Trusted local news leader for Prescott area communities since 1882
Sun, June 16

Column: There is another way to do your taxes

Taxes are in the news lately, what with tax day nearly here (due Tuesday, April 18, this year) and our representatives in Congress wanting to rewrite the tax code if they can ever figure out what they’re doing on health care.

I heard an interview on National Public Radio a week or so ago. T.R. Reid was on Fresh Air to promote his book, “A Fine Mess, A Global Quest for a Simpler, Fairer, and More Efficient Tax System.”

This part stuck: He was talking about this Dutch man he met while researching how different countries do taxes. He was pretty successful, making about $200,000 a year, had a bunch of investments, two children attending private schools and two mortgages.

If he lived in the United States he would have to fill out a dozen or so forms and his taxes would take hours and hours.

But he lives in The Netherlands. How long did it take this gentlemen to file his taxes?

Five minutes, he said. Oh, it can take up to a half hour if he decides to double and triple check the government’s numbers.

And he thinks 30 minutes is outrageous and it gets him quite angry.

There is a simpler way, as many nations around the world have proven. But in the United States, we have so many deductions complicating our forms.

Get rid of the dedutions, and it’s simpler. But that’s also when people start objecting and tax reform becomes difficult.

For example:

One deduction, Reid says, is falling out of favor around the world, and that’s deducting the interest paid on mortgage loans. Reid says getting rid of this deduction would raise $103 billion a year. The primary beneficiaries are the wealthy, with their second and third homes.

Other nations have removed this deduction, including Australia, Canada, Germany, Israel, Japan, The Netherlands, New Zealand, etc.

In each case, those nations have higher rates of home ownership than we do.

Landlords benefit from this deduction more than anyone, since someone else is paying the mortgage bill (the tenants) and they are claiming the deduction.

Reid argued that our tax system needs to be revised every 30 to 32 years and that we’re due for a major overhaul now, similar to what the United States did in 1954, and 1986.

Too often we Americans are afraid to look outside our own borders for good ideas that we can borrow, if not improve upon. It’s a bit arrogant to think that only we can have good ideas.

If our members of Congress are serious about reforming our bloated tax code, I would hope they do look around the world for good ideas that they can repurpose.

And I’d say that being able to file my taxes in five minutes is a pretty good idea.


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