This is the eighth article in a series on taxation leading up to Tax Day, April 15.
To say that the tax code is complicated would be the understatement of the century. It is, in fact, far beyond complicated, so much so that no one in this world could possibly understand it. Depending on who you ask, the tax code is somewhere around 15,000 pages long. Regardless of the actual number, it is beyond the capacity of any normal human to understand.
This presents a serious problem to the taxpayer: how can he or she know that all the laws have been followed? More likely than not, something has been missed, or some error has been made. In effect, the complexity condemns us all immediately as lawbreakers. All it takes is enough will from the powers-that-be, and incarceration could be yours!
Thus, we live in constant fear, wondering whether we have made a mistake, and then wondering whether that mistake will get caught.
The complexity of the tax code is the impetus for many reform groups to promote their particular plan to “make it simpler.” And so we have the Fair Tax Plan, and the Flat Tax Plan, and others as well. However, even these ideas are sorely misguided as Laurence Vance has so eloquently made clear. Why? Because, just as I said in a previous article in this series, they don’t attack the root of the problem. We can simplify all we want, but without reducing spending the tax burden of citizens is not truly lessened. What is not paid initially will be paid later, and that with interest.
Complexity is a double-edged sword. While it does make it difficult for us to know where we went wrong, it also makes it difficult for the government to know where we went wrong too. However, we aren’t the ones pointing the guns here, so naturally we are at a distinct disadvantage.
I guess I’ll just trust in Turbotax to do the dirty work for me, and hope for the best.
“It will be of little avail to the people, that the laws are made by men of their own choice, if the laws be so voluminous that they cannot be read, or so incoherent that they cannot be understood; if they be repealed or revised before they are promulgated, or undergo such incessant changes that no man, who knows what the law is to-day, can guess what it will be to-morrow. Law is defined to be a rule of action; but how can that be a rule, which is little known, and less fixed?”
James Madison, Founding Father of the Constitution
Thanks to Vijay and Jean Paul for inspiring this installment.