Hi Everyone,

It is amazing how already the second Obama cabinet appointee has tax problems. First it was our in the mean time confirmed treasury secretary Timothy Geithner for not paying self-employment taxes. At least he disclosed it with the vetting committee in November, although they found more during the vetting. Our next tax cheat is former senator Tom Daschle, who is the proposed secretary of health and human services. He did not even disclose it initially to the Obama team. He will be in charge of potentially socializing our health system, although a bit happened already last week under the radar. Anyway, he forgot to pay income tax on consulting income and he was not aware that if you use a driver paid by a third party for personal use, it is considered taxable income. He paid in the neighborhood of $140,000 in back taxes on January 2nd. Can you imagine we owed that much, we would have liens from the IRS all over our assets.

So what is wrong with those politicians? Are they all tax cheats and consider themselves above the law. I guess one could always argue that and I am sure some politician fit that description. I actually want to go a different route. Our tax laws are so complex and nobody fully understands the law, even though these two issues are well understood and not part of the complex part. So it is time to simplify the law as even the people who write (in the case of Daschle) or supervise the agency that collects our money (in the case of Geithner) don’t understand it. If complexity is not the problem but stupidity, then these people are in the wrong position and it scares me to death thinking about who is running our country.

So the mantra of the day is.  Simplify the tax code, reduce tax rates and get rid of special interest exemptions and the government trying to tell us how to behave with certain preferential tax treatments. Let’s just have a flat tax rate that applies to everyone with one generous exemption for each member of the family listed on the tax form. And then do the same for corporation by cutting the rate by half and get rid of special interest tax breaks.

Cheers,

Patrick