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How Obama’s and McCain’s Tax Stances Might Affect the Future of Tax Software and Preparation
Jennifer Silva
http://www.zilkerventures.com
After Obama's new endorsement by the Democratic Party, people are looking to see how his platform will stack up against John McCain's, especially when it comes to taxes.
Austin, Texas (PRWEB) -- It's official-Barack Obama has sealed the Democratic nomination for Presidential candidate. And now that the public knows who is officially running for office, they can focus on the differing platforms of the frontrunners. As per usual, the economy, and taxes especially, are going to be a top priority.
Barack Obama has pledged discontinue the Bush tax cuts, to give more of a break to the middle-class and to make filing taxes easier for everyone. The platform listed on his website ("Obama's Tax Fairness Plan") states that he will try, among other things, to cut tax preparation time down to five minutes for all individual tax payers. This, he says, will be accomplished by making tax forms easier to fill out.
Primarily, he calls on the IRS to send out pre-filled tax return forms to individuals, since the IRS already has the necessary information.
What does this mean for the future of tax preparation? Hopefully, it will be a positive thing. The IRS estimates that American families spend more than $2 billion of their income on preparing tax returns, plus hours of their valuable time.
But so far, the IRS has been generally unconcerned with providing tax calculation assistance to tax payers. Though they offer electronic filing (e-file) on their website and a means for third party tax software providers to become e-file authorized, the IRS does not recommend or promote tax software options to tax payers, who are, for the most part, left to find their own means of doing their taxes.
Needing a major overhaul is the tax code itself, which must become simpler if tax preparation is going to get any simpler. A number of pundits have suggested that with a simpler tax code, tax payers could very well dispose of tax software altogether.
In summary, Obama plans: to maintain the tax cuts for everyone, except for those at and above the $250,000 income mark; to increase tax cuts for the middle class; and to raise the capital gains tax.
On the other hand, John McCain proposes to keep the Bush tax cuts in place and reduce corporate taxes. He also plans to eliminate the Alternative Minimum Tax in favor of a two-rate income tax code, the latter being simper than the former. People will be allowed to choose between the two.
CNNMoney.com reports that it may actually not be as simple as McCain suggests for people to use the new system. Tax expert Michael Graetz argues that people will double the time they spend doing taxes in order to be able to compare the new system with the old one.
While Obama gives a specific plan for the simplification of preparing taxes (reducing the time to five mintues), McCain takes a more general approach, implying that his tax plan will result in a simpler preparation process.
As either McCain or Obama will likely be elected to office this year, tax payers should see a change by the 2009 tax season. But it could be a while before the kinks are worked out. In the meantime, tax software providers won't be out of a job-at least, not yet.
For additional information regarding tax software, visit http://www.tax-compare.com .
Zilker Ventures, LLC is a web publisher that consolidates information and reviews various business and financial products.
Contact:
Jennifer Silva
Zilker Ventures, LLC
pr@zilkerventures.com
(512) 448-9031
Article submitted Thursday, July 10, 2008
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