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Should complexity be the price of lower taxes?
An editorial / By Dale McFeatters
Scripps Howard News Service

 

April 18, 2006
Tuesday


We may fast be approaching the day when everybody's tax returns will be done by somebody - or something - else.

This year, over 60 percent of American taxpayers paid someone else to do their returns, and if you include those who used computer programs to do them, it climbs to over 90 percent.

Other people did President Bush's and Vice President Cheney's tax returns. The Associated Press polled Congress' top tax writers and found only one who did his own returns - Rep. Bill Thomas, R-Calif., chairman of the House Ways and Means Committee - and he's something of a maverick anyway. It is estimated that, even with a computer, the average taxpayer needs 37.8 hours - almost a workweek - to fill out a 1040. David Keating of the National Taxpayers Union suggests that congressional tax writers spend at least 20 hours each trying to fill out the forms before throwing in the towel and handing them over to a professional.

The NTU, which takes a malicious glee in documenting this stuff, notes that the 1040 instruction book has grown from two pages in 1935 to 142 pages today. While Bush has preached tax simplification, the complexity has accelerated under his watch. The booklet was 117 pages when he took office.

And it will get worse, because the alternative minimum tax, a sort of second tax code with entirely separate forms and instructions, is ensnaring more taxpayers. The NTU says 80 percent of AMT payers hire someone to figure it out for them.

Congress likes to pretend that the tax code and the Internal Revenue Service are something that just happened, like bad weather. But the tax code is purely and totally a creation of Congress.

Some of the complexity is due to credits, deductions and incentives to encourage conduct that Congress finds worthwhile - homeownership, retirement saving, education. Some of the complexity, especially in the corporate tax code, is due to loopholes and exemptions intended to reward favored industries and special interests.

Observed the NTU: "Paperwork burdens aren't the result of IRS bureaucrats mindlessly dreaming up new forms and regulations. Much of the burden increase is due to a flood of new tax laws ... These laws did reduce tax bills for middle-class taxpayers, but significantly increased their paperwork burdens."

We don't want to seem grasping, but couldn't we have lower and simpler?

 

Contact Dale McFeatters at McFeattersD(at)SHNS.com
Distributed to subscribers for publication by Scripps Howard News Service.


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