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TaxCut Giveaway – How Would You Change the Tax Code?

by Ryan Guina

I was recently given two copies of TaxCut Premium Federal edition to give away on my website. They left the details of the giveaway to me, so after a quick brainstorming session, I decided it would be fun to ask readers how they would change the tax code. I think the tax code can be tricky, so I want to hear what you would do to change it!

About TaxCut Premium Federal Edition

The TaxCut Premium Federal edition can import data from TaxCut, TurboTax, Quicken, MS Money, and several other money management programs. The software walks you through your return and automatically screens for life changing events, deductions, errors, investments, small business scenarios, rental property, and even one free session with an H&R Block Tax Advisor. Basically, if this program doesn’t cover your needs, then you should probably hire a tax professional to do your taxes for you!

Note: Free federal e-filing is included with this version, but filing state taxes may cost extra.

TaxCut Giveaway Rules

I only have 2 copies of TaxCut Premium Federal edition to give away right now, but I may have more later in the tax season.

Entry requirements: There are two ways to enter the giveaway.

  1. How would you change the tax code? All you need to do is leave a comment about how you would change the tax code. The comment must be reasonable (e.g. “eliminate taxes” would not qualify). Only one comment entry per person please, and yes, I will check!
  2. Share this article. If you have a website, mention this post to your readers for another entry. Please contact me with the link to make sure I know about it.

This giveaway will end one week from today, January 29, 2009.

Winning selections: Two winners will be chosen out of all eligible entries. Your odds of winning depend on the number of eligible entries received. Winners will be announced on this website and will be notified via e-mail.

Eligibility:

  • This giveaway is only open to US residents, but in all cases is void where prohibited by law. The sole exception is that I am willing to ship to military members who are located at an APO or FPO address.
  • All winners must be of legal age — usually, 18 years of age or older.
  • No purchase is necessary to participate in this giveaway.
  • I will choose the winners from the qualified participants. I am the sole judge of qualifying entries.
  • In order to award the prizes, I have to be able to contact you. Please leave a valid email address with your comment; your contact information will never be shared with anyone.
  • Prizes will be awarded and shipped by me. Winners will be required to submit a physical address where I can ship the prizes. Again, your contact information will never be shared with anyone.
  • Prizes are provided as-is, and substitutions may be made at my discretion.

Even if you don’t win, you may still be eligible to file your federal taxes free anyway! If you are in the military, here is more information about how military members can file their taxes for free.

Good luck, and I can’t wait to hear how you would change the tax code!


Published or updated January 21, 2009.
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{ 21 comments… read them below or add one }

1 Leah S

I’ve always admired the Fair Tax idea. While I realize that would cut out hundreds of thousands of accountant-related jobs, I think it would go a far way into setting up for a more frugal USA. I think people would be more inclined to try building, growing and bartering for their goods. Who WANTS to pay 23% tax on an item? Even though it’s close to the same number people get taken out of their paychecks and state/county tax rate; a clean cut number like that could have people pausing to purchasing a big ticket item. They’d be more on the lookout for used or a good sale.

Between higher awareness and a willingness to find a different solution to a needed item, I think USA could become more frugal with a 23% Fair Tax code implemented. Less dependency on the government is a good thing. :)

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2 PT Money

I would do away with the idea that the progressive tax rate structure is just. In my opinion it’s taxation without representation. And I’ve always thought that, not just since I’ve been making the large bills. ;)

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3 Pinyo

I don’t know if this fits under tax code or not, but I would go through the tax code with the intent to simplify it as much as possible. I think some tax codes probably cost the government more money to manage than the tax revenue they make.

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4 Ashley

While I agree with the Fair Tax, even more than that, no matter what structure we go with, I’d do away with automatic withholdings and everyone would have to write a check for their taxes.

OR – (because I recognize that may not be realistic because too many people are irresponsible to save properly), maybe I would like to be it set up like an HSA account. You do have automatic withholdings, but they go into an account that you can only touch to pay taxes. You receive your bill and have to write your check off of that Tax Savings Account.

Although something like 40% don’t pay taxes and I’d like to see that remedied, I think it would really get people to become more invested in our tax codes if they had to physically write a check.

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5 jim

Throw it out and start over. :)

[feel free to DQ me, I just wanted to make a crack anyway]

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6 Kristy @ Master Your Card

Make it fair and simple.

By fair I mean that no single person or business should be getting a special tax break. Set the standards required to raise revenue, but once it’s set, don’t make all these exceptions. Someone in the 15% tax bracket should pay just as much as everyone else in that same bracket. Likewise, a big corporation with $3 billion in assets shouldn’t be getting special breaks that someone else in the same category isn’t getting.

By simple I mean get rid of the all the legal jargon that makes no sense to the layman and require special classes in order to file your own taxes every year – and that’s just for the 1040 EZ. Anything above a 1040 and you start getting into college level courses. As an example, “Deduct 10% of these expenses only if they exceed 2% of the total adjusted gross income as reported on line 33a.” Huh?

I’d also eliminate the estate tax on land as an inheritance. By that point it’s taxed three times – when it’s purchased, annually based on value, and then finally when it’s passed on. That’s excessive. This would only apply to the land, though. In terms of monetary inheritance, that’s like a capital gain and in the interest of keeping it fair, I think if investors have to pay capital gains taxes, then those inheriting money should pay as well.

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7 john

For me too progressive method of taxation is an ideal one!

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8 Jarhead

Throw out the 1000s of pages of tax code and make it only a couple of lines. All individuals will pay X% of their income is line 1. Line two is exactly the same but it is for businesses not individuals.

No deductions for kids, mortgage, etc. You get paid and X% is automatically withheld (just like today).

This will do two things first everyone pays their fair share. Also the government gets to save millions if not billions of dollars by getting rid of the IRS (99% anyways).

Don’t consider me for the prize as I already have done my taxes so it won’t be of any use to me.

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9 Curious Cat Investing Blog

Conceptually I think two things are needed. First think of the economic impact of taxes and second make them as simple as possible. So simplifying the tax code is good. Taxing spending is better than taxing income. Taxing kids that get millions from their parents or grandparents is about the best tax in existence. Taxing minimum wages workers to pay social security to millionaires is about the worst tax in existence. For the last 7 years we have been adding to the tax burden of our children and grandchildren as the rate of somewhere near $400 billion a year.

Put all of that together and we need to most of all stop raising taxes on future generations to pay for todays living beyond our means. Raise a simple tax on consumption (it would be nice if we could reduce the income tax but we have to repay some of the debt those before us accumulated before doing so in my opinion). And raise the inheritance tax (which already only effected those getting millions before we decided to eliminate that tax and raise tax on future generations instead).

Now we probably cannot start the consumption tax while in the grips of the economic problems created by those living beyond their means the last few decades. But as soon as the economy is stabilized that is what I would do. What will happen instead is we will chose politicians that tax our children and grandchildren so we can not have to pay for what we consume.

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10 Kim

Simple. Flat tax based on income only. Those making under the poverty level would pay no tax. Our current tax code has been hijacked to modify our behavior by tax incentives and penalties. Let’s eliminate that!

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11 RC@Thinkyourwaytowealth

I think the fairtax.org idea is a good one-taxing spending, not income, with rebates to those with very low incomes. How you would make that transition, though, does not seen so clear cut to me, but the current tax code is way too complicated-and not really fair either, and needs to be simplified.

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12 David Aase

I agree that a flat based tax on income would be idealistic, however it seems like too many people might abuse a system like that. It could be possible to take unemployment benefits and forgo paying taxes? That doesn’t seem right.

Our current tax code is on the right path, however their seem to be too many steps involved. Once everyone has access to a computer and the internet, make e-filing mandatory with no fees. That’s how I would change the current tax code.

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13 Ryan

David: I agree that mandatory e-filing would make it easier on the government and reduce errors, but it may be awhile before everyone has regular access to a computer.

People are required to pay federal taxes on unemployment benefits… almost seems unfair, doesn’t it?

To everyone: Great comments! Good luck to everyone who entered!

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14 Julieanne

I’d institute a flat tax on everyone’s income, and call that good enough. We’re all tired of jumping through tons of hoops just to get our taxes paid…or to get out of paying our taxes!

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15 Night Runner

Like some of other posters before me, I would do away with the progressive method of taxation. It doesn’t seem to encourage people to earn more money – or at least to disclose their earnings to the IRS. Then again, I’m definitely biased on this issue, since I expect to go up a few several tax brackets in the not-so-distant future. ;)

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16 Ryan

I think you hit on it when you said: “disclose earnings.” There are a lot of people who deal in cash and won’t report anything to the IRS if possible.

And nothing wrong with moving up a tax bracket or two – it just means you are earning more money! :-)

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17 Robert

I’d like to see a simplification of the progressive system we have that would start at one percent once you earn above a trailing retrospective 3 year average poverty line rounded up to the next $1000 and indexed by the regional consumer market basket indexes. Incrementing the tax one percent for every $5000 up to ten times the established regional poverty line base and level above that ceiling. The states would tax goods and services to fill the funding gaps as they do now but with federal caps on taxing “essentials” i.e. food, etc. They would be free to tax the crap out of things the states deemed luxury goods and service … afterall, we are the USA. There tax policy dreamed up in ten minutes or less … I’m sure there are many better ideas than the current system.

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18 Randy Hughes-King

I know I’m way late, anyhow:

A. Tax Code
1. Code
a.The only alterable section of this code is “c” subsection of sections “2” and “3”. The alteration is only allowed by citizen referendum.
b. These taxes are to take effect at the time of currency exchange.
1. Sales Tax
a. Sales is defined as an exchange of currency for anything other than labor.
b. Labor is defined as the efforts of a person.
c. Sales Tax: 5%
2. Income Tax
a. Income is defined as the exchange of currency for labor.
b. Labor is defined as the efforts of a person.
c. Income Tax: 5%
B. Tax Code Exemption
1. Government
a. Any exchange of currency with the government as a party or observer will not be taxed.

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19 Charles

Agree with Pinyo, some codes are income negative for IRS, for third parties and bothersome for the filer. Change made in 1986 requires filers claim every penny of interest earned on bank checking and savings accounts. Banks must provide customers and IRS with 1099-INT forms regardless of amount interest earned. Loss in manpower, equipment use, time, postage, etc, for banks and IRS cost taxpayers in long run with smaller interest returns, added filing complications and delays.
Nobody invests in bank checking and savings interest to get rich; it’s a place to put paychecks, rebates, tax returns, etc. for day to day transactions.
State and local codes are just as vulnerable to negative income requirements.

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20 Justin Builes

This is a regulation that is hitting near and dear to my heart. It is one I am actually considering to make the effort to fight and change.

Qualified Student Loan Interest Deduction:
Under the current system, the deduction of student loan interest is limited to $2500 per year and is prorated through a system that reduces this deduction once your AGI reaches $55,000 and is fully eliminated if your AGI reaches $70,000.

Neither if these income amounts is a significant salary amount, especially if you have any substantial amount of debt. Add to that student loan repayments and, trust me, you do not have any excess income. In times where you want people to have income to spend, what better way than to put it back into the demographic of people aged 24-40, this age group contains the most disposable income and the tendency to spend such income.

The real issue here, is that if the student loan was a mortgage on a house, all interest would be deductible under the current tax system. Not to mention, the taxpayer would be the owner of a house and the tax shelters, and equity that goes along with it. This means, by spending $150k on a college education, I am being penalized compared to if I had studied a trade and purchased a house.

My proposed change to the tax code would be to remove the cap on deductible student loan interest. We chose to go to college to better ourselves and create the next generation of business men, accountants, and lawyers… in doing so we are being punished by not becoming plumbers and construction workers. Put more money back into the pocket of the 24-40 demographic of working professionals and watch a change in the economy.

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21 Scott Greene

The current Income Tax system has been falling apart for years.

Even CPA’s and tax preparers do not understand the Income Tax system, as evidenced by the different answers you get to the same questions about how to report various income transactions.

Just look at the enormous amount of tax court cases where people pay money to argue with their government over what is deductible, what is not deductible, what can be carried forward, what can be carried back, what are the facts and circumstances surrounding the income and/or deductions, etc. etc.

If this 75,000 page income tax code was clear and understandable, there would be very little arguments over much of anything!

So instead of people spending their time making money, they end up spending time and money figuring out how to comply with the government’s bookkeeping requirements, which change every single year!

The current Income Tax system is a horrid mess and hurts everyone.

Anything (flat tax, fair tax or 9-9-9) would be light years better than the insanity we have now.

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