A lot of people really hate paying taxes, however admittedly sometimes I struggle with this…
I get the idea of thinking you can do better with your money than the government can, and sure, there’s plenty of wasteful spending that takes advantage of having Uncle Sam’s hands perpetually in our pocketbooks, yet still a lot of good still comes from paying our taxes each year nonetheless. We fund roads and bridges to transport ourselves across this great land, safety standards to ensure – or at least try to ensure – that the other cars around us on those roads will be able to stop at the necessary times, and when we’re ready to pull off for a snack, we fund regulations to ensure that the $0.59 burgers we grab from the drive-through are in fact more burger than, well, anything else!
Our tax dollars go for so, so many things – public safety, education, space exploration, national defense, welfare – the list truly goes on and on forever, and although sure, there are probably some things in that list that *I* wouldn’t necessarily spend my own dime on, I’m also 1 of 350 million people in the country and the rest all have things that are important to them, too.
So honestly in the grand scheme of things, in the moment it’d be nice to have a few extra bucks in my pocket instead of filling out those forms, I can still look across the vast array of stuff that I get for my tax dollars and I can’t really complain too much about paying taxes.
Seriously, if I had to build my own roads to get anywhere I wanted to go, I’d leave the house even less than I already do today! 😛
And I think it’s because of this generally positive outlook on taxation that I kind of shake my head when presidential candidates come to the podium with all of these crazy, new ideas about how to fix the US tax code “because it’s too complicated” so that we can “abolish the IRS” because taxes are evil, despite the fact that every last politician’s paycheck is in fact paid by taxes. They’ll talk about a flat tax or consumption-based taxes or cutting taxes for corporations … the latest boondoggle that grinds my gears is one from Senator Ted Cruz promising that Americans will be able to “do their taxes on a postcard.”
…which is actually false because the Ted Cruz postcard still has lines for deductions and most people who actively use deductions can’t exactly do them on the back of a napkin, anyways…
The thing is, filing taxes is complicated these days because we need them to be complicated – from both ends of the candle, actually.
Not only do we pay for a lot of things through our income taxes, but we also handle a lot of things indirectly through our existing tax code. We give low income and child tax credits through our federal filings. Taxpayers are incentivized to own a home, donate to charity, and save money for retirement through deductions and tax credits. Businesses are taxed, but only on their profits after expenses, encouraging them to invest and grow their businesses before paying Uncle Sam.
In turn, our tax code is also decidedly progressive, in that tax rates increase along with a taxpayer’s income. This is very important particularly in America’s current economic landscape today where the top 20% of US households own more than 84% of the wealth and the bottom 40% together account for barely 0.3%. Though a flat tax might be simpler in theory to calculate, it would also be tremendously weighted towards the wealthy and it would generate less overall tax revenue to boot.
Sure, a more complicated tax code makes filing take longer, although I would argue that folks like TurboTax and H&R Block make this hurdle fairly easy for your average taxpayer and the reason why corporations hire armies of tax accountants is simply because it’s worth it for them to do so! All in the same, our government by its own nature isn’t simple – nor do I think it necessarily should be – so why should paying taxes be any easier???
If we really wanted to make our tax code less complicated, we’d simplify the budget itself and find different ways to address some of the other taxpayer benefits that are currently handled through our tax system regarding poverty and encouraging personal financial growth, but right now our best tool for these needs and countless more lies in our tax code.
I don’t know about you, but I’d rather put a little more thought into it than what I can scribble onto the back of a postcard.
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References:
- Economic Inequality: It’s Far Worse Than You Think : scientificamerican.com
- The Tax Code is a Complicated, Horrible Mess Because We Like It That Way : theatlantic.com
- The Simple Flat Tax Plan : tedcruz.org