Significantly Simplifying The U.S. Tax Code, And Other Hopeful Myths

Determining the length of a book is a simple matter . . . just open the back cover and look at the last page for the answer. Not so with the U.S. tax code, apparently. Google the question, "How many pages in the tax code?" Many answers appear. It could be as many as 75,000 pages, or just a few percentage points of that number, depending on who is answering the question and the motive for obtaining your acceptance of the answer. However, according to an official IRS site (see link below) regardless of the number of pages or words, the code is unbelievably confusing . . . even to so-called experts. And consider the following statement, "The hardest thing in the world to understand is income taxes."--Albert Einstein What got me going on this subject is the promise made by virtually all presidential contestants, and many others running for elective office in jurisdictions nationwide, to reduce the size of the tax code, thereby making it easy for taxpayers to comply with their financial obligation to their government. Some persuasive solutions suggest the tax code could and should be written in just a handful of pages . . . or even confined to the few lines available on the back of a post card. It sounds good to voting taxpayers. But will it happen? Who decides if it happens is the critical issue . . . and the question you should consider as you ponder the answer.

At least one presidential contestant got it right by explaining how the current tax code is government's contrived method to control people and their behavior. That erudite contestant explained it thusly (paraphrasing), "Government takes too much of your money, earned through work or investment, and then offers to return some of it in dribbles and drabs if you do those certain things that please the government (read: your elected politicians)." Surprisingly, the IRS web site referred to above even admits that is the case. More on that later. Consequently, reducing the tax code to an understandable number of pages or words will reduce, maybe even eliminate, the government's ability to control the populace. Uh oh! Now that you know this to be trueyou can speculate on whether or not there actually will be a major simplification of the tax code. Will elected members of Congress willingly give up their ability to control you? Why do they want to control you anyway? What does it matter to them? Easy answer . . . for financial consideration. Getting elected is expensive. Getting others to pay for that expense is easy . . . just do what political benefactors ask of you. Being a successful politician, winning several sequential elections, is the quintessential demonstrated result of the phrase, "Quid pro quo." The tax code pushes people into certain activities that benefit special interests . . . so says the IRS. This statement appears on page 6 in the section titled Most Serious Problems: "The point of a tax incentive, almost by definition, is to encourage certain types of economic behavior." Economic behavior, dear readers, means how you spend your money. And it matters to special interests. Directly and through lobbyists, those special interests work diligently and spend prolifically to ensure elected members of government at any and all levels enact laws that financially benefit themselves or their clients.

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The following language appears on pages 3 and 4, "According to a TAS analysis of IRS data, U.S. taxpayers and businesses spend about 7.6 billion hours a year complying with the filing requirements of the Internal Revenue Code. And that figure does not even include the millions of additional hours that taxpayers must spend when they are required to respond to an IRS notice or an audit. If tax compliance were an industry, it would be one of the largest in the United States. To consume 7.6 billion hours, the "tax industry" requires the equivalent of 3.8 million full-time workers. Compliance costs are huge both in absolute terms and relative to the amount of tax revenue collected. Based on Bureau of Labor Statistics (BLS) data on the hourly cost of an employee, TAS estimates that the costs of complying with the individual and corporate income tax requirements in 2006 amounted to $193 billion--or a staggering 14 percent of aggregate income tax receipts." Almost a decade later, the cost of compliance under the current code (think of the thousands of rules and regulations implemented by the voracious and rapacious Obama regime) must be significantly greater than the numbers stated immediately above . . . maybe twice as much. Googling that question turns up many answers as well. Nevertheless, whatever is the correct answer, eliminating millions of jobs and the $billions spent on those jobs is the expected and promised result of reducing the tax code. Not included in those numbers is the staggering amount spent on lobbying. With no lobbying going on, how will political contestants get their campaigns financed? Under the current tax reporting system, some electees start out at or near the bottom of the economic ladder and become rich only after getting into office. Without the lobbying by special interests that finances elections only rich people will be financially capable of seeking office. If and when that occurs a good question might be, "Are they intending to do what is good for you . . . or are they there to enhance their own existing wealth?" I ask again, "Do you really believe there will be a significant simplification of the U.S. tax code under any not-so-freely elected government?" If you answer in the affirmative my next question is, "Where are you on the tooth fairy and the anticipated reward to be found under your pillow?" The Complexity of the Tax Code - Internal Revenue Service