Feel free to distribute
- The Tax Accountant and the FairTax: Compatible Indeed.
In the early seventies, I chose accounting as a college major not merely
because the starting salaries were among the highest in the nation, but
because I rightly saw that being proficient in the "language of business"
would prepare me for so many directions in my career. In 1986, two things
happened: one was the passage of the Tax Reform Act. The other was my
personal entry into the field of financial planning that ultimately led me
into investment advisory services. Lamentably, I did not immediately let go
of the tax practice that provided so much security to my family. Instead I
held onto it for about 10 years. I can now look back and say that the very
best business decision of my career was to finally give up tax prep in 1997.
It was then that my other business was able to truly flourish and it did so
within a year. Have I had to give up all that I learned as a tax
practitioner / accountant? Hardly.
What I learned very well was that the first rule of investment is
diversification. The reason is the mitigation of diversifiable risks. One
of those is regulatory risk. Nearly all businesses have some risk that one
of the governments can cause it great damage at the stroke of the
legislator's pen. In my opinion, the tax-preparation business has always
been, and remains, an example of extreme regulatory risk. The continuation
of the business is very dependent upon the perpetuation of the tax code-the
more complex, the better for that business/industry alone. Any industry
who's very existence is created and maintained solely by regulatory fiat is
not really a business and will eventually fade if democracy rules. One that
fulfills human and societal need will flourish.
Whether Fair Tax (H.R. 25) passes or not, it would be smart for all tax
practitioners to diversify their investment in their careers. Nearly all of
us who have mastered one of the more difficult curricula in college and then
passed one of the most rigorous professional exams known to humanity are
smart enough to do many things. In the repeal of the tax code, little or no
re-tooling would be necessary for a tax accountant to shift his or her
priorities to that of capital creation through improved profitability. Let
me explain. In our capitalistic society, the true goal of any business
enterprise is making a profit. From Wall Street to Main Street, business
people become obsessed with increasing their profitability from one quarter
or one year to the next. This goes far beyond the mere reduction of
expenses (including taxes). It runs to the very heart of business and the
measurement of it rests primarily with accountants.
To pose the threat of loss of jobs in the tax prep industry as a reason to
resist passage of Fair Tax, is analogous to the buggy whip manufacturer who
resisted the introduction of the automobile. Whether you view it from a
micro point of view (being good for the citizen) or from a macro view (being
good for the nation), Fair Tax has, at its core, a promise for us that far
outstrips the potential of the automobile to do good for our nation and its
Scott Neal, CPA
P.O. Box 2010
Lexington, KY 40588
Get The FairTax Book today! Attend a Congressman John Linder and Neal Boortz
book signing near you!
Please visit http://www.fairtax.org/boortz_book.html