|December 9, 1999
Volume 30 Number 10
|A publication for the faculty, staff, administrators, and friends of California State University, Chico|
Chico Professors Talk Tax to Millions
Two tax advisers to millions of educators across the nation reside right here at CSU, Chico. Bob Fischer, Economics, and Brad Glanville, Child Development are the authors of Educators Tax Guide, 2000 Edition, and "Tax Talk, " a column which appears in American Teacher and On-Campus, publications which reach over 1,200,000 educators ten times a year.
For ten years Fischer and Glanville have translated "IRS-speak" and presented complicated tax laws in a way that is easy for educators to understand and apply. And they must be doing it well, as both the American Federation of Teachers and the National Education Association recommend the guide. Approximately 100,000 copies of the 2000 edition will be printed, and 700,000 copies of the guide have been sold in the last ten years.
Most educators, according to Glanville, find taxes so frustrating they simply have given up trying to figure out how to legally minimize what they owe in taxes. The result is that they routinely overpay their taxes.
This is a serious problem for most families where taxes represent 1/3 of a family's disposable income. Glanville, who teaches classes in marriage and family relations, said that his interest in collaborating with Fischer on the tax guides came out of his lectures about family finances and the ignorance young people, especially, had about the tax system.
Fischer, an economist whose area is public finance, was interested in taking the tax theory he taught and making it available to a more general public. "Most people," he said, "think that the only thing that taxes do is raise revenue. That makes them reluctant to minimize their taxes. Many people see it as almost "immoral" to do so."
Taxes, explained Fischer, affect income distribution and allocation of resources. They act as "social engineering." For example, if a group of legislators thinks that it is a good thing to own a house, then tax incentives can be provided to make that possible for more people. I [as a legislator] can make you to buy more of this and not buy that, depending on how I tax it."
Tax laws, as they exist, have gotten where they are by a very circuitous route. They are not clearly and logically designed with the individual citizen in mind. On the contrary, they are complex and often make little sense. "The idea that you are going to simplify them is absurd," said Fischer.
What Fischer and Glanville try to show people is that, "If you can understand smart tax planning, then you can minimize your tax payments at the end of the year. A tax preparer can only work with the information that you provide him. It is an ex-post' activity. Too many people think that the tax preparer is going to work wonders. You have to do it for yourself; you have to make it a prospective activity, anticipating transactions and knowing what options are available."
In a column printed this fall, "Tax laziness is expensive," Fischer and Glanville addressed ways that educators lose money by not expending the effort to understand basic tax laws. One example is not reporting long-term capital gains distributions from mutual funds on the correct "Schedule D." If they are reported on the front side of the 1040 form under "dividends," they will be taxed at the highest possible rate rather than the lowest. And, although this is an obvious error to the IRS, they keep the money unless the taxpayer files an amended return.
In the same column, they discussed tax shelters, automobile use, and the desirability of finding a tax preparer familiar with tax deductions for educators.
With wit and humor, Fischer and Glanville attempt to make a painful subject accessible. They say they have fun doing the work as they come up with interesting examples in the guide and keep track of some of the more absurd tax instructions. It helps keep things in perspective. It is difficult to take a tax "service" seriously that issues the direction, "Check here if you are blind." -- KM
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