I have just finished doing my taxes and I can feel my blood pressure spiking. This is one activity that makes my blood boil. It’s not that I mind paying taxes; I know they are necessary to keep things going. Nor is it that I’m put out by the unfairness of the tax code ; I know I have to live with it. No, what drives me nuts is the complexity of the tax forms and the difficulty of filling them out.
Each April as I wrestle with the taxes I get the feeling that a bunch of CPA’s are looking over my shoulder waiting for me to make a mistake. They know it’s only a matter of time before I do. How can I not? Consider the instructions for the Qualified Dividends worksheet.
Subtract line 5 from line 6. If zero or less than zero, enter -0-
Subtract line 6 from line 1. If zero or less than zero, enter -0-
Enter the smaller of line 1 or line 8.
After filling out these numbers , many of which result in a zero, and after going through four more lines I wind up on line 16 with the same amount I started out with on line 1. Why? Why? Why the distinction between qualified dividends and ordinary dividends? Dividends are dividends… make them all the same and spare me these calculations which make my head go round and round.
And what’s with all these decimals? Multiply Line 3 by 92.35% (.9235). Why? Why not make it a nice round 90% (.90) or even 95% (.95)? It’s cruel to make me deal with decimals to the fourth place. As I tear my hair out in frustration, I feel that somewhere out there the rotters who came up with the tax code are cackling with glee, giving each other high fives and going ” Gotcha!” I am convinced that the tax laws were devised by accountants with only two goals in mind. One, to tie poor schnooks like me in knots and two, to make themselves indispensable.
What we need is a simplified tax code. And , by simplified, I mean one that’s really simple. One that will take a high school graduate only five minutes to fill out his tax return. It’s easy to come up with such a code. Only I wouldn’t entrust the job to our lawgivers. Every time they simplify the tax code, they make it twice as complicated and double the number of tax loopholes.
If I could, I’d like to sequester our lawmakers in their offices and make them do their own tax returns. They would have access to all their documents and a simple calculator and all the time they need to figure out their taxes. No TurboTax. Of course, until they finished their returns, they would not be allowed any food or drink. What’s that you say? Cruel and unusual punishment? Well, OK… they could have all the water they wanted to drink , but no going to the bathroom until they finished their returns. Still think it’s cruel? Well, maybe so but , at this moment, having just struggled with my own taxes, I’m not feeling too kindly towards them. Two days of this and they would be ready to throw in the towel and agree to let me devise a new and improved Tax Code.
My tax code would be simplicity itself. All income would be taxable. No distinction would be made between earned income, dividends and capital gains. Income is income. Why allow preferential rates to investors? There would be only three income groups. The lowest group would be taxed at 10%, the middle one at 25% and the high income group at 35%. Since there would be no phony write-offs, and entire incomes would be taxed, there would be no scope for the boondoggles available to high income filers. Heck, even though the top rate was only 35%, we would probably be able to balance the budget the first year itself.
There would be other benefits to my Simple Tax Code. Everyone would be able to do their own taxes in a matter of minutes. There would be no need for professional tax preparers or $ 1000/hour tax lawyers. CPA’s could use their skills to keep the books instead of dreaming up ways to beat the tax code. So many of them would be out of jobs that they could use their skills to proper use. Since they all are very good at math, they could be put to work teaching our high school students whose math skills are among the worst in the developed world.
The essence of my code is its simplicity. Without write-offs and deductions, there are no opportunities to exploit loopholes. The only deductions allowed under my code would be for dependents, say $ 2,000 per dependent. The more I think about my tax code, the more I like it. It’s a stroke of genius, if I say so myself.
Of course, human nature is such that no sooner a law is promulgated, people try to find a way around it. In the case of my tax code, people would soon figure out that the only way to put one over would be to increase the number of dependents. They would try to emulate the Duggars, that couple in Alabama who have nineteen children and counting ( and their own TV show besides). In no time at all we’d have a population explosion and added strains on the social services. I could limit the number of dependent exemptions to two or three but that would result in a big howl that the government was infringing on reproductive rights.
My tax code would work like a charm … for about nine months.
Doing Taxes…. Grrr !