IRS commissioner doesn't file own taxes - says it's too complex
thehill.com
thehill.com
Their primary incentive is re-election. From that perspective, an unfathomably complex tax code has three points in its favor:
1. It allows legislators to avoid accountability for any tax increases. It also complicates revenue accounting, so they can propose changes to the tax code and call them "tax cuts" even if they don't change revenue much overall.
2. A complicated, arbitrary, intimidating tax code makes legislators powerful. They can grant favorable treatment to their friends and twist the arm of powerful entities that get in their way. They aren't held accountable for this behavior because of #1.
3. Accountants and tax lawyers are small groups of people who will all lose a lot if the tax code is ever simplified. They also have money and connections, so they can inflict a lot of pain on anyone who threatens their business. The public at large is too big and diffuse to force political action over its losses to tax-related friction.
A complicated tax code has one major point against. Voters don't like it. But then, this is a tax code we're talking about. Its purpose is to take away voters' money. No matter how it's organized, they aren't going to be terribly happy about it.
So is the tax code we have today really all that surprising?
I sympathized with that line of reasoning much more before reading Thoreau's Resistance to Civil Government. Now I'm convinced that he should either resign or be held as equally complicit [1].
http://thoreau.eserver.org/civil.html
[1] He should either be willing to defend the current system, or he should stop being its agent. Enforcing a law brings the same moral responsibility as writing a law.
Timely, in another thread we are celebrating Google for ceasing to be an agent of the Chinese government. We should never allow moral actors to absolve themselves of responsibility by pointing to a far-away law.
Plus if he resigned they'd just hire someone else. This isn't a position that would be hard to fill and he'd have accomplished nothing.
PS: I happen to pay a little extra taxes each year as a combination charitable donation and audit protection. As an added benefit I spend less time doing my taxes, but most people seem to dislike the idea. Multiply that savings across society and we would have both lower taxes (on average) and more free time.
Do you think Larry and Serge have a team of people to do all of their web searches?
How do you think Jeff Bezos does his holiday shopping?
This man should be doing his own taxes or he should be lobbying for tax code reform.
Such as overly complex tax laws?
Think of how horrible it would be if he did something wrong. The average American knows that if they mess up 1 box, as long as all the final numbers come out to about what they should (which is easy to check), it's likely no one will notice.
But someone will notice if the IRS commissioner messes up his taxes, even if it's just forgetting to initial a box, and it would look horrible. Can you imagine how much fun John Stewart would have with it? He'd probably be able to avoid resigning, but his chance of being nominated after Obama's reelection would be basically 0.
The salient point here is that there is no right answer to even moderately complex tax filings. Ralph Nader did this experiment a while back. The same relatively simple tax filing was sent to something like two dozen IRS offices. Each one checked the filing and weighed in on the correctness of the form. Every office said that the filing was wrong but they all came up with different and widely varying figures for what the "correct" figure should be. I suspect a large part of the reason this guy uses a preparer (software in this case) is so that even if "errors" are discovered, he can plausibly claim that he did the best he could and can expect leniency. (Timothy Geithner, white courtesy phone please.) Think you can just ask the IRS for instruction and/or definitive rulings? They get it wrong, a lot. (http://www.treas.gov/tigta/auditreports/2005reports/20054014...)
Bignum hours and dollars are spent by individuals and corporations attempting to do taxes correctly. The time suck and opportunity costs are massive.
That's more than a box, yes, but then the followup nominee, Kimba Wood, DID pay the nanny tax, and herself broke no laws, but had hired another illegal alien. The echo from the previous nominee's case, plus her 5 days of training as a Playboy bunny while a student, prevented her from being attorney general, giving us Janet Reno.
It's really hard to say which things will cause problems.
As for the rest - absolutely agree.
The other thing was the change in the NYS tax system to get rid of the IT-100 form. This form was like writing in your address and attaching your W2, and then the NYSDTF would calculate your tax and send you a bill. This was replaced with the harder-to-fill-out IT-150.
So, tax filing for most Americans, in the age of the internet, has only gotten harder. It's retarded.
Everyone wants to help the underclass but no one wants to pay more taxes to do it. So the government has to get creative about getting that money. Taking out loans, selling bonds, and getting money through sales tax, corporate tax, tourist tax, utilities taxes.
The mentality is insane, we want simpler taxes for everyone, but at an individual level we want exemptions for ourselves.
This is the last year I'm filing taxes for myself. Through a pay rise, a new mortgage and a renovation my last tax bill was shot. I was able to get help through a friend so that I paid about the same amount as last year but I know, going forward, it's going to require a professional to keep me from getting screwed.
Seriously, that is why it hasn't been simplified.
No. It's Congress. We will never have a simplified tax code, ever. Not a flat tax, not a fair tax, not a VAT, nothing.
Because Congress will never give up the power to give and take tax breaks. It's the power to give tax breaks and pork that keeps the pig-trough filled to overflowing.
Shouldn't confuse usage with fixing.
Would it be possible to streamline taxes in USA? Would it not be interpreted as "making it easier to collect even more taxes"?
It depends. If you reduce the complexity of the tax system, thus reducing the required size of the tax agency, many of the same people who are anti-tax (or rather pro-lower tax) would be OK with it, because they would see that as streamlining the government.
The common idea seems to be that the tax code is very complex because there are so many add-ons to allow you pay less tax. Most US federal income tax payers can choose a simplified option, but they will not pay the minimum amount of taxes.
People, who for example think federal income tax is illegal, comprise a small enough group that they couldn't prevent simplifying the system (or any change for that matter).
A decade or so ago they decided to thoroughly sort out the tax law. Most small businesses are able to fill out their own tax (I did for years). It's about a page of information - all nicely coloured & well explained. Basically idiot proof (yes yes, I know).
Private individuals? Now things are at a point where you don't even NEED to file a tax return. Income tax is taken by your company & filed with the IRD, so unless you have extenuating circumstances, they know pretty much exactly how much you owe/are owed.
It's an absolute dream filing there, compared to anywhere else I've been.
Oh, & if you have any questions about any part of the law? They have helpful, clear pamphlets that outline all the details you need. Available over the web too. It's very cool.