The Challenges of Taxation

One thing the Tea Party has right is that less government is better.  The problem with any bureaucracy funded by the public is that it has a life of its own.  The idea of getting smaller is an anathema to the employees who work in the government; thus adding fuel to the fire in the fight we’re presently seeing in Washington D.C.  And since bureaucrats/regulators are frequently much more influential than the legislators (who can be voted out of office), they begin to find ways to interpret the legislation which may not be its original intent.

Case in point is a recent “dust-up” we’re seeing in Texas with the Texas Comptroller’s office.  A field auditor has decided that USPS postage should be treated as transportation and is revenue to a mailing service provider – with no offsetting expense.  This is a 1% tax on the top line.  Not a pleasant thought if you are in the mailing business in Texas.  Oh, don’t forget that if one state starts using this methodology successfully, others will follow.

PIA MidAmerica is in the process of working with the taxpayer/mailer and his CPA to find a way to bring logic into this discussion with the Comptroller’s Tax Policy experts in Austin.  More to come.

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