Now 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.
Jason, I actually got involved in a LinkedIn discussion about this very topic, what’s interesting is that I got pushback from people who didn’t know what the term “deductible” entailed as it relates to inputting the info on the appropriate tax return(s).
https://www.linkedin.com/groups/4440229/4440229-5882268084911230980
Jason, I’m not sure whether to laugh or to cry over that. But one thing is for certain, it doesn’t surprise me. :/
Jason