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A Modest Proposal For Simplifying The Tax Code

[ Posted Monday, April 20th, 2009 – 16:13 UTC ]

President Obama called last week for simplifying the United States income tax code. This issue may be too big for even Obama to succeed at changing, though. Because while politicians love to rail against the briar patch that is our tax code, and love to call for "reforming" or "simplifying" it, very little progress is ever actually made at doing so. But there's an easy one-step solution for this systemic problem that would go a long, long way towards simplifying the thousands of pages of instructions from the Internal Revenue Service. This idea could fit on a postcard: "Force Congress to do their own taxes. With no help. And then immediately audit all of them, and post the results publicly."

But before we get to the solution, let's take a look at the problem. Our tax code is complex, by design. There was a great overview last week on the Huffington Post which explains why this is so. In a nutshell: the tax code is written by Congress (who writes all laws). Corporations lobby Congress for favorable language in the tax code, which will benefit only them (or, at the most, only their industry). This language is purposely intended to be as obscure as possible, to hide what they're doing from everyone else (who might object to such favorable treatment as being "unfair"). Most people don't read even one-tenth of the whole tax code when filling out their own returns, which further obscures such favorable treatment. Which leaves everybody with extremely puzzling and obscure verbiage outlining how taxes are to be paid.

From Obama's remarks on tax day itself, his call for simplification:

Finally, we need to simplify a monstrous tax code that is far too complicated for most Americans to understand, but just complicated enough for the insiders who know how to game the system.

So I've already started by asking Paul Volcker and my Economic Recovery Board to do a thorough review of how to simplify our tax code, and to report back to me by the end of this year.

It's going to take time to undo the damage of years of carve-outs and loopholes, but I want every American to know that we will rewrite the tax code so that it puts your interests over any special interests. And we'll make it easier, quicker and less expensive for you to file a return, so that April 15th is not a date that is approached with dread every year.

But putting Paul Volcker to work on it may not do the job. Which is where my modest proposal comes in.

Every year, anywhere from February to April, every member of Congress should be locked in a room with their taxes. They would be allowed: (1) paper, pencils, that sort of thing, (2) pocket calculators to do any math, (3) all their receipts and paperwork, (4) all the IRS instruction books and forms they needed, and (5) a telephone with a direct line to the IRS tax help line. That's it. Nothing else.

They would NOT be allowed the following: (1) no computers, and no TurboTax or any other "tax assistance" software, (2) no accountants or tax preparers or anyone else they normally pay to do their taxes, (3) no outside communication with anyone else at all, and (4) no food or water. Well... OK, that last one may be going a bit too far, I have to admit. But as for the other three, they can be summed up as: no help whatsoever other than the taxpayer-funded help line to the IRS themselves.

Each Congresscritter would have as much time as they needed. They would have to complete and actually file their taxes in order to get out of the locked room.

Their tax forms would immediately be turned over to IRS auditors, who would go over them with a fine-toothed comb. And while their tax returns themselves wouldn't be made public, the results of the audits would be. "Congresswoman Smith claimed $45,829 in deductions that she was not legally supposed to claim, and she is therefore assessed not only the taxes due, but also $8,000 in penalties." Or maybe, "Senator Jones actually paid too much in taxes, and if he had claimed what he was legally entitled to, he could have saved himself $12,395 in taxes. These taxes will not be refunded to him, unless he files a 1040X form to correct his filing. And we're not going to tell him where the savings are."

Any member of Congress who filled out their taxes correctly would be publicly praised by the IRS instead: "Representative Brown's taxes were 100 percent correct."

How long do you think it would take to simplify the tax code if this were a requirement for every member of Congress? You think they might have some incentive to simplify things if they knew they would have to run this gauntlet every single year? Having their mistakes publicly broadcast (both underpaying and overpaying) would show the public that even the folks writing the tax code don't understand it.

Without this goad, Obama and Volcker can study the issue until the cows come home, but little incentive exists for any meaningful change from Congress itself. This is how they pay off campaign contributors, and they truly don't want to upset that applecart. Meaning the problem is one of political will, not merely one of simplifying some language here and there.

And I can't think of a better way to achieve that goal than by making Congress do their own taxes with nothing more than a pencil and a calculator.

Of course I realize this whole idea is facetious, since requiring Congress to do so would require a law. And Congress passes the laws. But dreaming about it sure makes figuring my own taxes out easier to bear, so you'll have to excuse me for this flight of fancy.

 

Cross-posted at The Huffington Post

 

-- Chris Weigant

 

4 Comments on “A Modest Proposal For Simplifying The Tax Code”

  1. [1] 
    Michale wrote:

    Following in the theme of how life should imitate art, I would suggest everyone read Tom Clancy's EXECUTIVE ORDERS. It's an eye-opener on a broad range of subjects that is today's headlines..

    Regardless of that, I like your idea, CW...

    It seems a common theme over the last couple months here on CW.com is to force Congress to experience things that the commoners do...

    By doing so, there would be a whole slew of changes that would come down the pipe...

    Michale....

  2. [2] 
    fstanley wrote:

    Given the recent spate of red faces I think that every member of Congress & the Administration should have to take a workshop on how to fill out their taxes as part of the orientation before they are seated.

    ...Stan

  3. [3] 
    LewDan wrote:

    You're talking about people who routinely exempt themselves from the laws they pass?! It'll never happen.

    Great idea though, and would make a super reality show! It also mirrors my own modest proposal for reducing the size of government... That no legislator can vote on a bill they haven't actually read, personally, and in full.

  4. [4] 
    Chris Weigant wrote:

    Michale -

    It is a sad commentary indeed that you would use the word "commoners" and that I would know exactly what you mean, in this -- a supposedly classless society. Just wanted to point that out.

    Yeah, I've been feeling awfully populist lately. Must be Spring, when a young man's fancy turns to beating Congress about the ears with the laws they expect all of us to follow... or something like that.

    LewDan -

    Now that's an even better idea than mine! Reality show: "Congress tries to do their taxes" -- Woo hoo!

    Stan -

    Your suggestion would make an ideal pilot for the show LewDan just suggested!

    :-)

    -CW

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