Taxes in the Future

For most of the United States, it was Tax day yesterday. Your federal, state, and local (if you have them) taxes were due unless you filed for an extension. And predictably, the news programs were filled with people complaining about our tax code.

I don’t mean they were complaining about the amount of taxes – though those people were out in force as well. I mean the people complaining about the “complexity of the tax code” itself.

Admittedly, it’s a bit… hefty. I wouldn’t want to have to wade through it on my own. And these collected quotes from lawmakers (interestingly, all complaining, all Republican) are pretty accurate about its length. The whole thing is over 24 megabytes in length – which sounds small in 2010, until you realize that a Gutenberg etext of War and Peace isn’t even four megabytes in length. At a rough guess, the US Tax code is about as long as all the books I read for my bachelor’s degree. I would hate having to read that mess.

But see, that’s the point. This is the future. I don’t have to read it.

My tax situation, like everything else in my life, has been complicated for years. But I’m willing to bet that I spent less time [1] doing my federal, state, and local taxes than my parents did on federal and state taxes when they were my age.

It took me three hours, a single file folder of needed paper receipts, and the documents I scanned into my PC. The local taxes (through the city’s website) took an additional hour; about a quarter of that time was because I didn’t read the directions carefully enough and made a mistake.

A simple tax system sounds great – but it ignores that our lives are complicated, messy things. All [2] those exceptions and changes and differences and just stuff that makes our tax code so big and unwieldy for people to read are there for a reason.

The thought of reading all that stuff – let alone understanding the legalese – is intimidating. Which is why I’ve used a tax-preparation program for the fourth year running. [3] Again, this is the future, dammit. All those complicated bits of the tax code? They’re just nested if-then-else statements. This is exactly the sort of thing that computers are made for. The existence of computers means that there is no need for most individuals to intuitively understand the tax code.

There are potential problems with this, which I’ll acknowledge briefly:

• The more complicated the law (and the fewer people who understand it), the more easily manipulated it is. Potentially true – but that’s what professionals are for. Further, simple laws aren’t as simple as you think. I spent over an hour arguing “Thou shalt not kill” (or murder) with an Army chaplain when I was in Basic. Simple rule, but a lot of assumptions packed into it.
• The programs are expensive. This is true. I understand the IRS’s actual (free) online e-file isn’t that much harder to use; if this is really the only thing holding us back, I’m sure there’s competent accountants, graphic designers, and programmers that the government can hire to make their own competitive (and discounted) software.
• Not everyone has a computer or the skill to use it.

You’re right. So we fund computers in our public libraries. We fund extra folks to help with computer (not tax) use in the libraries. [4]

There are lots of valid things we can debate about the tax code. How it should be implemented, who gets taxed, who gets rebates and breaks, and so on. But claiming it’s just “too complicated” is nothing more than whining.

[1] I haven’t asked my parents for certain, but you get the idea.
[2] Okay, most. But what’s trivial to you might be important to me.
[3] After I found out the tax preparers I frequented were essentially using the same program.
[4] Because, if you remember, the whole point is to have software that guides one through the tax code in plain language. Tax advisors would be, for the most part, unneeded.

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