Economic Stimulus Package: Not The Massive Bamboozling Initially Feared... Sort've

It was speculated here that the Economic Stimulus Bill (which congressed passed on to the White House on Thursday by a vote of 380 to 34) may in fact only be an advance on 2008 tax year refunds. In other words, taxpayers would be given a loan on next year's refunds that they hadn't asked for in first place.

While I certainly wouldn't put it passed our government to do something so extraordinarily heinous as to dump $152 billion dollars of national debt directly into the laps of low-middle income families, this doesn't appear to be the case.

The payments are actually going to be advances on a one time credit against 2008 income tax. In other words, they are going to send you a check now, for a new credit that will be applied against 2008 income tax. And since you will have already received the credit when it comes time to file your 2008 tax return, it will be as if the credit didn't exist. Your 2008 tax return will not be affected (besides aesthetically) for the credit.

It will look something like this:

Tax before credit - 1,000
Less: stimulus package credit - (600)
Add: credit already received - 600
--------
Tax after credit - 1,000

Having said that, don't be a clown; put whatever money you get from the government away for retirement.

Understatement: It's Getting Out Of Hand

Before you label me as a Fair Tax nutcase, let me state that I understand the merit, and perhaps necessity, of a graduated tax structure and that the essential purpose of the IRS and IRC is to provide for an equitable distribution of the burden. But jesus, there's got to be a better solution.

Stats:

• $10.9 Billion - That's the 2008 budget for the Internal Revenue Service.
  
  
• $20 Billion - That is the revenue earned by the four largest (the big four) accounting firms from tax services alone for their 2007 fiscal years.
  
  
• 3,000 - That is a conservative estimate of the number of CPA firms in the United States. (Depending on your source, that number may be significantly higher.)

Do the math with me. If my calculations are correct, and I believe they are, we spend approximately an assload of money each year trying to arrive at taxable income. And it is getting worse:

• 10.8% - That is the average growth rate of the top 100 public accounting firms for FYE 2007 (down from 16.5% in 2006).

But the real atrocity here is the millions of man-hours wasted each year in this pointless endeavor.

The Internal Revenue Code is absurdly complex with each of the 9,833 sections of the Code requiring guidance, clarification and interpretation by countless rulings, regulations and publications. This 87 page word doc is one Treasury Regulation providing interpretation for one section of the Internal Revenue Code. Scroll through that and see if it doesn't make you want to ball like a crazed Britney Spears fan (leave her alone!)

So CPA's are intelligent. It's a near certainty since the certification exam is so difficult. One study of people who have taken both the CPA exam and the Bar exam indicates that participants consider the CPA exam to be slightly more difficult than the Bar exam. Sure, you're going to have a few numb skulls slip through the cracks an become certified. The point is, however, that taxation is not only an astronomical waste of time. It is an astronomical waste of intelligent time.

Think about it; all that money and all those hours essentially crammed down an enormous toilet. Imagine what could be accomplished if all that time and effort was focused on a something slightly more productive... like masturbation, for example.

In the spirit of lending a shred of credibility to this article, I'd like to point out that I work in the tax department of a large public accounting firm. I stand to suffer considerable financial difficulty in the event that we come to our senses. But then again, what are the chances of that?