In broader terms, what I would suggest is that more people need to become more financially literate. That, in itself, would advance the average American's financial well being more than anything else. I don't think that it's necessary for the average person to become a CPA. Our tax system is (overly) complex. Agreed. But I've met far too many people over the years who have confused tax withholding with taxes paid. Whether it's overtime for hourly wage earners or bonuses for salaried individuals, when people see that large (one time) chunk taken out of their check, many think that they'd be just as well off not having gotten that money. I've dealt with hourly workers who have turned down generously paid job assignments (if you do an extracurricular job for me, I pay overtime rates to inhouse employees) because they felt that the overtime would be so heavily "taxed" that it didn't make sense to take the assignment... so I've given that work to outside contractors. The amount paid out is the same for me/my budget. So I'm not going to try to ***** money into someone's pocket. As long a the job gets done, I don't care. I'll make one attempt to take care of the home front and then I'll start shopping outside. This happens simply because they don't understand that you pay taxes based on your annual earnings - the periodic withholding means nothing in the greater scheme of things. Withholding software takes atypical amounts into account and will withhold a higher amount, that's all. If you make $70K a year and you get it all in the first pay period of the year, your withholding will be outrageous, because the software will assume that you're going to make make that amount every pay period = $1.8 million/annually (if you get paid every two weeks). Whereas if you got the $70K in 26 equal installments, the withholding would be normalized.
So, (admittedly) a lot said, just to say that Americans (and others) need to have a better understanding of the rules of the road when it comes to taxes and their overall finances. People get ripped off on loans, insurance, investments, banking products and all manner of other financial matters simply because they do not have the necessary knowledge to make sound financial decisions. Putting your financial well being into the hands of some faceless, disinterested government bureaucrat is not the answer. Knowledge is always the best answer, IMO.
