Tax sys­tem so com­plex, it bor­ders on crim­i­nal

The Standard (St. Catharines) - - OPINION - That would be fraud com­mit­ted by our gov­ern­ment. jim­mer­riam@hot­ JIM MER­RIAM

Don­ald Trump and his Repub­li­can ad­min­is­tra­tion in Wash­ing­ton have got­ten one thing right in their drive to­ward tax re­forms.

This doesn’t mean pass­ing judg­ment on what the or­ange-haired bum­bler calls the “big­gest tax cut in his­tory,” nor whether the changes will be of most ben­e­fit to the rich or the mid­dle class.

Over his his­tory Trump rarely has acted in any­thing but his own in­ter­ests.

But there is one el­e­ment of the tax plan that is over­due for at­ten­tion — the sim­pli­fi­ca­tion of the tax code.

At last count the U.S. code was a whop­ping 73,954 pages long. And tax­pay­ers are sup­posed to com­ply with ev­ery sin­gle pro­vi­sion that ap­plies to their sit­u­a­tion.

Un­der the new plan, Repub­li­cans claim av­er­age Amer­i­cans will be able to sub­mit their taxes on the back of a post­card.

By that way of think­ing, Cana­di­ans should be able to file their taxes on the back of a postage stamp. At 3,000-plus pages of tax reg­u­la­tions Canada’s tax code must seem to Amer­i­cans as if it’s writ­ten on the head of a pin.

Even at that, those 3,000 pages con­tain over one mil­lion words that most tax­pay­ers can’t un­der­stand.

Here’s some his­tory from The Toronto Sun.

“When in­come tax was first in­tro­duced as a tem­po­rary mea­sure in 1917 to fund Canada’s war ef­fort, the leg­is­la­tion was 11 pages long.”

To put today’s mil­lion-plus words in per­spec­tive, War and Peace is about half as long, at 587,287.

“Plus, Tol­stoy’s novel is a fic­tional read – it’s not law! The Act is. And it’s a long law that clearly no­body, not even the peo­ple tasked with en­forc­ing it, ac­tu­ally un­der­stands. That’s scary.

“It means that at any time an au­di­tor could find you guilty of sev­eral of­fences that you didn’t even know ex­isted.”

The Fraser In­sti­tute noted that Cana­di­ans spent $6.96 bil­lion in

2012, or $501 per house­hold, com­ply­ing with the mas­sive tax code.

That’s the point where the rub­ber hits the road in terms of com­plex­ity. Is it fair that Cana­di­ans have to spend that kind of money to com­mu­ni­cate ef­fec­tively with their gov­ern­ment?

Surely in a rea­son­able democ­racy run by rea­son­able peo­ple, no­body should be forced to hire an ac­coun­tant, lawyer or other kind of go-be­tween to do busi­ness with the peo­ple elected to serve our best in­ter­ests.

Com­plex­ity of course, is a hall­mark of mod­ern gov­ern­ment. It is not just the tax code that is full of flowery lan­guage and acronyms, but ev­ery piece of writ­ing by bu­reau­crats.

As gov­ern­ment in­trudes on more and more ar­eas of our lives, ad­di­tional staff is needed to pro­duce the req­ui­site pa­per work.

Such pa­per­work in­vari­ably is writ­ten in bu­reau­cratese, which pretty much en­sures that no one out­side the gov­ern­ment re­ally un­der­stands it.

Brook­ings In­sti­tu­tion so­cial mo­bil­ity ex­pert Richard V. Reeves, writes that com­plex­ity “is the friend of the up­per mid­dle class.” Brook­ings is deeply in­volved in the study of gov­ern­ment ac­tions.

Reeves’ com­ment pro­vides in­sight into the in­sid­i­ous way govern­ments can, even with­out re­al­iz­ing it, work against the bulk of the peo­ple they seek to serve, says Mark Funkhouser of Gov­ern­ing mag­a­zine.

For the most part there is noth­ing ne­far­i­ous in the con­fus­ing rules and reg­u­la­tions; just com­plex­ity. How­ever, it does drive an ev­er­widen­ing wedge be­tween the gov­er­nors and the gov­erned.

Govern­ments at all lev­els surely should not have the right to con­tinue to com­pli­cate what should be sim­ple trans­ac­tions for peo­ple.

Satirist P.J. O’Rourke said it best: “Be­yond a cer­tain point com­plex­ity is fraud.”

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