Friday, November 9, 2007

QUESTIONS ABOUT LAWYERS AND ACCOUNTANTS

My friends and relatives tend to e-mail me with questions rather than ask them under comments in the blog. I thought I would pass this one on for discussion. The question:

"My fear is that the accountants and lawyers will gang up on us because they will be losing lots of jobs. Or is there a solution for this?"

The answer (one or two anyway – you guys can probably think of more):

The accountants will be very happy to give up their work trying to figure out the 60,000+ pages of the IRS laws and concentrate their efforts on helping their clients make smart investments with the extra money they will have. Many accountants will turn to investment counseling.

Many tax attorneys will turn into investment attorneys or any one of the many other ways attorneys have of making money.

There will be lots of work for both accountants and attorneys. The economy is projected to grow with the FairTax, businesses and manufacturers will come back to the U.S. from overseas and there will be an abundance of jobs. These new wage earners will need advice on how to spend their money, among other things.

Read chapter 12 in “THE FAIR TAX BOOK” by Neal Boortz and John Linder. In this chapter, he discusses the impact on tax attorneys and accountants, plus the impact on the many people who work for the IRS. He puts it much better than I can.

Please, if there are any Tax accountants or Attorneys reading my blog, weigh in and tell us your thoughts on this subject. Thanks.

6 comments:

Anonymous said...

I have been looking for an endorsement from pro-Fair Tax radio personality Neil Boortz, of pro-Fair Tax Presidential Candidate Mike Huckabee, and I found this from Neil's site dated Oct 30.
[url=http://boortz.com/nuze/200710/10302007.html]Mike Huckabee .. proud of his record in Arkansas. This is the guy I would vote for if the election were held today.[/url]

Unknown said...

Just a few thoughts on Fair Tax. First concerns the professionals working in tax, particularly with regards to accountants (my background). I think it is quite an assumption to make that people will just "find work". There are plenty of professionals who have spent entire careers specializing in tax work, this plan would effectively make hard earned careers obsolete. Not to mention the folks at the IRS doing... food stamps?

Further, I believe an increase in prices, particularly to this extent, risks driving down demand. Granted, people have more money coming in, but it makes sense that they will be more reluctant to spend it. With out current tax code, our taxed income is not an option. Now that it is, good luck finding as many people to buy Mercedes and other luxury goods.

My point is, it seems unlikely that the risks outweigh the benefits. It seems the motivation behind this is to force the wealthy to pay their share and to reduce our own waste.

Well, I personally don't mind the wealthy being wealthy. Dreams are powerful, there's a reason we have shows like cribs and lifestyles of the rish and famous. Thats capitalism - thats motivation.

Further, waste is going to exist in a government supporting 300 million Americans and the greatest country in the world.

In practice it sounds good, but the benefits seem to be offset by the adverse effects. The risk of revamping our entire tax code is not worth it.

Anonymous said...

"Happy to give up" the work going through the 60000+ tax code? Please, it's because of our speicialization in being able to do that, that we have careers in the first place. Secondly - helping our clients invest wisely is the work of their financial planners not their accountants. You've got to be kidding me, the fair tax will cripple the accounting world overnight and put literally 10's of thousands of people on the unemployment roles - it's not a good idea if you want to have an economy that maintains a low unemployment.

MARK said...

Don't worry about the fair tax stopping anything. First -- its glaring flaws will be so obvious that it will never be passed.

Wait till some congressional hearing, when the CFO of FORD or GM explains how the fairtax would destroy their business with a huge sales tax.

Wait till you get cancer victims to testify that they can't pay 40% sales tax on their cancer surgery.

Wait till you get insurance executives up there that say they aren't going to pay the 40% sales tax on leukemia or any illness.

Wait till you get people making 30,000 a year, tell how they would be charged 50,000 in "sales tax" if they had a huge medical bill.

Wait till renters tell how they don't want to pay 40% sales tax on their rent.

Wait till economist tell how you can't really make the federal government pay itself 500 billion dollars.

Wait till people find out all their insurance premiums -- car insurance, health insurance, home owners insurance -- would get a 40% sales tax.

SOme people would be taxed 10-100 times as much.

Wait till fairtax supporters say you could save SO much --just buy used. Then the person is asked if they ever heard of used gas. Or used rent. Or used cancer surgery. Or used food. Or used car insurance.

Fairtax will be exposed as a farce, long before its passed.

Anonymous said...

I really like the fair-tax on a personal level but I have to wonder what kind of effect this will really have on Tax accountants and Software companies such as Intuit that generate a large amount of their profits from software like Turbo tax. The tax industry generates a lot of money for the economy and such a radical change really would put 10's if not hundreds of thousands of people out of work overnight. It may help grow the economy in the long term but I think it would take years to get over the initial shock it would have to our country's unemployment rate.

Anonymous said...

"Wait till you get cancer victims to testify that they can't pay 40% sales tax on their cancer surgery.

Wait till you get insurance executives up there that say they aren't going to pay the 40% sales tax on leukemia or any illness."



First of all, it's not 40%. It's 23. Also, the tax would only be levied on the premium paid to insurance companies. Goods or services bought on behalf of an insured policy holder are not taxed.

So yes, you would pay an extra 23% premium on your health insurance, but the resulting services or operations purchased by your insurance company are not taxed. That $40,000 cancer treatment is purchased tax-free by the insurance company.

Furthermore, take into account the savings that insurance companies will experience under the fair tax. Those alone would allow them to lower the necessary premiums, probably enough to offset your 23% tax.