Tax return absurdity


Late last week, one day before the deadline, I submitted my personal return for 2015.

Now, in light of what’s gone on with Trump’s return, I think I should begin by noting that, as an “active real estate investor”, I probably get more tax breaks than anyone. So I’m not in any position to complain about how much tax I pay.

But I do have a bone to pick with the system, and that comes down to the difference between the federal and CA returns.

I get why the state would want to treat income and expenses differently from the feds. For example, the feds allow for accelerated depreciation and the state may just decide it doesn’t want to participate in that particular give-away to the real estate industry. Another example: CA doesn’t buy into the feds’ decision to tax capital gains at a lower rate than earned income (another give-away, this time to rich people).

But the result of CA making its own decisions re this kind of stuff is basically doubling the amount of administrative bullshit everyone has to go through at tax time. And thereby the doubling of the cost involved in preparing your returns.

So, because CA has different preferences than congress, we kind of have sneakily developed a “full employment for CPAs”-type situation.

Instead, why doesn’t CA just accept the feds’ determinations and then adjust its rates to generate the required amount of tax revenue? The state would get what it needs while lessening the burden on the taxpayers.

Simple, right?