In our opinion: No way to run a tax system

Politicians probably made today, April 15, tax day for a reason. If they had put it in October, Americans might be in a less forgiving mood on Election Day.

Want to have some fun? Try explaining the federal income-tax system to a foreigner. Language won't be the only barrier. For starters, you can't explain it. We doubt any single person can. The Tax Code now fills about 70,000 pages, and Americans combined spend more than 6 billion hours and $265 billion each year just to complete the paperwork that is due to the Internal Revenue Service today at midnight.

The United States has consistently had the world's strongest economy (even in today's worldwide recession) and has an impressive record of inventiveness and entrepreneurship in spite of, not because of, its tax laws. The nation has no shortage of intelligent minds with proposals for fixing that, but political pressures, fueled by the special-interest protections built into the tax code, have so far kept those from getting serious attention.

The danger now is that the current recession will embolden politicians to expand government to the point where it will become a real drag on the economy. President Barack Obama's proposed $3.6 trillion budget would saddle the nation with deficits of $9.3 trillion over the next decade, according to the Congressional Budget Office.

Contrary to what some may think, deficit spending is a tax of its own. Not only does it present worries about national security (China has absorbed large portions of the debt), it tends to encourage inflation. Large debt can best be paid with cheaper dollars. But inflation lowers the spending power of average Americans.

How do Americans feel about taxes? Conventional wisdom says they are in a post-boom funk right now, ready to let government take a bigger role in daily life. But a recent opinion poll commissioned by the independent Tax Foundation tells a different story. The poll found that 56 percent of Americans think federal income taxes are too high, while 85 percent think the tax code is too complicated. A whopping 82 percent believe the entire tax system should be overhauled.

The survey asked what respondents thought should be the maximum percentage of income a person should spend for all federal, state and local taxes. The average answer was 15.6 percent. In reality, taxes take 28.2 percent of a person's income, on average.

A number of Americans will participate in "tea parties" around the country today. Their goal is to pressure Washington into finding other solutions to the current crisis than to spend money on bailouts and stimulus schemes.

The movement may be too small right now to have any real effect, but politicians should beware that Americans have a history of getting feisty about taxes, especially when they feel taxes begin to impede progress.