Wednesday, November 29, 2006

Bah, humbug!

The holiday season is getting off to a bad start for me. Frankly I'm pretty grumpy. The main reason for my grumpiness is that I'm being audited by the Internal Revenue Service next week. Wonder why I'm not blogging much, and only slowly getting to the discussion board posts and replies? The time that I am wasting getting records together from 2003 is the reason. Preparing for the tax audit reminds me of how badly our tax system needs reform. Only a tax accountant or lawyer could like our present federal income tax system. I don't know any economist, regardless of their political views, that thinks that our present tax system is either equitable or efficient.

President Bush appointed a bipartisan commission to study the American federal tax code in 2005. The bipartisan panel was to advise him on options “to reform the tax code

The President's Advisory Panel on Federal Tax Reform issued its final report in November 2005, and you can read the report online. The report starts off: “For millions of Americans, the annual rite of filing taxes has become a headache of burdensome record-keeping, lengthy instructions, and complicated schedules, worksheets, and forms – often requiring multiple computations that are neither logical nor intuitive.” No kidding, so what has been done to real tax reform a reality?

You will likely spend at least half of your life working to pay taxes. Feel free to use the Discussion Board to learn more about taxes and fiscal policy, and to educate your classmates. If you do decide to post on the macro impact of taxes and/or tax reform, do remember the distinction between positive and normative economics. You can find some basic information about federal taxes in chapters 2 and 15 in your textbook.

Extra credit: Is the United States a high tax or low tax country compared to other rich, developed countries, Cite your source, and briefly explain your answer. If you are the first student to send me an e-mail ( with the answer, you will be rewarded with two extra credit Discussion Board points. Only two points extra credit per student can be earned in any given week from the blog questions.

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