management,…

Commuting Meets Technology

I'm finally out of the dark ages. I got an Android smartphone over the weekend and have since been in the process of exploring the Android apps market.  One thing I've immediately noticed is the really wide range of usefulness in the apps. For example, the WeatherBug app is fantastic. It automatically determines your location and gives you exact conditions for that location. On the other end of the spectrum, Google's Goggles app is supposed to be a type of 'visual search' where you snap of photo of something and Google searches for it. In each of my attempts to use it, the app hasn't returned any search results. I even took a photo of a bottle of Pepsi (figuring it as a common houseful item) and got nothing.

Somewhere in the middle is this app called Waze. Have a look at their 'guided tour':

Some people might look at it and comment on the amazing evolution of technology or on the incredible value of social networks. To me, Waze says something important ab…