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Friday, November 03, 2017

Am I Out of A Job?

Yesterday, lawmakers promised that after their tax reform, you could do your tax returns on a postcard.   

I teach a huge 4-credit federal income tax course every year—should I reduce the course to 1-credit?  Or, should I still teach it in 4-credits, but show movies to fill class time?  I wouldn’t mind seeing La La Land again.  Haven’t seen It yet.  Maybe Victoria and Abdul.

However, I’m not going to take your movie suggestions yet.  The House bill is already filled with enough compromises that I don’t foresee much simplification.  And, the compromises are just starting.

The AARP is already blasting the decision to do away with the medical expense deduction.  The powerful home builders and realtors are upset about the cap on the mortgage interest deduction and the $10,000 limit on the deductibility of property taxes.  The most populous states are angry about the non-deductibility of state income taxes.

Invariably, the tax code picks winners and losers.  But, I don’t expect to be on the losing side, put out of a job because of the simplicity of the tax code.  At least, not quite yet.  And later, there's tenure.  

Posted by Margaret Ryznar on November 3, 2017 at 02:39 AM | Permalink

Comments

I don't think taxes will ever be that simple. Promises in the past to simplify the tax code never came to fruition. While there may be simplification, it'll never go that simple. Plus, estate planning attorneys will still figure out ways to help their clients pay less in taxes and then the complexities will reappear as the IRS combats those.

Posted by: Alex | Nov 3, 2017 3:28:41 PM

This bill is actually a full employment program for the tax avoidance industry, which (on the bright side) may employ some of your students after they graduate. Frankly, you could probably add a new 1-credit unit on top of your existing four just to cover the exciting and complex new opportunities involved in recharacterizing personal income as pass-through business income to take advantage of the new, egregious pass-through loophole this bill introduces. It involves corporate law, tax law, contract, and interesting questions of professional responsibility.

I expect that the massive new complexity resulting from that one change alone will be enough to send many accountants' children to college -- and more than a few lawyers' children too. And it's not the only complexity-enhancer in this so-called "simplifying" bill. I guess it all depends what counts as "simplification." If you think the most complex thing in the tax code is the number of brackets, then this bill is the solution to your problem!

Posted by: Joey | Nov 3, 2017 4:25:49 PM

I think they will simplify the tax code the way they simplified racial discrimination in Bakke.

Posted by: Simple and Clean criminals | Nov 4, 2017 4:21:09 PM

Good to know that it's just me who feels this way. Indeed, I do think there's enough nuance in the bill to even add 1 credit to the course, but then probably students would be scared away!

Posted by: Margaret Ryznar | Nov 5, 2017 6:49:16 PM

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