A Simple Kind Of Life
How Did Tax Time Get So Complicated? — Part 3
Three weeks into this blog series, you're probably wondering what strange tangent I've gone off on — with all this talk about tax codes and liabilities. Well, some of the things that complicate our life can only be simplified on a national level, through legislation. This is one of them, so I want to make sure you're well educated about the current excesses and abuses practiced by the IRS — maybe you'll feel compelled to contact your congressperson once I'm finished!
Out Of Balance
It's obvious that the mindset in this country was very different in 1913. Americans were happy to do their duty, contributing their hard-earned dollars to fund important government programs, as long as it wasn't bleeding them dry. However, they did not equate patriotism with fascism — they still held on to the idea that government didn't need to know every little detail about a person's life, and that privacy was a sacred right of each citizen. Section 3167 of the 1913 income tax laws state that it is unlawful:
“to print or publish in any manner whatever not provided by law any income return or any part thereof or the amount or source of income, profits, losses, or expenditures appearing in any income return; and any offence against the foregoing provision shall be a misdemeanor and be punished by a fine not exceeding $1000 or by imprisonment not exceeding one year, or both, at the discretion of the court; and if the offender be an officer or employee of the Unites States he shall be dismissed from office and be incapable thereafter of holding any office under the Government.”
All right! No revenue officer could share your income tax information with anyone, under penalty of imprisonment! That's the way a government should be run. But what about today? Compare this clause with an excerpt from the 1040A instruction booklet regarding the Privacy Act and Paperwork Reduction Act:
“We may give the information to the Department of Justice and to other Federal agencies, as provided by law. We may also give it to certain cities, states, the District of Colombia, U.S. commonwealths or possessions, and certain foreign governments to carry out their tax laws.”
Nice. Well, so much for privacy. Initially, it looks like the IRS is simply enacting measures to help them collect taxes owed — but why do we even need those measures? I could argue that if the tax system were set up in a simple and understandable way, and if it actually taxed those who should be taxed instead of providing and endless line of loopholes for corporations and the rich, we wouldn't need to violate personal privacy in order to chase down lost money. I could also argue that rules like this never punish those who are sidestepping the law — they just make life more difficult for the common citizen. And those would all be valid claims.
But in truth, so much of this kind of thing grows out of fear and impotence — we can't do anything really meaningful to feel more secure in this country, but at least we can control how people use their own money! As you have seen throughout the history of the income tax, worries about war have always prompted a “justified” financial and legal rape of the citizenry. Fear is also what allows shameful legislation like the U.S. Patriot Act to be passed, and fear will eventually cause us to give up every civil liberty we ever had — here, take all my personal rights, just make me feel safe! Rights, once surrendered, cannot be easily reclaimed. And it's a sad day when your own ruling body informs you that it can legally share your income tax information with foreign governments — don't expect that one to be repealed any time soon. But I digress…
The Ever-Growing Tax Code
Initially, a tax return was one page long — and the entire tax code consisted of only 14 pages. Simple, concise, and to the point. Even the average citizen could understand it. Since then, the federal income tax system has become so complex that it requires tens of millions of Americans to seek paid professional help to comply.
According to the National Taxpayer's Union, the IRS employs more people than all but the 36 largest corporations in the U.S., and employs more investigative agents than the FBI and the CIA combined (what happened to “voluntary compliance?”) It costs $10 billion a year to operate the IRS — and tax code compliance runs an additional $265 billion ($900 for every citizen) a year. The paperwork burden to companies is $5,100 per employee — money which could be spent on higher wages, hiring more workers, or not laying off existing staff (which would surely be bring about a bigger benefit to the economy!) Massive, massive amounts of our national wealth are wasted on measuring, tracking, sheltering, documenting, and filing our annual income.
Not to mention the fact that federal revenues drive expenditures — and the more income the government gets, the more ways it finds to justify higher spending (budget and economics be damned!) The very nature of withholding suppresses public outcry for tax reform — why bother writing your congressperson in favor of a tax cut when you're only going to net a couple of dollars on each paycheck? But if that savings was realized as a substantial reduction of an annual payment, folks would be much more likely to participate actively in their government.
Next week, I'm going to let my political leanings show and suggest a tax reform measure that will not only simplify your annual recordkeeping, but allow you more control over the taxes you pay.
Ramona Creel is an award-winning 15-year veteran organizer and member of the National Association Of Professional Organizers. As well as having birthed “The A-To-Z Of Getting Organized,” Ramona is also the author of “The Professional Organizer’s Bible: A Slightly Irreverent And Completely Unorthodox Guide For Turning Clutter Into A Career”—and the creator of more than 200 “quick-start” business tools and templates for use by productivity professionals. She writes seven different blogs, has worked with hundreds of clients, and has delivered scores of presentations on getting organized. Ramona resides on the roads of America as a full-time RVer—living and working in a 29-foot Airstream with The Husbert and two fur-babies. Learn more at GettingOrganizedAToZ.com and RamonaCreel.com.
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