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The Real Obstacle to Tax Reform? Let’s Look in the Mirror

Self-reflectionIn one of the better teen movies of the '80s, "Better Off Dead," a paperboy ruthlessly stalks the main character in an intense pursuit of what he is owed, repeating, “I want my two dollars.”  

Johnny the paperboy is not alone, as the senators who proposed a blank slate approach to tax reform found out.  And of course, taxpayers want a lot more than two dollars.   I admit, I am one of those “what’s in it for me?” taxpayers but I am slowly coming around to a different philosophy. 

Earlier this year, I was considering signing up for a class that was rather expensive and went down the hall to ask a colleague to determine how I could deduct it as it was not directly related to my work.  Not if I could deduct it, mind you, but how. (One of the great things about working at the AICPA is the availability of great tax knowledge.) I have a pretty simple return since I am renting and do not have enough qualifying deductions to itemize.

She checked and shook her head no. (I am abbreviating here but that was the bottom line.)
 I sat there in disbelief.  “Are you sure?”
“Yes.”
 I asked again.  I must be able to get something, I thought.  It’s bad enough I don’t get to put anything on most of the lines of the 1040 so I am owed something, right?

The answer did not change, but there I sat.  I start to suspect that she is looking out the door to catch someone’s eye, anyone’s eye, to be rescued from my interrogation. I finally get up, conceding that the answer will not change, but remained in shock.  Not to mention a state of outrage. 

Fast forward a month or two later, I walk down the sidewalk to the subway and passed a man who sits at the corner of 13th and F Streets in downtown DC most afternoons and asks passersby, “Can anyone spare a penny?” He varies his routine occasionally by asking if someone could pick him up a caramel Frappuccino or some other treat.  I think, “I don’t even buy those for me, why would I buy one for him?”

Then it kind of hit me.  Maybe I’m not one to judge.  After all, I am the one expecting other taxpayers to pay for my personal development.  If I were to go to my neighbor John and ask him to chip in for a PhotoShop class, he’d think that was very strange, not to mention inappropriate.  And could you blame him?  The question is, should he as a taxpayer be treated any differently? 

Individual tax breaks help defray the costs of achieving important goals, such as paying for education or owning a home, but they also consume a large chunk of revenues. As our nation’s debt grows higher, we need to start asking the tough questions and perhaps letting go of a few of our “two dollars.”  Otherwise, what are we leaving behind? What can you afford to give up?

Author’s Note:  The AICPA has outlined recommendations to Congress to simplify the tax system in many ways, such as the consolidation of certain education tax provisions to ease compliance for taxpayers.  However, it generally does not take a position on elimination or adoption of any specific tax benefit.

Ann Marie Maloney, AICPA Staff

Self reflection image via Shutterstock

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