Enjoying your tax season?
This year, because the 15th falls on a weekend, taxpayers have until April 17 to file their returns. But two extra days won't help much. A recent investigation by the Government Accounting Office found that even professional tax preparers at large national chains often get it wrong. They don't compute income correctly. They miss deductions. They aren't aware of all the credits for which a client might qualify.
And why? Because the tax code, which is estimated to include close to 10 million words, is ridiculously complicated.
How ridiculous is it? Last year the Internal Revenue Service released statistics showing Americans spent a combined total of 6.6 billion hours doing the paperwork necessary for filing their taxes. That's billion, with a b.
What could Americans be doing with all those hours if they weren't hunched over forms or consulting with professional tax preparers who were hopelessly getting things wrong? Even with the human propensity for wasting time or seeking entertainment, it's fair to assume that at least some of that time could be spent earning more money, which under a sane tax structure might actually help the economy and fund government at the same time.
More madness: Millions of people miss out on deductions every year simply because the rules are too complicated. The Associated Press last year provided some examples. One education tax break comes with an 83-page manual. Deductions for retirement savings accounts include a dozen options. Then there is the alternative minimum tax, a "second layer" that confounds even the most educated.
Underneath all this bureaucracy runs a constant thread of fear. You may be investigated, fined or worse if you foul up your returns.
Why do Americans put up with this idiocy? Why aren't people staging protests and marching on Washington? Maybe because they've come to accept things as they are. Or maybe they feel the system is too complicated to untangle.
The Tax Foundation, a private research group, says Americans will, on average, work full time until April 26 this year just to pay federal, state and local taxes. Many people don't think twice about this until mid-April rolls around. But the discussion here concerns your hard-earned money.
A lot of states, including Utah, have begun discussing ways to improve and simplify their own systems. It's time now to begin demanding that politicians in Washington do the same.
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