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January 22nd, 2014 - 08:55 AM
Tax Time and Productivity
Like most people I do my own taxes and if it wasnít for software available from the various financial software companies I would be totally lost. Even with the software it takes a considerable amount of time to organize the data from the past year and get it into a form that makes it easy to enter all the various numbers into the tax software. Over the last few years the results havenít been pleasant. My wife and I almost always end up paying more and paying a fine for not having paid enough over the course of the year. This happens in spite of following the formulas available to calculate the needed monthly deductions.
I have begun to wonder just how much productive (money making, tax paying) activity is prevented by tax time. I am using time that would normally be used creatively to add material to our web site for sale. The productive activity ranges from being out taking photographs to doing the post processing and submission to the web site. For the next while much of that time will be taken up with taxes. If one takes all the people who are involved in the non-productive activity of tax preparation and makes an estimate of how much money is lost in non-productive effort I would bet that the amounts taken out of the economy would be substantial.
This, in my mind, is a strong argument for a flat tax of say 15% and everyone pays. Equal sacrifice on the part of everyone and the tax would be payable as the money is made so there would be no tax time at the end of the year.