This is the last day to enter my H&R Block tax software giveaway. All entries must be received by today at 6PM PST. Simply comment on my H&R Block review post to enter. Make sure to leave a valid email address.

I’m a longtime user of TaxAct online tax software for one reason: it’s cheap. After completing my return in the H&R Block At Home software, I took this year’s version of TaxAct for a spin. Call my crazy, but I’ve actually started to like doing my returns twice. Yes, it takes me an extra hour, but it’s a good way to make sure I didn’t forget to include anything and double-check the results. Since it’s free until you file, it doesn’t cost me anything to double-check with a competitor. This year, I found H&R Block’s software much easier to use, which surprised me, but this was also the first year I itemized.

TaxAct Interface

The TaxAct interface is more stripped down than H&R Block, but it’s still easy to navigate. I can easily move between topics and go back to review sections I’ve already completed. If I want to change an answer, it gives me the option to re-answer the questions completely, but displays the old answers for faster click-through. Like H&R Block, it has a status bar in the upper right that offers immediate updates on the amount you owe or are getting back as you answer the questions.

Once again, I had trouble with the lay-out of the questions on my new computer. I opted to key-in the W-2 data quickly rather than using the interview questions, but one section fell below the fold and I completely missed it. I only discovered it because the total deductions from H&R Block and TaxAct didn’t match. So, once again, if you’re going to use the speedy option, make sure you scroll ALL the way down!

Importing Data
TaxAct also offers the option to download your W-2s, but I wasn’t able to. Their system requires some sort of PIN. My employer didn’t provide me with this number, so I had to manually enter the W-2 information. However, since I used the software last year, it transferred over our employer ID information and I only had to change the wage information.

New Homebuyer Credit and Mortgage Deductions
The software offered detailed instructions on qualifying and applying for the new homebuyer credit. It also walked me through the mortgage deductions.

Missed Deductions
It was much easier to miss deductions in TaxAct. In order to find the reminder to include last year’s state tax payment, I had to click a “learn more” box. If I didn’t know to look for it, I might not have checked that box.

Charitable Donations
The charitable deductions interface was in some ways more complicated, and in some ways simpler. In H&R Block, I had to enter each charity on a separate line, but I was able to lump them all together in TaxAct. Then, for charitable goods, I had to lump them all together and determine my own value in H&R Block, whereas TaxAct offered a calculation based on the specific item I donated.

Correcting Errors
Correcting errors is simple in TaxAct. Simply go to the summary and select the section you want to review. Choose the option to review all of your answers and fix your mistakes as you go. It’s fast and simple.

Overall Opinion
Overall, I thought TaxAct was more difficult to use for itemized returns. There were some items where I had to use a calculator to total information before entering it. I also had to enter complete addresses for the financial institutions that sent 1098 forms, although this information doesn’t appear anywhere on the tax return. On the other hand, some things were easier to enter and being able to easily correct errors is important to me. The software is a much more stripped-down offering, but it also has a stripped down price.

The online prices are:

Free for Basic (Federal e-File only, state $14.95)

$9.95 for Deluxe (Federal only, state $8

$17.95 for Ultimate (Federal and State)

I still think TaxAct is great for people who are comfortable completing tax returns and either take the standard deduction or are old hands at filing itemized returns. If this is your first year itemizing, or you’ve had a major life change that substantially affects your taxes, consider springing for the H&R Block software this year. The extra hand-holding could save you money. And don’t forget to enter my H&R Block software giveaway!

This weekend was full of accomplishments, and one of them was getting my taxes done. I’ve been using online tax software for nearly a decade, so I’d become pretty handy at it. Still, this was the first time I had to itemize my taxes and had a major life change to deal with, so I was a bit nervous about finding all the deductions. That’s why I was so happy when H&R Block sent me a free copy of their 2009 H&R Block At Home software to review. (All opinions expressed are my own.) I’ll also have one copy to give away at the end of this post.

The H&R Block at Home Interface
This is the first time I used physical software rather than online software. It installed quickly and easily, and then it was as simple and straightforward as using the online version, except I didn’t have to create a username and password and I didn’t have to log on or off. I could save the return or exit as I went through.

The navigation is seamless. I was able to quickly review a previous section through the summaries if I needed to. Like other programs, it has a refund or tax due status bar in the upper right that updates automatically as you work through the return. Don’t panic if it shows that you owe a high amount after the income portion – you haven’t gotten to the deductions yet!

I did run into a problem with scrolling down the page, but this has more to do with our laptop than with the software. We have a laptop with the new HD-aspect ratio. It’s great for watching movies, but not so great for using websites and programs built on the original 4×3 aspect ratio. If you have a new laptop, make sure you scroll ALL the way down and read ALL the questions before moving to the next section.

Importing Data
I didn’t have data saved in TaxCut or TurboTax, so I didn’t use this feature, but it is an option. I was able to import my W-2, which was pretty nifty. I had to provide a couple of pieces of data so it could find me, then it did the rest. Interestingly, I couldn’t import my husband’s W-2, even though we have the same payroll processing company, so it must be something your employer has to choose.


New Homebuyer Credit Instructions and Mortgage Assistant
I really appreciated the new homebuyer credit informational screen and the mortgage assistant section that helped me find all of the potential deductions and credits. My 1099s were correct, but the software prompted me to double-check my escrow statement and amortization table to be sure.

They also provided clear instructions about the required documents for the homebuyer tax credit and submitting my return on paper.

Frequently Missed Deductions
The software also flagged a frequently missed deduction that I certainly would have missed. If you paid state taxes when you submitted your state return last year, that payment is deductible this year. For example, if you owed an extra $500 on your 2008 California return, but mailed the payment in 2009, deduct it on your 2009 return. We owed a hefty sum last year, so I was thrilled to be alerted to this.

Roth IRA Alert
This is a special year for Roth IRAs, or people who want to convert to them. The software offered an explanation and a reminder of how you can take advantage of the new tax rules for 2010.

New Car Deduction
I didn’t have a new car to deduct, but the software includes detailed instructions for anyone who does.

Correcting Errors
This was one area where I found the software lacking. I couldn’t find a way to go back and re-answer questions once I left that portion. For example, I misunderstood the questions for the Making Work Pay credit. I realized that once I got to the form review section and read the question on the actual IRS form. I went back into the software, but I couldn’t change my answers in the main interview section. Instead, I had to click the button for “whole form” and change the answers on the form, which then updated the software. It took me a while to figure that out, so I would have preferred an option to re-answer those questions.

For those of you who speed-read, like me, the software asks if you received any Economic Recovery Payments. If thought they meant the portion of the credit that was returned to us in our paychecks, so I checked yes. They were actually referring to the $250 one-time payments sent to Social Security and SSI recipients. If you didn’t receive a Economic Recovery check or deposit, then the answer is no.

Overall Opinion
Overall, this software was very easy to use. It took me about an hour to complete the return, but some of that was spent double-checking documents and collecting escrow documents I wasn’t expecting to use. I’m used to zipping through the software, but I’ve never itemized before, so I appreciated the extra hand-holding the software offered. I’m still irritated that I have to file on paper, but that’s not H&R Block’s fault!

If this is your first year itemizing or you’ve had another major life change (adoption, birth of a child, divorce), it’s probably worthwhile to spring for more detailed software. As you’ll see in tomorrow’s review, it’s easy to miss things you’ve never deducted before.

The download prices are:

$19.95 for Basic (Federal only)

$44.95 for Deluxe (Federal + 1 State)

$59.95 for Premium (Federal + 1 State for self-employed/rental property owners)

The boxed versions at Amazon are:

$14.99 for Basic

$34.99 for Deluxe

$43.49 for Premium

The Giveaway!

I have one copy of H&R Block At Home software to give away ($150) value. Entering is simple – just post in the comments. Make sure you use an email address you check regularly. Don’t worry – I won’t use it for anything except telling you that you’ve won. Since it’s early in the season, I’ll run this giveaway for two weeks. All entries must be in by March 3 at 6PM, PST.

I just saw the bad news on CNN for new homebuyers like me who want to file for the First Time Homebuyer tax credit. I’m used to filing my taxes online and getting my refund in ten days. This year, I will be stuck waiting for my sizable tax refund for months because I have to file on paper. We tried to avoid this by stopping withholding, but for various reasons, we still wound up overpaying by a few thousand. I want my money!

Prepare Online, but File Your 2009 Tax Return on Paper
You can still prepare your return online or with tax software. I’ll be reviewing two of the options in mid-February. However, due to fraud, the IRS is now requiring first-time homebuyers to file on paper and submit documentation in order to get the credit. I expect it will be the same for those who qualify under the extended credit or longterm owner credit, but those forms aren’t out yet.

Here’s the tricky part: the IRS doesn’t have this information on their website. The current form tells you to file it online as part of the Paperwork Reduction Act. According to CNN, they have been returning amended returns with requests for more information. I confirmed that the return must be filed on paper at the IRS website, but I have conflicting reports about the items you have to send along with it. You can still receive direct deposit of your refund if you file an original return on paper, so that should cut a couple weeks off the waiting time.

The IRS has posted the updated form. It only requires a copy of your HUD-1 form signed by all parties. If you, like me, didn’t receive signed copies of your documents, call your escrow company to request it.

What to Include with Your Return
If you closed escrow before November 7, 2009, you file form 5405 with your 1040. According to some sources, you only need to attach a copy of your HUD-1 settlement statement. According to CNN, you must attach a signed copy of your HUD-1 settlement form, a signed copy of a mortgage statement, and either a bank statement, photocopy of your driver’s license, or a paystub showing the new address. Hopefully you saved all your mortgage docs and received a paper mortgage statement! We only received one statement because we paid online. I hope we still have it. We’ve now refinanced, so we can’t even get copies of statements for the old mortgage.  If you haven’t yet closed, there are other documents to submit. See the form’s instructions for details.

I don’t mind submitting documentation – it was weird the IRS didn’t ask for proof in the first place. (They expected all taxpayers to be honest? Please.) I do mind that they don’t list the requirements on their website or have the new form out yet.

Progress on Amended 2008 Returns
If you filed an amended 2008 return to get the credit and haven’t received your money, you may receive a request for proof from the IRS. It’s also taking them months to process the amended returns, so that could be the reason you haven’t gotten your money. Unfortunately, you can’t cancel the amended return and claim the credit on your 2009 return. Once you’ve filed, you’ve filed.

Claiming the Credit for late 2009 and 2010 Purchases
If you bought a house in November or December of 2009, or will close escrow by April 30, 2010, you have to wait to claim the credit. you can now file for the credit on your 2009 return. The IRS is still working on the new form and regulations, so I wouldn’t expect to get your money quickly.

Before you file your return, double-check that you’ve done everything right. Hopefully the IRS will have the new rules out soon.

Yesterday I wrote about the benefits of the Roth 401K, and mentioned that you can roll the money into a Roth IRA to avoid required minimum distributions. So now I should probably explain what a Roth IRA is and why you should have one.

What Is a Roth IRA
A Roth IRA as an individual retirement account that you can set-up without going through your employer. You can invest the money you deposit in mutual funds and stocks. It’s very similar to a traditional IRA, but with a few key exceptions:

Post-Tax Contributions: When you fund a traditional IRA, you receive a tax deduction for your contribution. With a Roth IRA, you don’t receive a tax-deduction. However, the contributions and growth are both tax-free when you withdraw them during retirement because you paid the tax on the money you contributed already.

Income Limitations: Roth IRA contributions are subject to income limits. If you’re single, the limit is $105,000-$120,000. If you’re married filing jointly, it’s $167,000-$177,000. If your income exceeda the cap, you can still own a Roth IRA, but you can’t contribute to it that year.

No Required Minimum Distributions: 401Ks and traditional IRAs require you to withdraw a minimum distribution every year (except 2009) once you reach age 70 ½. Not with the Roth. You can leave the money there forever. If you pass it on to heirs, they can also leave the money there forever.

Looser Early Withdrawal Rules: I covered this in a previous post about withdrawing from a Roth IRA. Suffice it to say, you can withdraw your funds for a wider variety of things and with fewer penalties with a Roth IRA. Obviously, it’s still not recommended because you’re depleting your retirement, but it’s easier.

How to Open a Roth IRA
Opening a Roth IRA is simple. Choose a brokerage or mutual fund and tell them you want to open a Roth IRA. You can usually apply online, but will need to submit some signed paperwork. A brokerage will give you more options because you won’t be limited to a single fund family, but it’s a personal decision. You can open a Roth IRA for 2009 until April 15, 2010, so you could actually make double contributions in the year you open it by designating some contributions for 2009 and some for 2010, even though they all took place in 2010.

If you don’t work, but have a spouse who does, you can open a “spousal IRA”. Basically, you can contribute money from any source, as long as your spouse has qualifying income.

Roth IRA Contribution Limits
The contribution limits for a Roth IRA are the same as the limits for traditional IRA: $5,000 for most people, $6,000 for those over the age of 60. This is a total for both traditional and Roth IRAs per person, not per account. So, you and your spouse can contribute $5,000 each to any type of IRA account.

If you exceed the cap and want to open the account, you still can. Simply contribute to a traditional IRA, and then roll it over to a Roth IRA. Starting in 2010, there are no income limits for rollovers, only initial contributions.

At the start of each year, my husband and I calculate our taxes for the year and adjust our withholding to get the lowest refund possible. That way we get to use more of our money during the year, rather than give the government an interest-free loan.

Withholding Errors Do Happen
My employer’s payroll company usually gets it right, but as we’ve seen before, my husband’s employer’s payroll company isn’t quite as good at that. Which is odd, because they use the same payroll company. I guess my employer, being larger, gets better service.

At any rate, my husband’s first paystub of the year has arrived, so I entered the new withholding into my tax spreadsheet and discovered that we would overwithhold by a whopping $5600 if the current levels were maintained.

That didn’t seem right to me, so I used the Paycheck Calculator to verify that their calculations were correct.

Yeah, not so much. I can’t figure out how they arrived at this particular figure, but they’re adding $235 to his federal withholding. Interestingly, that’s the same amount they used when they withheld taxes from his paycheck, but forgot to pay him his whole salary. I don’t know what their obsession with $235 is. At one point we had them withholding an additional sum every paycheck because of the marriage penalty. It’s possible that was $235, but that was 6 months and two W-4 forms ago.

To double-check the double-checking, I also used the IRS withholding chart in their tax publication. I looked at several possible calculations and not one of them matched the number the payroll company came up with. I don’t know what they’re doing over there.

How to Handle Errors
If you find an error, take your stub to your HR rep (or whoever does payroll at your company) and tell them it’s wrong. They’ll communicate that to the payroll company or verify that they have the correct information entered into the system if they process payroll themselves. Then check it again when the next paycheck arrives. Unless they seriously messed up, you probably won’t get a refund of the overwithholding.

Obviously, one paycheck error isn’t going to break us, but over a year, it adds up. Sure, we’ll get it back, but I’d much rather have it now. If you agree, take a few minutes to check your paycheck when your first stub comes. You might be glad you did.

‘Tis the season to start gathering your tax documents. Yeah, it doesn’t quite have the same ring as ‘tis the season to be merry, but it must be done nevertheless. Last week I tried to make a list of all the tax documents I need to gather or expect to receive, but I always worry that I’m forgetting something and will only discover it when I sit down to do my taxes. That’s what I was happy to discover this new tax checklist from H&R Block that helped me figure out what I should expect in the mail and what I need to gather. It was a lot longer than my list.

Filling Out the Checklist
It’s pretty simple. Just check the boxes yes or no. It’s a short list, but it includes items specific to 2009 like the homebuyer tax credit and new car tax deduction as well as the standard income and expense questions.

tax-prep-checklist.gif

Once you complete the questionnaire, it provides a complete list of everything you need broken down by category.

tax-prep-2.gif

Gathering Your Documents
If your taxes are pretty simple, then you might be done after your W-2 arrives. All tax documents must be mailed by January 31, so it may take until February 10 to receive everything. If you haven’t received a document by then, call the company that was supposed to issue it to request a new one. You may also be able to go online and print it out from there, which will save time.

Double-Check the Documents
Don’t wait until you’re doing your taxes to double-check the documents, especially if you’re the type of person who completes your taxes on April 15. Instead, check them as they come in. Compare your W-2 to your last paystub. Compare your mortgage interest statement to your amortization schedule/personal records.

Compile Personal Records
If you’re self-employed, paid tuition, or did charity work, you may not receive an official tax record to rely on, so pull together your receipts and other personal records related to it. If you take the home office deduction, read my previous post to find out which documents you need for that.

Keep Everything Together
Before you compile those taxes, keep everything together. A small folder is easy to keep track of. I use a shoebox, but my shoebox is organized, not just a jumble of random receipts. My business receipts are in an envelope labeled for business receipts. I also photocopy receipts that are printed on thermal paper, because they will fade over time. Once I file my return, I put the shoebox labeled with the year in the closet, and put a hard copy of the return in my metal file box for safekeeping.

Shred Items You Don’t Need
There’s no reason to keep all your old paystubs once you have the W-2. The same goes for credit card statements if you have the actual receipts. Shred whatever you no longer need, preferably in a cross-cut shredder. I keep each shoebox for three years, and then shred the contents. This may take a while – give your shredder a few breaks so you don’t overheat it!

I’ve set aside this weekend and next to gather my personal records and documents, and I’ll slowly be building my stash of other documents until the end of the month. But I’m one of those obnoxious people who files their taxes as soon as possible.

Congress passed legislation expanding and extending the homebuyer tax credit. The President is expected to sign it November 6, 2009. Here’s an update on how the credit works and how you can take advantage of it if you haven’t already bought a home.

Homebuyer Tax Credit Extension
The original First-Time Buyer Tax Credit was set to expire November 30, 2009, which meant the sale had to close by that date. The credit has now been extended to purchases under contract by April 30, 2010 and closing by June 30, 2010.

Active members of the military who served at least 90 days outside the US have until June 30, 2011 to take advantage of the credit.

Homebuyer Tax Credit Expansion
Congress also expanded the tax credit in two important ways.

Higher Income Caps
Previously the credit started to phase out at $75,000 for singles and $150,000 for married couples. The new caps are $125,000 for singles and $225,000 for married couples. Don’t ask me why the joint cap isn’t double the single cap, that’s just Congress not understanding basic math again. The new cap applies for sales that close after November 6, 2009, so if you bought before then, the original cap still applies.

Additional Credit for Move-Up Buyers
The credit is still $8,000 for first-time buyers, or buyers who haven’t owned a home in the last three years. It now also offers $6,500 for move-up buyers who have lived in their home at least five consecutive years out of the last eight and are buying a primary residence worth less than $800,000. If you’ve been thinking about selling your current home and upgrading to a larger one (or I suppose downgrading, it doesn’t say your new home has to be worth more than the old one), this is a great opportunity to score a little bonus on the deal.

How to Claim the Credit
Contrary to what some scammers are doing, you have to actually close escrow on the house before you submit your claim for the credit. There’s no credit for thinking about buying a house, although some states and the FHA do offer programs that allow you to borrow the credit for your down payment and then repay it as soon as you get your refund.

You can file the credit on the current year’s tax return, or wait until next year’s return to file. If you need the money now and are below the cap, you can file an amended return for your 2008 taxes. The credit will arrive in 12 weeks or so, and include interest since April 15, 2009.

The other option is to wait and claim the credit on your 2009 taxes (if you bought in 2009). If you buy in 2010, and close before April 15, you can claim the credit on your 2009 taxes, or file an amended 2009 return after closing. Otherwise you can wait until your 2011 return to file the credit. Once again, check and see where you expect your income to be if you’re riding close to the cap. If you’re at the edge, try to delay bonuses to get yourself the maximum credit.

If you’ve been thinking about selling your home, call a real estate agent now. If you’re looking for a home, don’t stop now. And if you’re on the fence, take a hard look at your finances to figure out whether now is the right time for you to buy. If you can’t afford the mortgage, then don’t buy just because of the credit. An unaffordable home will cost you a lot more than the tax credit will save you.

The end of the year is just over two months away, and at least three weeks of that will be gobbled up by various holidays. So, take the time now to assess what you need to do to maximize your money by the end of the year.

Spend Down Your FSA
If you have a flexible spending account, any unused funds will vanish January 1, 2010. Remember, this is your money that was magically whisked from your paycheck before you received it. To avoid losing it, you need to use it up. So check the current balance and then start scheduling doctor visits, refilling prescriptions, and stockpiling supplies. Review your plan to make sure which appointments/purchases qualify.

Reassess Next Year’s Contributions
Take a look at your budget and expenses. Did you need to scramble to use up the FSA funds? Then perhaps contribute less next year. On the other hand, does anyone in your family have a major medical expense coming up? Maybe you should increase it. Look at it this way, you’ll spend this money either way. If you put it in an FSA, it will reduce your tax base and actually save you money.

Take Stock of Your 401K
If you stopped contributing during the crash, take a good look at your accounts and see if it’s time to get back in. This is also a good time to rebalance your portfolio. The economy has drastically changed – it might be time to get out of some sectors or into others. If you hold a variety of mutual funds, see if one has grown faster than the others and is now out of balance.

Estimate Your Taxes
If you’ve received a raise, run a small business in your spare time, had a major life change, or a major life issue, take a look at your tax bill. You can go to IRS.gov to use the withholding calculator. It’s not perfect, but it will give you an idea of whether you’ve under- or overwithheld. If it’s the former, change your W-2 to withhold additional funds and avoid a penalty. If you’re latter, decide whether you want to that money back now, and change your W-2 to withhold less, or plan ahead for how you’ll use that refund when it comes.

Maximize Your Tax Deductions
If you’re going to owe more than you thought, look into maximizing your tax deductions. For example:

  • See if you have any real stock losers that you can write off against capital gains or $3000 of ordinary income.
  • Are you just shy of the 7.5% of AGI minimum to deduct health costs from your taxes? Go see the doctor. If you have something big coming up next year that will put you over the limit, delay all other health costs until next year, too.
  • Are you debating whether to buy a car now or in January? Buy before the end of the year for that one-time new car tax deduction.
  • Make a few charitable donations or clean out your house and donate the decent stuff to a charitable thrift store.
  • Take advantage of Cash for Appliances. Upgrade your HVAC or water heater to also take advantage of the related tax credit (make sure it qualifies for both, first.)

I saw an interesting story on CNNMoney about the recent trend toward taxing the rich to pay for government programs, both major and minor. I was already a bit stabby about the “tax them if they make more than $250,000″ mantra, and now I’m even stabbier. If you want to see me “defend the rich,” keep reading. If not, then feel free to yell at me in the comments starting now.

Is $250,000 Rich?
My answer there is: it depends. If you’re living in rural Nebraska, then yes, a $250,000 a year income might be considered rich. However, you might also be a farmer and that income is revenue from your farm before expenses. So, then maybe you’re not rich.

Or, let’s take the more likely scenario – a two-career family in California. It’s entirely possible for a couple living in California to earn more than $250,000 a year. It’s also very likely that those salaries are the result of very expensive MBAs, law degrees, medical degrees, and other advanced degrees. So a good chunk of that money is going toward student loan debt. Another big chunk is going toward the highest cost of living.

$250,000 seems like a king’s ransom to some people. It seems like the income of middle-class, middle-aged families to other people. In effect, a tax on people making more than $250,000 a year is a tax on the middle class for those of us who don’t live in the middle part of the country.

But They Don’t Need the Money
That’s the argument you hear from others intent on taxing them. No, most people making more than $250,000 aren’t hurting financially. They can afford what they need and have some money to play around with. I will give you that.

Could This Actually Hurt the Economy?
I’m no economist or expert, but it seems to me that we’ll reach a breaking point if the government adds a 1% tax here, and a 2% tax there, and another 1% tax there. Slowly, the tax rate creeps up. The top tax rate currently stands at 33%. If enough federal and state programs get pushed through, that number will creep up. Then factor in the tax increases that will be necessary to pay off all these deficits we’ve run up and we’re zooming past 40%. Suddenly those “rich” people aren’t feeling particularly rich, or particularly like buying that expensive car, or that new big screen TV, or any of the other purchases that make up most of this country’s economy. Those same people will also start looking for ways to hide their money so they don’t have to pay for all those programs.

Funny Thing: Many People Don’t Support These Taxes
I saw an opinion piece that argued that people are aspirational about their income. They don’t necessarily want to supertax the rich because they expect to be rich someday themselves. I saw that very thing happen in California when a very rich actor wanted to pass a 1% tax on incomes over $1 million to pay for a mandatory pre-school program. The proposition went down in flames. Maybe it was the idea of mandatory pre-school, but I suspect it was the idea of yet another tax. We Californians are taxed enough, thank you very much.

What If They Don’t Index that Income to Inflation?
That’s my biggest fear with these taxes on the rich. If we’ve learned anything about attempts to capture more of the income of the rich it’s this: inflation gets us all. The AMT was created to tax the rich. Except it wasn’t indexed to inflation. Now it taxes the middle class. If any of these “tax the rich” proposals get passed, they must be indexed to inflation, otherwise they really will be middle class taxes thirty years from now.

Look, I know many of these programs are important. I also know we need to pay for them without creating debt, but I don’t see tacking on more taxes little by little as a way to do it. The best option would be to reduce spending in other areas. I haven’t considered the flat tax or the fair tax, but maybe they ought to get a closer look. Or maybe we need to pass new tax rates at all levels. Whatever we do, it needs to be honest and up-front, not sneaky taxes that sound good on paper but don’t work in reality.

Okay, I’ve said my piece. Attack away.

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