Why I Don’t Fear “Tax Simplification”

notepad-411030_1280Now and then clients or friends will ask me if I fear various proposals to simplify the tax system, such as a nationwide sales tax. They ask if I’m afraid of becoming obsolete because of a “simplified” tax system.

My answer is always “no,” for several reasons.

One, it’s disingenuous for politicians to say things like “my proposal for a nationwide sales tax will eliminate the IRS!!!!”

There will always be a tax system of some sort, and that means there will always be a government agency overseeing that tax system.

Even something that’s supposedly “simple” like a sales tax or flat tax will have layers of complexity that will need to be navigated. This means there will always be conflicts between citizens and the government, and therefore a need for someone to serve as an advocate for the citizen in those disputes.

Two, even if we lived in a utopia where there were no taxes at all, businesses would still need accounting help. For example, businesses wanting to get a loan from a bank would still need to provide financial info to the bank.

It would be a major change for accounting firms to move away from tax preparation into just doing financial statements, business consulting, etc. But it’s a survivable change.