Another April 15 tax filing deadline has arrived, reminding
Americans once again that our taxes are too high and too
complicated.
Another April 15 tax filing deadline has arrived, reminding Americans once again that our taxes are too high and too complicated.
When the income tax was created in 1913, the tax code was 14 pages long and the income tax rate was simple: 1 percent, according to a news story in the Gainesville Daily Register.
Now the tax code contains more than 47,000 pages and the thought of trying to come up with an average rate is mind-boggling. But despite the loopholes, credits, alternative taxes and Byzantine regulations, one group has tried.
Tax Freedom Day – the date Americans have earned enough income to pay their own tax burden for the year – was April 11. According to the the Tax Foundation, a nonpartisan group dedicated to monitoring governmental fiscal activities and informing the public, Tax Freedom Day is projected to be later and later in the next decade. The foundation estimates that the average American will be done paying their taxes on April 14 in 2005, slipping to April 29 by 2014.
Of course here in California, thanks to our high state tax burden, Tax Freedom Day didn’t come until April 13, giving us the 10th-highest tax burden in the nation.
The institute projects that “Americans will … spend more on taxes than they spend on food, clothing and medical care combined” in 2004.
But that’s not the only problem with taxes – a major gripe is that they’re just too complicated.
After all, if they confused Albert Einstein – “The hardest thing to understand in the world is the income tax,” the Nobel Prize-winning physicist said – then taxes are, without a doubt, inscrutable.
There have been some efforts to simplify the tax code over the years, but they have never caught fire. Former presidential candidate Steve Forbes and others have proposed a flat tax, and still others have suggested replacing the federal income tax with a national retail sales tax. Unless you’re a CPA or own a tax preparation business, we don’t understand why tax simplification hasn’t caught on with the tax-paying public.
We don’t know if escalating tax rates or increasing tax law complexity will finally be the proverbial straw that breaks the camel’s back, but we predict one or the other will eventually cause a taxpayer revolt.
It’s not that most Americans mind paying their taxes – any benefit we demand, such as schools, libraries, sewers, clean water, roads, elections, police and fire protection, national defense, to name just a few – has to be paid with taxes. But we have to be mindful of the burden we’re placing on working Americans both financially and by requiring them to complete frustratingly intricate, time-consuming forms spawned by millions of words in the tax code.
Politicians beware: Eventually your cash cow is going to topple the tax bucket. Perhaps the computer-savvy next generation will purposefully throw electronic monkey wrenches into the system grinding Uncle Sam’s arcane collection system to a halt. It feels like that’s what it will take to initiate meaningful reform – something chaotic, something bizarre and something born of long-term frustration.
