April 17, 2008
It’s over for another year.
Every January, the resolution at the very top of my long list reads: "Do your taxes next week." Every April, I find myself stuck at the computer, dancing with the virtual reality of TurboTax, not to mention the virtual reality of my records and the tax system itself.
Preparing my income tax return is the most repulsive civic responsibility I have to perform. Not even jury duty comes close. I have so severe a psychological hangup about it that the tricks that are usually effective in getting myself to do things I don’t want to do --mark artificial deadlines on my calendar, take the job in small steps, call somebody to talk my fears through, think of how good I’ll feel when it’s done, reward myself with a celebratory dinner — are totally useless. As March bleeds into April, the 1040 is constantly on my mind, with a little voice niggling me: "Do those taxes, Roger." Nothing works, except the real deadline. As the dread day approaches, I become the opposite of my former self, maniacally focused on the work, poring over statements and forms and instructions and Quickbooks reports (the federal Paperwork Reduction Act is as specious as the tax code itself), plugging numbers into TurboTax, looking at the results, and making liberal, undocumented adjustments for a better outcome (as Joel Katz, the cigar-chomping accountant who years ago taught me enough about taxes to give me the confidence to do them without him, once told me: "It’s all basically smoke and mirrors"). Finally, late on the night of April 14, I say to hell with it, print everything out, sign the damned things, and heave them into the mailbox, fingers crossed.
Aside from the tedium of assembling the documentation, preparing taxes is infinitely simpler today than it was a decade or two ago. Computerized bookkeeping programs spit out your records by category, and computerized tax programs step you through the process with comprehensible questions, do all the calculations, and plunk them into all the right places on the panoply of forms. Remember the good old days of manual preparation? — "Subtract line 9 from line 8 and enter on line 10. Enter the lesser amount of lines 7 and 10 on line 11." Now I barely look at the forms; I can’t understand them anyway. If you can’t trust your tax preparation software, whom can you trust?
Yet relative ease of preparation does not mitigate my revulsion of the whole byzantine system of income taxation. There is something intrinsically wrong with it, beginning with the fact that it is a huge thicket of provisions that not only the average citizen but the trained tax preparer at your H&R Block store and even high-priced accountants who devote their lives to it can never fully master.
The major problem with the tax code is that over the last 50 years or so it has come to be used not primarily as a means of raising revenue but as an instrument of social policy — the redistribution of wealth (more often to the wealthy) by the back door. Rather than give direct grants to achieve national goals — buying a Prius, for example — governments write ever more new deductions and credits into the tax code. In addition to making the code incredibly complex and bewildering, what this does is to sever the link in everyone’s mind, from layman to legislator, between taxation and its basically simple original purpose: to raise revenue to balance the budget.
The best approach to tax reform is, of course, a progressive flat tax. This has been proposed by politicians as ideologically diverse as Jerry Brown and Mike Huckabee but has never gotten anywhere, mostly because special interests see "tax relief" as more passable (because more hidden) than direct appropriations.
The thought of a simpler and fully automated income tax — a flat percentage of income graduated by bracket and tied to the annual budget, with a sole exemption for dependent children - is an appealing idea if there ever was one, except of course to all those tax preparers, accountants, and interest groups, which is probably why it’s an idea whose time will never come.
Before going to my celebratory dinner on Tuesday, I took out my calendar, turned to January 1, 2009, and scribbled in: "Do your taxes next week."