I heard on television the other day a message along the lines of, "Get the free, Federal edition of TurboTax at TurboTax.com." I thought, "Wow, free?!" So today I hopped on over to TurboTax.com, which redirected to TurboTax.intuit.com, and I saw that the free edition was pretty much bare bones. It provides "Free federal tax preparation for 1040EZ and simple returns," as well as "Free eFile."
Makes sense, right? Offer the bare minimum for free, and when things get more complex, more demanding of "The Box" as one anti-TurboTax commercial puts it, charge more for the software.
A few weeks ago I was intoxicated with the idea of the proposed "Fair Tax," under which new goods and services will be taxed 23%, and that's it. No other taxes to worry about! Just a simple, straightforward sales tax on new stuff. As Wikipedia puts it, "The proposal also calls for a monthly payment to all households of citizens and legal resident aliens (based on family size) as an advance rebate of tax on purchases up to the poverty level." Sounds fantastic.
What I like most about the Fair Tax idea is its potential to save the country the administrative costs that come with putting so much time-consuming effort into reaching the bottom line in a system that is notoriously complex. The simplicity of the Fair Tax would significantly "lighten the load," so to speak.
Still, some say people will find ways around it, ways to "beat the system," and force the little guy to pay more than his fair share of taxes. But isn't that happening already? I think using the argument that the negatives of the current tax system might intrude on the proposed new, simpler system isn't all that compelling.
But here's something else to consider. If we did abolish the current tax code in favor of a simple sales tax, there'd be no need for the whole "Let me do your taxes" industry! TurboTax would become obsolete! I'm sure if that were to happen, there would be other areas that could benefit from the newly freed-up resources of the TurboTax organization.
As it stands now, the tax system just seems like a game we're all playing, and it's overly complex, and it isn't any fun.If you enjoyed this post, I'd be delighted to have you as a subscriber to my RSS feed.