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Oliver Wendell Holmes once said, "Taxes are the price we pay for living in a civilized society," but the tax system in the United States has long since abandoned any pretense of civility.
I don't begrudge the US government my money. Indeed, I consistently vote for candidates who aren't afraid to raise my taxes to solve the problems of our day; but the tax code has just gone too far. The US Tax Code consists of 6.9 Million words. Printed on standard printer paper, that represents 138 pounds of Tax Law.
Our taxes cover strange and highly specific eventualities with loopholes that require diligently laboring tax attorneys to even locate, let alone exploit. From renting tram cars to Dusseldorf to the inner workings of depreciation of assets, few Americans do their own taxes anymore, and fewer still understand them.
In large part, the ability for special interests to push major cuts, breaks, and loopholes through the Congress comes fro m the sheer complexity of the tax code. There's just no way to sum up the dry and dizzying complexities of a subtle change in offshore profit reporting in a thirty second newsbite. Without media attention there is almost no public reaction, and in the end our supposedly progressive tax code is written by those that have the most to gain from a regressive taxation system.
So what can we do about it?
First, the tax code needs to be simplified. Proposals like the Flat Tax, the Fair Tax, and others of its kind unfairly place the burden of taxation, either directly or through a subtle withholding procedure, upon the poorest of Americans. Ultimately, an income tax system need not be complex - we have just chosen to make ours that way.
First, we need to junk the entire tax code every 10 years. This would coincide nicely with the census, which would mean that percentages and tax brackets could be updated to reflect the changing realities of the American population. A tax code with a ten year lifespan would prevent the accumulation of complex structures and keep lawmakers accountable to tax payers for the tax loopholes and shelters that the law affords.
Secondly, we need to eliminate many of the annoying hassles that make Americans dread tax day so much. Simplification of forms would go a very long way to solving this problem - though a more innovative approach would be to adopt the software based solutions like Turbo Tax.
Food for thought: why can H&R Block grantee accurate results but the Federal Government can't provide me with a tax form I can accurately fill out on my own?
While we're addressing the issue of a user friendly tax system - submitting and paying taxes should be a bit less painful as well. E-filing is a nice touch, though about 10 years too late. For those still submitting on paper, why does the taxpayer have to pay postage to pay taxes?
With all the talk of smaller government and leaner budgets proposed by the Right (though less so these last five years) the continued growth and increasing obfuscation of the US tax code remains a baffling mystery.
Step up Republicans! Let's see some of that old-school Small Government Conservatism! With control of the House, Senate, and the White House - there's no reason real tax reform can't be enacted.
