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Among the many skills I have never mastered, lip reading
tops the list. So I'm not sure whether President Bush is
still mouthing No new taxes,
and I'm even less
certain what that means. Is it indeed a tax increase if the
federal government raises its insurance fee on savings
deposits?
We should forget that and look at a new approach,
whereby the federal government would allow new financial
services that could provide user fees
for revenue
enhancements.
One example is the Expensible CD.
You run a small business. By some miracle, you still have some money in the bank as the year ends. You think that you have earned the money and should be able to keep it, but you discover that America doesn't work that way. If it's in the bank, Social Security and income tax will take it. Your only hope of legally enjoying the fruits of your labors is to spend the money on something you can deduct.
But you have no room for more computers and no time to
take a winter research trip
to some warm place.
Besides, you'd like to keep some cash around for the lean
times that always come.
Enter the Expensible Certificate of Deposit.
It
counts as a legitimate business expense on your income tax,
but you'll have access to the money later. Big corporations
have high-powered accountants to do this through
depreciation reserves,
and the Expensible CD would
extend that to the rest of us.
The IRS also could help by providing the Minimax
1040.
I've just been trying to buy a bigger house, and
thereby discovered that the current system is manifestly
unfair.
When you apply for a loan, you want the lender to see you as a person of substance; you want to maximize your apparent earnings. However, the lender wants to see your old tax returns. Unfortunately, there is a temptation to deflate one's financial stature when dealing with the Internal Revenue Service.
I'm sure many people would gladly pay extra for the
privilege of filing the two-part Minimax 1040.
Its
minimum version would be used for computing taxes, and its
maximum would be the copy for your banker. Everyone would
be pleased, which is more can you can say for the current
system.
Major corporations, as well as lending institutions, are able to sell their receivables. If someone owes them money, they can sell the right to collect that money, and thus get their cash right away.
But we small-timers just have to wait when someone owes us money, and I'd certainly patronize any federal agency which purchased receivables for cash. There is a possibility for abuse, but it could be reduced by requiring a novel and interesting reason why the bill hasn't been paid.
In other words, They've been saying my check is in
the mail for the past three months
is a tired cliché.
Another that wouldn't work is what I recently heard from a
metropolitan newspaper -- my January check was delayed
because we just changed over to a new computerized
accounting system.
That was an acceptable excuse a decade ago, but times have hanged. My creditors don't even chuckle when I say my new software prints checks only when a full moon falls on the fifth Friday of the month.
But I did hear one last week that should qualify. A
publishing house in New York has owed me money since
November. Last week an editor told me that We just
published a book that has angered Islamic fundamentalists,
so they've been calling in bomb threats to our accounting
office in New Jersey, and nobody there has been getting
anything done. We're working on it, but it may be a
while.
When I mentioned this at the local bookstore, they said their checks to that same publishing house somehow got deposited instantly. I cannot tell you how pleased I was to learn that these awful bomb threats had not paralyzed the entire accounting office.
And if President Bush would just establish the Receivables Purchasing Administration for Small Enterprises Which Hear Interesting Cock-and-Bull Stories, along with the Minimax 1040 and the Expensible CD, I wouldn't care if he raised taxes or not. I'd be able to afford expert advice on how not to pay any taxes, so why would I care about tax rates?
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