Jewish World Review April 15, 2002 / 4 Iyar, 5762
http://www.NewsAndOpinion.com | April is the saddest month, mixing -- no, not memory and desire, as the poet said -- but taxes to be put in the mail and, even more irksome, tax returns. Awash in a sea of paper, or maybe in electronic impulses in this internetted age, the American taxpayer needs ... Help!
Most of us don't object to paying our taxes -- living in the United States of America is not only a privilege but a great bargain. What we object to, or should, is how hard, how complicated, how expensive and sometimes just plain hopeless it is to figure out how much we owe.
A sweeping tax law enacted last year -- always called a "reform" -- made the job even more complicated and, if possible, more confusing. The law included 441 changes in the tax code. Just one of them -- about how to claim a tax rebate if you didn't get one last year -- has generated a million errors on that one line of people's returns. At last count.
Even the secretary of the Treasury, a refreshingly plainspoken guy by the name of Paul O'Neill, has called the tax laws "an abomination" full of "absurdities."
That won't come as news, but it's good to have an administration that will acknowledge it. Now if it will only do something about it. Like scrapping an Internal Revenue Code that by now has grown as indecipherable to the average American as Hammurabi's.
Despite the perennial foofaraw in Washington about whether and how much to cut taxes, what really drives people nuts is the paperwork, the record-keeping, the uncertainty. Even if folks have an accountant, and by now 80 percent of us use a tax preparer or at least a computer program to figure out how much we owe, it's still a wearing process.
For the average American family, filling out a tax form has become like attacking a puzzle to which, often enough, there is no right answer. But we're all supposed to swear, on penalty of perjury, that we've done our best to find it. It's enough to take the bloom out of April even in these dogwood-blessed latitudes.
Last year about this time, a businessman friend was telling me that what really got to him wasn't having to pay his taxes, but how long it took him to understand -- well, to try to understand -- the computations his accountant had made. These days you need an accountant to explain the accountant. No wonder Enron got away with it for so long. Complexity is the enemy of justice.
This whole, involved system collects trillions, but at the cost of billions. A vast industry of tax collectors, tax accountants, tax planners, tax lawyers, and tax lobbyists has grown up to deal with the intricacies of the sprawling Internal Revenue Code. Imagine what useful work all that intelligence could accomplish if freed!
So just how bad is the current system/maze/puzzle? This bad: Most folks may have only the vaguest assurance that their return won't conflict with some twist, turn, regulation or vague intimation hidden away in the 17,000 pages of convoluted numerology that comprises the Code and maze.
And the blamed thing keeps expanding with every "tax break." You can't escape it even by dying, thanks to the death tax -- which needs to be put to rest at last. Half of all Americans now pay a professional to do their taxes. Think of how much all that brainpower could accomplish if liberated to do constructive work.
Often enough not even the pros can agree on the right answers to this intricate puzzle. Every year, surveys find a wider and wider disparity between answers to the same tax questions. One year somebody monitored the performance of the IRS' hot line, and estimated that the IRS gives out more than 24 million wrong answers a year -- that is, if there is a right answer to some of these conundrums. According to the IRS, taxpayers who called its toll-free number for help in fiscal 2000 got a wrong answer one out of every four times.
But why blame the IRS for being as confused as the rest of us? The big problem isn't the IRS but the complexity of the tax code itself, which has grown like some monstrous Topsy over the years. It keeps being changed, expanded, and further confused, usually to reflect the demands of the latest powerful interest. Until finally it surpasseth all understanding.
Is tax reform the answer? It's more like the problem, since every reform tends to complicate tax law only more. And the longer and worse the tax code gets, the less chance there is of really reforming the thing.
That's because so many interests have so much riding on so many provisions tucked away in the small print. The loopholes lurk like little nooks and crannies in a vast Victorian warren of sections, clauses, amendments, schedules, escape hatches and death traps.
At last count, the IRS offered at least 943 different tax forms totaling 12,933 pages of close-set type. Even the "simple" Form 1040 came with 117 pages of instructions. And every year this maze of forms seems to grow larger and worse.
David Keating of the National Taxpayers Union estimates that Americans put in a total of more than 6 billion hours a year trying to complete their tax returns and keep up their tax records.
Maintaining tax records accounts for 80 percent of all the paperwork in federal government. And nobody can know how much time and effort Americans invest in making business decisions based on how best to minimize their taxes -- decisions that skew the whole economy. There ought to be a better economic goal in 21st Century America than tax avoidance.
What to do? Don't mend it, end it. Abolish the tax code and start all over. Think about it: Would anybody starting from scratch come up with a system as indecipherable and counterproductive as the one we've got? So why not opt for a clean break with the past? Abolish the Internal Revenue Code and begin anew.
But would that be fair? Well, one thing this current complex, loophole-riddled tax system isn't is fair. Even a flat tax, if it didn't start till incomes reached, say, $30,000 a year, might be fairer than the monster we've got on our hands now.
A simple tax form -- one that would fit on a single page for most folks -- will remain only a dream if there is no pressure to change the current system. And this being an election year, now's the time to apply it to our politicians.
Don't mend the current system, end it. At a time certain. Say, December 31, 2004. At midnight that day, the sun would set on this whole encyclopedia of complexities. The government would have until then to come up with a simple, fair substitute.
To rephrase a thought from Dr. Johnson, nothing so wonderfully concentrates the mind as the prospect of being executed. Put the Internal Revenue Code out of its misery, and the way to a simpler, fairer system might become clear to all those bureaucrats who say it can't be done.
We'll be told that now is no time to fiddle with the tax system, not with the economy just beginning to rev up again.
And when the economy gets up to speed, as it will sure as there is a business cycle, we'll be told that now is no time to fiddle with the tax system because everything is going so well.
In the end nothing will really change. And this whole, cumbersome apparatus will grow still more cumbersome. That's why there is no time like the present to abolish the Internal Revenue