A statement by IRS Commissioner Douglas Shulman got some attention today.
On C-Span Shulman talked about using a tax preparer:
“I’ve used one for years. I find it convenient. I find the tax code complex so I use a preparer.”
A lot of bloggers and readers are using the statement to argue the tax laws are too complex.
That’s like saying Conan O’Brien is too juvenile for the Tonight Show. In other words, duh! Tell us something we didn’t know already!
Nevertheless, it is a good soundbite to hear the Commissioner of the IRS “admit” that he doesn’t (can’t?) prepare his own taxes, whether it’s due to complexity or convenience.
Shulman rightly points out the ball is in Congress’s court, not his. Bush put together a task force that studied ways to overhaul and simplify the tax laws. The task force released a report in 2005 that included some compelling ideas, but the report was largely ignored.
I’m a tax lawyer, which means the marginal value of my labor rises as the tax laws get more complex because fewer people can handle their own tax affairs. Despite it being against my own financial interest, I would love nothing more than to see Congress simplify the tax system.
When I think about how much money we spend to obey the tax laws, through government expenditures for enforcement as well as private expenditures for compliance, and then I realize that none of that money is used to build something or develop something or help somebody, well, it’s a thought I don’t like to dwell on.
“I would love nothing more than to see Congress simplify the tax system.”
Me too!
Look at the laws on inheritance tax. The law changes every year!
Yeah I have more of a problem with the time I spend on taxes than the actual taxes. It pretty much taxes a week out of my schedule each year which I could use to be more productive.
This is pretty comical but at the same time very unfortunate. Our current tax laws are so complex that it in itself causes excessive government spending just to regulate it. I personally am all for a more simple system that not only make it clear cut for the taxpayer but also is simple enough that we as citizens can hold our government more accountable for where our money is being spent.
Ashlee:
I think you hit on something important:
“simple enough that we as citizens can hold our government more accountable for where our money is being spent”
You were probably referring to the spending side of the ledger, and I’m going to take your comment and expand it to what is commonly referred to as “tax expenditures”, which is when Congress passes a targeted tax break for someone or some industry.
If the tax laws were easier to understand, the citizenry would be able to draw the line from point A to point B, e.g. “Congress just passed tax break X, it is going to benefit people with situation Y and save them each Z dollars.” Then public opinion could form and respond appropriately.
But now it’s so complex that when Congress passed tax break X, in many situations it’s not entirely clear who will benefit and who won’t. More importantly, there are so many “tax expenditures” in the tax code that when a member of Congress sponsors yet another tax break for his favorite constituency, no one is bothered by it. It’s business as usual. Which is sad.