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Thursday, May 14, 2020

13th Anniversary of the 21st Century Taxation Blog

I started this blog 13 years ago today to help promote ideas and discussion on how to improve tax systems by moving them into the 21st century ways of living and doing business and following principles of good tax policy.

Despite being 20 years into the 21st century, these topics are still needed as tax system modernization seems to move slowly despite advanced uses of technology in other areas. For example, consider the contact tracing apps being developed by Apple, Google and others that use tech features in smartphones to keep track of who you encounter so the app can let you know if anyone later (or presently) has the virus. Consider the increasing amount of technology developed for cars and other mobility tools to provide directions, monitor traffic conditions, and send alerts. These can also be used to allow, for example, our gasoline excise tax to be based on miles traveled rather than gallons of gas purchased so that even electric vehicle owners will pay for road maintenance and building.

Here are a few ideas I'll continue to explore this year:

1. Modernizing worker classification rules to reflect use of technology to enable people to find full-time employment, as well as part-time employment when there is a need to monitize one's time to generate needed cash. This is a good use of technology. Rules that require these workers, often working less than seven hours per week to be employees means they don't get to monitize their spare time because employers logically don't to go through lots of forms and filings to hire someone to work 5 hours per week for six or fewer months.

2. Improving accountability and transparency in our tax systems so more people will ask such questions as:
  a. Why is a deduction allowed for mortgage interest on a vacation home but not for other debt?
  b. Why can someone deduct mortgage interest on up to $750,000 of debt regardless of income level but the deduction for student loan debt is limited to $2,500 and not available once income exceeds a specified amount?
  c. Why do we spend over $200 billion annually to help employees pay for health insurance but do not spend the equivalent for other employees and self-employed individuals? Why not use these funds more equitably?  And, why is health insurance tied to employment? The reason dates back to the 1940s and today results in a lot of waste because the system harms normal supply and demand (as anyone with employer-provided health care knows because doctors only ask if you have health insurance rather than discuss prices and needs with you).

3. Better use of technology for tax compliance. Filing your taxes should be as easy as ordering from Amazon or similar company, or transferring money on a banking app or making a payment with Paypal, Venmo or similar tool.

What tax policy topics are on your mind?

Thanks for reading!

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