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Render Unto Caesar . . .

By Art van Bodegraven | 05/26/2017 | 9:27 AM

Promises, promises.  We are now some six weeks past filing our personal income taxes.  For a moment, I contemplated risking relapse and some "me" time in rehab, but am now, in the main, recovered from the shock and awe.

In our "voluntary" system, we fail the tax obligation at our own peril. A promise to pay next week for a hamburger today, channeling Wimpy, is not currency in the IRS realm.  However, politicians of all flavors operate a hand-cranked promise machine, and we are expected to cheerfully consume their perpetual outputs.

Until the recent melee and mudslinging ad hominem attacks from demented and not-quite-bright candidates, political campaigns, for generations,  have been fueled by promises of tax reduction and simplification.  Surely we are nearly out of gas by now - fuel, that is, not the hot air of maladroit office holders and seekers.

One sheet of paper.  File on a postcard.  Lower rates.  Simplification.  VAT.  Flat tax.  Endless promises.  But, none have, to date, come to be remotely true.  Our recourse?  Absolutely nothing.  Both sides are lying through their molars.

The radical change to date, has been a redesigned individual form for 2016.  Same content, fewer lines and renumbered entry boxes.  Wow!  Reckon the IRS hired outside consultants to do that mind-blowing vision?  How long did the transformation take?

But, the potential for change in taxation could go miles beyond tinkering with what little money we have left after bellying up to higher-priced everything in ordinary daily life.

For example, we could become more globally competitive overnight with significantly lower corporate rates.  More jobs, better import/export balance, higher GDP.  Action so far? Zero.  And, wht would happen with incentives to repatriate (for business investment) money (trillions) held offshore?  Seems like it couldn't hurt.

As for import duties, tariffs, whatever we call them, the price structures at the nation's Mal-Marts, Targets, and similar would escalate.  Even modest increases would pinch the finances of the middle and lower classes.  And, big penalties on vehicles could maim or kill entire industry verticals, manufacturers, suppliers, component assemblers and providers.

Reality is that the tax situation(s) resembles Obamacare in complexity and unintended consequences.  Sorting out the details would be complex and time-consuming.

And, we do need to fix individual personal income taxes.  Brackets are too high.  The Medicare/Social Security components are woefully inadequate and perilously ineffective.  Deductions need to be rationalized - but not eliminated. The value of credits and assistance could stand a hard look.

And, the process must be made straightforward.  Dogwalkers should not have to  calculate a potential AMT.

Maybe the time for promises is over.

In our supply chain world, we have to face the impact at the consumer level of higher costs - and prices.  And, contemplate the possibility that omni-channel volumes, on-line, next day/same day delivery could be in free fall with consequences for SCM practitioners.  We also need to extend the notion to recognize that all supply chains will be vulnerable to intractable cost increases, no matter what the CFO has dictated.

Get ready.  Like Eastern Europe a few centuries ago, barbarians are at the gate.

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About Art van Bodegraven

Art van Bodegraven

Art van Bodegraven (1939 - 2017) was Managing Principal of the van Bodegraven Associates consultancy and Founding Principal of Discovery Executive Services, which develops and delivers supply chain educational programs. He was formerly Chair of the Supply Chain Group AG, Partner at The Progress Group LLC, Development Executive at CSCMP, Practice Leader with S4 Consulting, and a Managing Director in Coopers & Lybrand's consulting practice. Concentrating in supply chain management and logistics for over 20 years in his 50+ year business career, he has led ground-breaking strategic, operational, and educational projects for leading US and global clients. Art was principal co-author of DC Velocity's Basic Training monthly column for a decade, and was the principal co-author, with Ken Ackerman, of Fundamentals of Supply Chain Management, the definitive primer in the field. His popular blog, The Art of Art, has been a staple of DC Velocity's web site since its inception.



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