Red Queen and the Tax Code

I don't have an easily defined work life, but one thing I have is the Enrolled Agent designation from the IRS, so the new tax bill saga is of particular interest to me.

My dad used to always tell me, "Don't believe anything you hear and only half of what you see." It's been sage advice if not always followed. But in this case, I chose to read the Senate tax bill posted online rather than the summaries in the Wall Street Journal or any other source.

I only have a brief overview now of what might be coming. The bill is still in committee. But my first impression is that the world improvers have improved the world for their coalition of donors. We'll see what they have done for the majority when all is said and done. But I digress.

The tax code is about incentives, exceptions and deductions. It's a game all Americans have to play and the rule book stands at about 79,000 pages or so. This new addition will be impressive.

Simplified it is NOT, but I will continue to have to endure seeing that word in headlines and tweets. Tax professionals, however, are not in danger of losing any clients with the new "simplified" tax code.

Most Americans currently have a few ways to earn money. Capital gains, employee or run a business. So far, business owners seem to be the huge winners in this bill. It also looks like the C Corporation structure for business is going to get some new advantages.

Even if you're an employee, you could most likely benefit greatly by starting a business immediately. I see people calling it the side hustle. It's a good term.

I often apply the Red Queen Hypothesis to Tax Code Land. The Red Queen comes from the book "Alice in Wonderland" and talks about having to run just to stay in one place. In Tax Code Land taxpayers must constantly adapt, evolve, and search for an edge not merely to gain an advantage, but also simply to survive or maintain their socio/economic status. My inner Red Queen runs all the time to just to stay in the same place.

When the actual bill is signed into law, I will study the rules directly, read research from the the financial experts I pay, and then start running again. Crying may be included. Time will tell. 😥