Happy Tax Day! If it doesn’t feel like a holiday, consider this – you are obliged to count up all your blessings from the previous year and spend time doing something you don’t entirely understand or enjoy all that much. If you’ve really procrastinated, like me, you may have to take off work. But if you haven’t filed yet, here is your last minute advice from Barataria: stop screwing around on the internet and file already!
This is an even more special day than your typical holiday because Tax Day means one thing to Americans everywhere – we all get to complain. Bitterly and constantly. Rather than whine about the amount of taxes, however, it seems more appropriate to take note of the incredibly complicated and expensive way we go about collecting the money that is necessary to run a government. It costs between $160 and $234 billion just to prepare the paperwork, or about as much as the feds collect in corporate taxes.
As Congress contemplates actually doing its job and passing a budget for the first time in seven years, calls are going up to do more than simply balance the budget. The complications in the system are driving everyone nuts. An excellent editorial in the Milwaukee Journal-Sentinal called on Ways &Means Chair (and local boy) Paul Ryan (R-WI) to include reforms akin to those proposed by his predecessor Dave Camp (R-MI).
The problem is best illustrated by the sheer cost of filling out the forms and figuring out what all the line items mean. The National Taxpayer’s Union is certainly a right-wing organization, but come tax season they have a point. Their annual cost of compliance estimate came in this year at $234B for all forms of taxes, individual and corporate.
That’s about $2,000 for every household in the US.
Their report backs up this claim with a lot of data on the time it takes, the number of phone calls the IRS receives, and wait times. It’s a blistering report that you don’t have to take as completely true to get the point – there has to be a better way. Even if you believe the more often cited lower figure from a hard to identify source, $160B, it’s far more than it should be.
How can we make it simpler?
There are many ways, of course, and frankly that’s not important right away. There needs to be a broad agreement on the form and character of meaningful reform as well as a target. Let’s just say that it really is $234B overall. If we reduced that by 2/3 to about $78B, we could have an accompanying tax increase of $78B and save the taxpayers a net $78B overall. Sound like a fair deal?
This would mean a radical overhaul, to be sure, and it’s not going to be easy. But the potential increase in revenue for a government running a deficit of $510B a year is very important. General reform all around fits in very well with a drive to a balance budget, especially if we make the big change Barataria has called for and start treating ordinary expense and capital differently.
Of course, this is all a lot of work and it sounds especially impossibe for a divided and dysfunctional government. But on Tax Day, I think we can come together and agree no matter where we come from that we could carve a better tax code out of a banana. Let that be what brings us all together and makes Tax Day a joyous holiday we can all celebrate!
OK, that’s probably way over the top. But can we at least agree when something is this obvious – and get the elected leadership to work on it?