Those Blasted Tax Returns

As most of the free world knows by now, Mr. and Mrs. Mitt Romney (finally!) released their tax return for 2011. They had previously released their 2010 tax return, also released a summary of their previous ten years of tax returns, and said that’s enough.

Both the Romney and Obama camps have focused on the content of those returns: what the tax rate was, what the actual amount paid was, the sources of that income, all of the stuff around which (apparently) the character of a candidate is built.

DSCN0627What I have not seen even a peep about is the length of the returns. Two years of telling the U.S. Government where the Romneys attained their money requires a staggering 1,200 pages to be filled out! Okay, say it’s a measly 600 pages per year, per tax return. I don’t care whether the Romneys can afford to file twice that amount of paperwork, or pay attorneys and accountants three times the amount they did to fill out those papers. Requiring any one person to file that many pieces of paper simply to inform the government where the money came from is a tremendous waste of time and money.

Even if the private accountants and attorneys employed by the Romneys are enjoying the good life because their expertise is well compensated, think of the level of learning that the IRS employees must attain in order to be able to comprehend that same amount of data. This is no check the box return; there are subtleties upon subtleties in those statements. I daresay that it could easily take one IRS auditor up to a year to unpack all of the machinations built into those returns.

I’m not saying that the Romneys, or their tax advisors, did anything wrong. I’m merely stating that the tax code is so full of vague, wishy-washy terms, so many clauses that can be read in so many ways, that for an outsider to be able to figure out which clauses were read which way, and how those readings and actions taken based on those readings meet up with reality, could provide an auditor with a lifetime of headaches.

And say that that’s not a problem, that the amount of taxes the Romneys have given to the feds will pay for an auditor for a year or two, with some amount left over for actual governing. Still, this hooey is going on all over the country, with all sorts of businesses and individuals trying to figure out the maze that passes for our tax code, and with some of those businesses and individuals using the maze to end up paying little or no tax (like General Electric in 2010, for example).

Who pays for their auditors? Who pays for their attorneys and accountants, for that matter? The breaks in the tax code are not based on income or wealth, they are based on status, like having or not having a Health Savings Account (HSA). And while many people who have money have HSAs, many people who have HSAs do not have a lot of money. But what they do have, those people with HSAs, is the inability to file a 1040EZ, or to take advantage of the free filing offered by tax preparers affiliated with the IRS.

That’s right. If you don’t have health insurance through your employer, but have your own high deductible health plan, with an HSA, no matter how much your income is, you are, because of that one change in your status, unable to avail yourself of free income tax help. And how many of those types of situations go on everyday, due to the ever-increasing intricacies of the tax code?

While pundits don’t necessarily agree on the precise number, the estimated costs to comply with our out-dated, social engineering tax code are in the billions of dollars every year. Flat tax, fair tax, nine-nine-nine, any of these plans have got to cost the taxpayers less than what we’ve got now.

Ah, but there’s the rub. Any tax that simply says “What’s your income? Send in this much of that” takes away a lot of the federal government’s power to do that voodoo that it do so well. That is, social engineering. Don’t know what I’m talking about? Ever heard of the terms sin tax, capital gains, and estate taxes? Messing around with those, increasing or decreasing them in any given year or decade, triggers people to react. Sin taxes have been imposed on alcohol and cigarettes, but don’t be surprised if sugar is next, given the current Sturm und Drang about obesity.

Repealing or increasing capital gains and estate taxes motivates people to sell their priceless Renoirs or Picassos, or to pass them on to the next generation. There is hardly any piece of human behavior that the government will not try to influence through taxation or lack thereof. The problem is that they’ve been doing it for so long, and have gotten so good at it, that the tax code has long passed unwieldy, and is approaching incomprehensibility for all.

In case you were interested, as of February, 2012, the Internal Revenue Code spanned an astounding 72,536 pages. No one person could possibly read the entire Code as fast as Congress adds to it, and comprehension of such a behemoth is impossible. It’s likely that each and every taxpayer is in violation of some portion of the Code at any one time, and asking the local IRS agent to explain any particular provision can be an exercise in futility.

So, when the Democrats are so keen on Mitt Romney releasing his tax returns, what exactly is it they’re looking for? And if he’s just as keen on keeping them private, can you really blame him? I can’t believe, that in 600 pages of attempting to comply with arcane legislation, drafted for a purpose other than the one for which it is being used, one or more of Mr. Romney’s advisors didn’t make some sort of mistake. What’re the odds?

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Filed under Critical Thinking, Elections, Politics

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