This week, I’m scheduled to meet with Rocco, my faithful tax preparer for the past 26 years. Every February, we meet under the historic clock in Grand Central Station during the morning rush hour for the ceremonial exchange of my tax organizer.
It’s sort of a solemn ritual, where after few opening pleasantries are exchanged, we both go on with our business.
In keeping with that tradition I always keep my fingers crossed that some small refund will emerge at the completion of my 1040.
However, while death and taxes are certain, I can also bank on that the refund largesse, whatever the amount, will be preliminarily spent by my spouse and daughters long before it ever reaches my wallet.
Recall the opening credits of the classic 80s TV comedy “Married with Children” when Al Bundy, the hapless the shoe salesman patriarch of the downtrodden Bundy family holds out a handful of money and each member in turn extracts a portion of it. For those of you who have children in college or those whose sons or daughters have graduated but remain on the family payroll, I’m sure you can relate.
And while we’re on the subject of taxes, I was asked just the other day whether under this new administration, we’ll finally see some changes to the tax code, despite years of promises and abandoned strategies for IRC reform.
Now with all the other controversy surrounding the new Trump administration, tax reform has, for lack of a better term, taken a back seat. The 45th President has proposed a top rate of 20 percent with the theory being that with more money in their collective pockets, both businesses and individual taxpayers will begin spending those additional funds.
As noted above that excludes me no matter how large a refund comes my way.
But one of the dangers of this plan according to minds far brighter than mine is what happens if the extra money is not earmarked for goods and services but rather to pay down personal debt or in the case of a public company, used to repurchase their stock?
Neither course of action will really help stimulate the economy.
Another shark at the shipwreck will come if Trump boosts spending on infrastructure projects as he has promised which will only increase a ballooning deficit if there are no additional revenues coming in to offset a dwindling amount of tax collection.
But all this remains to be seen because you and I have watched this movie before – several times. Pledging tax reform remains a terrific sound bite when you’re campaigning, but when it comes down to rolling up your sleeves and dealing with the red sea of lawmaking bureaucracy, changes to something that runs over 1 million words are something else.