Happy April 15! Yeah, right.
In the Wall Street Journal today, John H. Cochrane, a professor at the University of Chicago Booth School of Business, argues for an Alternative Maximum Tax. Add up all the taxes you pay – Federal income tax, Social Security or Self-employment taxes, the new Medicare surcharge, state and local income and sales taxes, property taxes, unemployment taxes, real estate transfer taxes – you name it, you include it. When you reach 50% of your income, the Federal government starts to give you back money. I like it, but it will never come to fruition. It makes too much sense.
I was reminded again this year that a business really should keep a double entry set of books. The first codification of the system occurred near the end of the 15th century by the Franciscan Friar, Luca Pacioli. While it is certainly not foolproof, a set of double entry books is a pretty good error detection system. I predict the system will be around for at least another 500 years, if not forever. It is not that difficult to implement. Quickbooks makes it easy.
By the way, Quickbooks is dangerous. I am not saying that I don’t like Quickbooks; I am just saying that it can be dangerous. When I was younger and more foolish, I liked fast cars and wild women, even though they were both dangerous. A person can make the silliest entries into Quickbooks and it obeys blindly. I think Intuit should build in a diagnostic message for when somebody thoughtlessly throws in some numbers. It does not have to be a sophisticated analysis or explanation. Maybe Quickbooks could show on the screen and emit an aural message: “That is really dumb!” Just a thought.
So, tonight if you see semi-lifeless creatures shuffling in the dark around midnight, they are not the Living Dead. They are tax professionals at the end of a long hard busy season.