Tax system so complex, it borders on criminal
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.”