There’s No Accounting About Taxes
I dropped by to see my accountant, Willard “The Shark” Houdini. He was in a most jocular mood.
“I’m celebrating,” he said.
“Let me guess,” I said. “You finally had a client to survive an IRS audit?”
“Very funny,” he replied. “What I am celebrating is the new tax bill. Have some champagne?”
I declined. Never accept an offer of champagne from an accountant wearing a sky blue leisure suit. That’s one of the first things you learn in Economics 101.
“Pardon my ignorance, but I thought accountants were going to lose business because of the new tax bill, which was supposed to simplify how we do our taxes.”
“Are you kidding me?” said Willard. “Have you ever known anything to come out of Washington that was simple?”
He had a point. Election-year tax bill
“Listen,” he went on, “this new tax deal is the best thing to happen to accountants and lawyers and financial consultants since the three- martini lunch.
“Nobody has any idea how this new tax thing is going to work or how they are supposed to find the loopholes in it.”
“But,” I interrupted, “I thought the new tax law was supposed to do away with loopholes.”
“Do away with loopholes? That would be un-American.”
I was confused.
“Let me tell you what all this is really about,” said Willard.
“In the first place, it’s an election year and nobody is going to vote against tax reform that allegedly will lower taxes. So here’s what’s going to happen: Real estate tax shelters, where rich people hid their money, will become obsolete, and the tax liability for people who make a lot of money will increase and big companies will owe a lot more taxes, too.”
“That’s what I thought,” I said.
“You don’t understand,” said Willard. The poor will pay
“Rich people who can afford the fees will go to see their accountants or financial consultants and lawyers to see what they can do about lowering their tax liability and some smart cookies will find a way.
“As far as the big companies are concerned, they simply will pass along whatever increase they have to pay to their customers.”
“But aren’t the poor people getting a tax break?” I asked.
“Sure,” said Willard, “but don’t forget this. Not only will prices for goods go up, but there will be a slowdown in construction of say, new apartments, so apartment owners will be able to go up on their rents and the poor will still get the shaft.”
“Isn’t there something that can be done about such an inequity?” I asked.
“Of course,” explained Willard. “This time next year there will have been so much griping and complaining and lobbying that the big companies will get their tax breaks back, and well-off individuals will be back in the tax shelter game. It’s just a matter of time.”
“And the poor?”
“They aren’t my problem,” said The Shark, guzzling another swig of champagne.