Ob­struc­tions to tax sim­plic­ity

Pow­er­ful spe­cial in­ter­ests stand in the way of Trump’s re­form plans

The Washington Times Daily - - OPINION - By Cal Thomas Cal Thomas is a na­tion­ally syn­di­cated colum­nist. His lat­est book is “What Works: Com­mon Sense Solutions for a Stronger Amer­ica” (Zon­der­van, 2014).

Thanks to the benef­i­cence of the fed­eral gov­ern­ment (and the cal­en­dar), we Amer­i­cans have un­til mid­night on April 18 to file our in­come taxes. It’s too bad fil­ing taxes wasn’t an eas­ier process.

Pres­i­dent Trump has pledged to re­form our tax code, which, to most peo­ple, cur­rently reads like a for­eign lan­guage. Mr. Trump said tax re­form would be a top pri­or­ity for his ad­min­is­tra­tion, but he is up against pow­er­ful lob­by­ists work­ing for the tax prepa­ra­tion in­dus­try and also char­i­ta­ble and other or­ga­ni­za­tions who want to keep things just as they are, since some donors would be less likely to con­trib­ute if they lose their abil­ity to claim de­duc­tions on their taxes.

Does any­one be­lieve this tax code lan­guage is some­thing we should main­tain? “En­ter 6 per­cent of the smaller of line 40 or the value of your Archer MSAs on De­cem­ber 31, 2015, in­clud­ing 2015 con­tri­bu­tions made in 2016. In­clude this amount on Form 1040, line 58A or Form 1040NR, line 56B.” This lit­tle gem is in T.R. Reid’s book “A Fine Mess,” a work about our tax sys­tem that should raise the ire of any tax­payer not al­ready irate.

Busi­ness In­sider cal­cu­lates that 31 coun­tries have a sim­pler tax code than the United States. Es­to­nia ranks first in sim­plic­ity. Es­to­nia.

The fed­eral gov­ern­ment col­lected record amounts of in­di­vid­ual in­come taxes and pay­roll taxes through the first six months of fiscal 2017, ac­cord­ing to the Monthly Trea­sury State­ment pub­lished by CNS News.

Through March, CNS’ Ter­ence P. Jef­frey re­ports, “the fed­eral gov­ern­ment col­lected ap­prox­i­mately $695,391,000,000 in in­di­vid­ual in­come taxes. That is about $7,387,280,000 more than the $688,003,720,000 in in­di­vid­ual in­come taxes (in con­stant 2017 dol­lars) that the fed­eral gov­ern­ment col­lected in the first six months of fiscal 2016.

“The fed­eral gov­ern­ment also col­lected $547,491,000,000 in So­cial Se­cu­rity and other pay­roll taxes dur­ing the first six months of fiscal 2017. That is about $2,731,820,000 more than the $544,491,000,000 in So­cial Se­cu­rity and other pay­roll taxes (in con­stant 2017 dol­lars) that the gov­ern­ment col­lected in the first six months of fiscal 2016.”

After all that rev­enue col­lec­tion (and there is much more, as ev­ery tax­payer knows who pur­chases any prod­uct or ser­vice, from your tele­phone bill, to a ticket on a com­mer­cial air­line), the Trea­sury still ran a deficit of $526,855,000,000 in the first six months of fiscal 2017.

As Ron­ald Rea­gan said, the rea­son we have a deficit (and a debt ap­proach­ing $20 tril­lion) “is not that peo­ple are taxed too lit­tle, the prob­lem is that gov­ern­ment spends too much.”

In a re­cent in­ter­view on NPR’s “Fresh Air” pro­gram with Terry Gross, Mr. Reid said: “I was in the Nether­lands on March 31 — their tax day is April 1 — talk­ing to a man­ager. He makes about $200,000 a year. He has a whole panoply of in­vest­ments, two kids in pri­vate schools, two mort­gages. He’d have to fill out 12 forms in the United States.

“And I said, Michael, how do you do your taxes? They’re due to­mor­row. He says, well, I pop a beer. I go on­line and see if the gov­ern­ment’s got the num­bers right. And if they do, I hit a but­ton. Takes five min­utes. He says, but you know, some­times I start check­ing the num­bers. [If] you start check­ing the num­bers, it could take al­most half an hour just to pay your taxes. He was out­raged.”

The U.S. gov­ern­ment has all of our in­come in­for­ma­tion (W2s and 1099s). Most of us have a pat­tern of de­duc­tions, from mort­gage in­ter­est, to char­i­ta­ble giv­ing. Gov­ern­ment com­put­ers could do the work and send us a bill for what we owe. We could check their num­bers, add or sub­tract from them as war­ranted and be done with it, in­stead of en­dur­ing an ex­pen­sive (if we must hire a tax pre­parer, as I do) and time­con­sum­ing ex­pe­ri­ence no one en­joys.

In­stead, tax­pay­ers strug­gle to de­ci­pher the un­de­ci­pher­able while politi­cians and lob­by­ists, who do­nate to their cam­paigns, con­tinue to block com­pre­hen­sive tax re­form.

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