Jewish World Review April 17, 2001 / 24 Nissan, 5761
http://www.jewishworldreview.com -- APRIL is the saddest month, mixing -- no, not memory and desire, as the poet said -- but taxes and, even more irksome, tax forms.
Despite the perennial foofaraw in Washington about whether and how much to cut taxes, what really drives people crazy is the paperwork. Even if folks have an accountant, and by now 80 percent of us rely on a tax preparer or at least a computer program, it's still a wearing process. It's like attacking a puzzle to which, often enough, there is no clear answer. It's enough to take the bloom out of April in even these dogwood-blessed latitudes.
Last year about this time, a businessman friend told me that what really got to him this time of year wasn't having to pay his taxes, but how long it took him to understand -- well, to try to understand -- the computations involved. I don't think he ever did.
The 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 Internal Revenue Code and Great Mystical Secret.
So just how bad is the current system/maze/puzzle? This bad: Most folks can have only the vaguest assurance that their return doesn't conflict with some twist, turn, regulation or vague intimation hidden away in the 17,000 pages of convoluted numerology that comprise the Internal Revenue Code. And the thing keeps expanding with every "tax break.'' You can't escape it even by dying, thanks to the death tax.
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 the pros can't even 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 -- if there is a right or wrong answer to some of these conundrums.
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 -- 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 comes with 117 pages of instructions.
David Keating of the National Taxpayers Union estimates that Americans now 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.
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 end it?
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 more progressive in its effect than the monster we've got on our hands now.
But 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.
That's why the Internal Revenue Code doesn't need to be changed but abolished. On a definite date. Say, December 31, 2003. At midnight, this whole encyclopedia of complexities would be repealed. 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 in two years.
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.
But now, we're told, is no time to fiddle with the tax system, not in this uncertain economy. And when the economy improves, as it will sure as there is still a business cycle, we'll be told that now is no time to fiddle with the tax system because everything is going so well. And this whole, cumbersome apparatus now on the back of the American earner and taxpayer and family will only grow more cumbersome.
That's why there is no time like the present to abolish the Internal Revenue