I kid you not!  “Hard-working families who pay their taxes shouldn’t have to pay tax preparers too. With ‘Form 1,’ there is only one thing you have to do – sign and return it.” — John Edwards. 

Is this idiot even familiar with what a 1040EZ form is?  The sad part about this is that there are  smart people that are trying to pass this off as a plan!  A  plan would require Edwards to streamline the tax system, not ease the paperwork for those that need to spend 20 minutes preparing their taxes…Take a look:

• Completing Tax Forms for Up to 50 Million Americans: For as many as 50 million Americans, the IRS gets all the information it needs to calculate their taxes from employers and financial institutions. Under Edwards’ plan, the IRS will calculate these taxpayers’ bill and mail them a completed return. Families would only need to do one thing with Form 1: sign and return it. Families with more information – such as charitable contributions, capital gains, or other more complex transactions – will not be able to use Form 1. Form 1 would save taxpayers an estimated 225 millions hours a year. [Goolsbee, 2006; Gale and Holtzblatt, 1997; Treasury, 2003; GAO, 1996]  
• Making Filing Easier for All Taxpayers: Each year, both taxpayers and the IRS get information returns from employers and financial institutions (on W-2 and 1099 forms) showing wages, interest and mortgage interest paid. Taxpayers who lose a piece of paper and do not correctly report their income faces audit, additional taxes, interest, and penalties. Under Edwards’ plan, the IRS will mail the information it has collected to taxpayers, eliminating the need to gather duplicative documents. The IRS will also provide a free interactive web site for all taxpayers that eliminates the need for data entry, calculators, and tax tables. Of course, families could also choose to continue calculating their taxes as they do today.  
• Helping Low-Income Workers: The Earned Income Tax Credit (EITC) lifts more than 4 million people in working families out of poverty every year. However, due to its complexity, as many as one out of four eligible families fail to receive it. By informing families of their eligibility for the credit, Form 1 will significantly increase the EITC participation rate. [CBPP, 2006; Brookings, 2006]  
• Taking on Special Interests: Form 1 could save families $2 billion in tax preparer fees, and the tax preparation industry has fought similar efforts. In California, one company spent over $500,000 in a failed effort to derail the successful ReadyReturn program. At the federal level, the IRS agreed with the tax software industry to limit free online filing to low-income taxpayers. Its barebones “Free File” program for low-income taxpayers has a history of hidden fees and bait-and-switch advertisements. [Goolsbee, 2006; L.A. Times, 5/5/2006 and 12/5/2006; Bankman, 2005; Cal. Franchise Tax Board, 2005; Accounting Today, 1/8/2007]

From The Hillary Spot:

Bruce notes:

Do the numbers: If only 10,000 taxpayers in CA took advantage of a similar plan in 2004, that would extrapolate to only 88-100 thousand taxpayers across the US (unless advertising and media exposure pushed up participation).  How many filers use form 1040EZ today?

Brian says that instead of taxpayers having an easier time, the country would be better off with better-informed taxpayers:

One: You never want the person making the rules and owed the money calculating your taxes. It seems logical to most but to other taxpayers, they may be under the impression that this simplification is the best way out. When in fact, the best way out is to become informed of the code and what deductions and credits you may be able to use so that you pay only what you are required to pay under Gregory v. Helvering.

 Two: Reported information is not always correct and if the IRS is the one telling you what you made and what your return should be, then that takes the onus off the to actually become informed and responsible for their taxes.

Andrew shot the proposal full of holes:

1) If you get one of these forms offering to calculate your taxes for you, and you sign it and send it back, does that make you immune from an audit? Whichever way you answer, you’re wrong.  Because if the form does not confer immunity, it’s going to get an awful lot of people very angry.  And if it does, it opens a whole can of worms.  See below.

2) If the form does come with an offer of immunity, the IRS has just told you everything they know about your income.  Which means that if you have a source of income they don’t know about, you have just learned that you can get away with not reporting it.

3) There will certainly have to be limits beyond which you can’t use this service. For example, form 1040-EZ excludes people with more than $1,500 in interest. There will thus be a great incentive to avoid behavior that might push one out of the pre-prepared tax return category.  As a simple example, would owning shares of stock kick one out of that category?  What about mutual funds? 

Insert from Jim: I’m pretty sure either of those would knock one out of the “simple” category.

4) If this program is successful, it will greatly increase the burden on people who don’t participate in it.  Every time the tax code becomes more complicated, Congress will argue that it doesn’t matter because the IRS figures out so many taxpayers’ taxes for them.

5) It will also increase pressure on businesses to report data to the IRS, so that they can improve the accuracy of their calculations.  How long do you think it will be before eBay is required to report every auction to the IRS?

6) There is an implicit assumption behind this program that it is a good thing to make taxes easier to file.  The conservative argument would seem to go in the other direction: Anything that hides any part of the burden of paying taxes is a bad thing.  For that matter, I think we should do away with payroll tax withholding.  Every taxpayer should be required to send in estimated taxes every quarter.  That way people won’t forget what they’re paying, as they do now.

Douglas made a similar point:

It is an efficient proposal, and if this a business I would say great.  This is not business, this the federal government taking our money.  Having been self-employed all my life, I have had to pay quarterly and then again on April 15. 

 

If everyone had their money for the year (or the quarter) and then had to return it to the Feds, there would be a lot more conservatives.  Its one thing to see a check stub that starts out (for example) at $2,000, then makes all kinds of deductions to a net of $1,350. And quite another to have that $650 in your hands to do with as you wish until April 15th. 

 

For that reason, I would prefer that the Fed not make it any easier or less painful to pay taxes for anyone.

John, one of those Hillary Spot readers in the mainstream media, notes:

50 million returns prepared by the IRS? And mailed out? And rechecked again? How many more IRS employees would that take, and how much would it cost? That’s one objection. Sure it would save people some trouble. But, as you point out, it would help those who need it least. Surely, if we have to have this ridiculous tax code, a small burden of shared sacrifice is the few minutes (not hours) it takes to fill out an EZ form. Particularly if you are going to get something back from the government in the form of the EITC. We’ve already  made sure the lower middle class pays no income tax, and that the working poor pay no income tax AND receive free money from the government. Now we want reduce their “burden” further by spending, probably, a few extra billion for new employees and technology. No thanks.

I like Ray’s attitude:

How sad it is that we have such a system that we have to rely on the “fox” to stock the hen house – much less watch it. I’ll do my own returns and check my own math, thank you very much. I won’t voluntarily turn over ANY tasks to the federal bureaucracy I can do for myself.

12 Responses to “Forget About Overhauling The Actual Tax Code, John Edwards Wants To Make Filing The Return Easier For The 1040EZ Filers!”

1. Fred Dawes
   April 16, 2007 - 02:23 AM on April 16th, 2007

   No Its not about that its about control over your money, the rats in washington don’t like the ideals of this country most would jump to get other ideals like from mexico city and moscow and read china that is what John Edwards would love just like the other’s who hate our freedoms.

   12 to 40 million here under the flags of other’s with the help from the system to do away with you!:evil:

2. PCD
   April 16, 2007 - 05:20 AM on April 16th, 2007

   Edwards’ real plan is just to confiscated EVERYTHING you make and have the government supply you with everything. Of Course reich Democrats will still have their wealth and luxury.

3. TedintheShed
   April 16, 2007 - 05:46 AM on April 16th, 2007

   Democrats + taxes = folks getting screwed

   They do liike to fund their pet projects…

4. PCD
   April 16, 2007 - 06:41 AM on April 16th, 2007

   Democrats Gone Wild, but where’s the film at 11?

   Again the lied, but then again who listened?

5. TedintheShed
   April 16, 2007 - 07:06 AM on April 16th, 2007

   One other comment- I filed my own taxes and used a form 1040. I used no computer program. It took me exactly 1 hour and 35 minutes. I was well organized, and kept track of my expendatures and deductions with a simple spread sheet.

   I don’t understand why folks stress so much.

6. Robert
   April 16, 2007 - 07:39 AM on April 16th, 2007

   Being a good Liberal and Democrite, Edwards should advocate the even simpler form that has been talked about for years now. The one that has only two sentences and one line for information entry:
   It says simply “How much money did you make last year?” and has a corresponding line for the taxpayer to enter a number. The next instruction says “Send it in!”.

   With free Hillarycare, subsidized housing, food coupons and other bennies, this would indeed be a very good solution for the multitude of proletariat. The only other thing the masses would need to give up would be the remainder of their constitutional rights.

   I better stop now. I don’t want to get Leftist/Socialist/Democrites too excited.

7. snowy egret
   April 16, 2007 - 07:48 AM on April 16th, 2007

   When it comes to a liberal left-wing demacrat its PAY MORE AND HIGH TAXES FOR MORE WASTFUL PORK PROJECTS OF LIBERAL TAX AND SPEND WUSSIETARDS:razz:

8. Drake
   April 16, 2007 - 10:21 AM on April 16th, 2007

   You know 10% is good enough for God, it should be good enough for Uncle Sam too. Bring on the 10% flat tax and dump the rest!

9. TedintheShed
   April 16, 2007 - 10:22 AM on April 16th, 2007

   8.

   Does this mean atheists get to pay 0%?

10. Drake
    April 16, 2007 - 10:52 AM on April 16th, 2007

    Nope they can keep on paying the 50-60% they pay in various taxes now. Watch how fast they suddenly get religion.

11. Robert
    April 16, 2007 - 01:11 PM on April 16th, 2007

    

12. snowy egret
    April 18, 2007 - 08:03 AM on April 18th, 2007

    Make those liberal demacrats pay 90% of the taxes so the will stop their pork spending:cool::idea:

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