Tax Day 2019: Hype and Hyperbole
by Duane N. Burghard
©2019
Few things get Americans going like complaining about taxes (despite the empirical fact that we actually pay less in taxes than many other first world nations). Trashing the IRS as a group of jackbooted government thugs is as American as Apple Pie, and a long standing tradition on both sides of America’s political divide (although, let’s be fair, the far right does it more bombastically and more frequently). But as we pass through our annual "gnashing of the teeth" that is April 15th, is it really that bad?
ehhh.
Now, before the unpatriotic whack jobs have their moment (and I know they will), allow me to establish my personal bona fides in the area of "right to complain about taxes." I am a former small business owner. My wife and I owned a chain of technology (computer) retail stores in about 10 different states. In the early 2000s, we routinely paid at least $4K/year in tax preparation fees (no, that's not a misprint, and let me be clear about how very happy I was to write that check each year and let those accountants take on that unspeakable nightmare for us). I actually took a picture of our combined tax return about a decade ago because it was a stack of paper that was literally FIVE INCHES TALL. My point? I am very familiar with how convoluted and complicated our tax code has become (which is to say, of course, that I'm actually not, but that I literally had to pay an entire firm of professionals to know it for me). It is a bloated mess with a million rules and a billion exceptions, and it is in need of rather incessant reform and changes (which, just to be clear, is exactly what it's getting).
But with that said, I feel the strong need to note that our tax system is not the result of some evil, detached, technocratic, bureaucratic entity that delights in screwing with us. Our tax system evolved into its current state, and this is the bitter pill to swallow folks: it did so at our request.
That’s right, our tax system is in the messy condition that it’s in today because that’s what we wanted. No great, evil cabal of Congressmen is sitting in a dark room saying, "gee, what new and more frustrating things can we do to make our tax system more complicated and harder to follow than the last two seasons of Lost?" No, they were instead doing exactly what we, the voters, ASKED them to do. We started with a pretty simple tax system, but then some people said, "but if I have children I should pay less in taxes," and they voted for people who said they'd provide a deduction for that. And then others said, "but I own a home and pay money in interest, I shouldn't have to pay taxes on that," etc. etc. THAT is how we ended up here, and it’s why we’re always going to come back here, even if some of our more batshit crazy and less educated tax advocates manage to shove something regressive and stupid like a “flat tax” down our throats … eventually (and probably shockingly quickly in fact) the exceptions and deductions will creep right back in.
Another incredibly common complaint I hear (and one which was immortalized in a meme on social media this week ... and this meme was basically the impetus for this blog post ... and I know it hit folks on both sides of the aisle because it was reposted by friends of mine on both the far left and far right) is that the government somehow knows what we owe but won’t tell us. It further goes on to suggest that the government has intentionally left us helpless in the face of this daunting task, and that it is further, maniacally, eagerly hoping we will fail (make critical errors in tax preparation and submission) so that it may despotically crush us for those mistakes. No. First, the government does not know how much we owe. We're both guessing when we fill out our W-4s (which, if you haven’t heard, thanks to Trump, is a process that’s about to get massively more complicated ... yeah, that full on NIGHTMARE is coming, and you should Google it, because that movie starring us is going to make The Texas Chainsaw Massacre look like Dumbo).
The point is that when we fill out our W-4s, and when we do our end of year taxes, we’re making our best and most accurate guess of what we owe vs. what we have paid using the rules as we (and/or our accountants) understand them. Our taxes are always a "best guess" reconciliation, and here’s something of a shock for some people: the vast bulk of the time, the government takes our word for it. That’s right, for the vast majority of people, a computer looks over your return, not a person. And that computer then crunches the numbers in your return through an algorithm, and if it "looks right," it moves on … and if it doesn't, then it may get flagged for a human to look at.
What makes me say this? Well, for one thing, math. Last year, over 140,900,000 tax returns were filed and sent to the IRS (source: IRS). Assuming you had employees working on these returns 24 hours/day, every day (365 days/year), the IRS would have to review about 4.5 tax returns every second in order to keep up (and that assumes uniform complexity of tax returns, which is obviously silly ... remember that mine used to be a 5 inch stack of paper, and while I was somewhat unique, I wasn't that unique ... and there are literally a couple of million Americans whose returns are massively more complex than mine used to be). The logistics make that level of examination simply impossible. The system has to assume that most people are acting in good faith and many simple errors are ignored or not caught. So to get back to the ridiculous fabrication in the recent meme, no, the government does not know what you owe (though they do have a rough idea, as do you).
The next ridiculous assertion in the meme is that, not only does the government know exactly what your taxes are, but that they’re going to send you to jail if you don’t come up with and pay that amount which they say you owe. No. First, the truth is that people rarely go to prison if they get their taxes wrong (and BTW, the government gets it wrong too, which they will and do admit), particularly if it’s clear that the error in question is unintentional. This fact should make sense to people because, generally, the government doesn't want you to go to prison if you owe them money ... they want you to work so you can pay it back. Now, if the government determines that someone has intentionally and willfully defrauded us out of some of the tax revenue necessary to build our roads, fund social programs and yes, fund our military, then yeah, those individuals are probably in some trouble. Additionally, people can make a serious mistake, even if it was completely innocent, and they're probably going to be liable to pay a (maybe significant) fine for that (which is yet another reason why so many of us pay professionals to do our taxes, so someone else is at least sharing in that potential liability). But again, the point is that the vast bulk of people who are going to jail for tax fraud ... well, they should be in jail for tax fraud (and certainly there are others, our current POTUS comes to mind, who probably should join them, but that's another story).
But this idea again that "government sucks" when government is merely a reflection of what the majority of voters have voted for (or failed to vote for because they didn't bother to vote) is, to me anyway, basically projecting. I know a significant number of people who work in our government. They're overwhelmingly just like you and me. They want to do a good job, and they're doing the best they can with what they have. The only thing "broken" about our system is our unwillingness to do the hard work necessary to properly maintenance it (democratic Republics are like any other machine, they need care and maintenance to keep working properly … and we haven’t exactly shown ourselves to be experts at this task).
The bottom line here is that the people who argue against paying taxes to support our government are people who have been sold on a bullshit idea that "government" is somehow a separate thing from them. WE are the government. I admit that this reality is a MUCH harder sell because it requires that people accept responsibility instead of placing blame, but it's the truth.
