A Taxing Situation

"My advice for those who die / Declare the pennies on your eyes / 'Cause I'm the taxman..." ---George Harrison

The days are getting noticeably longer.  This is psychologically a good thing, I think, for most of us. It’s also, rather paradoxically, an anxiety trigger – among countless others – for me.  The winter has almost passed, and with it my chance to hibernate, to get some much needed sleep, and to catch up on long-deferred reading, research, minor home repairs and such.

Yet somehow, time has passed and I’ve gotten very little sleep, nor have I made significant progress on much of anything worthwhile.  You see, taxes have consumed me for the past month and a half.  This year, for various reasons, our tax situation is much more complex than usual, and the calculation process has been brutal.  The “fiscal cliff” deliberations that resulted in delaying IRS approval of half of the forms I need didn’t help matters.  I’ve been pecking away at our tax calculations for several weekends, and I’m still not done. 

Setting aside the endless political debate centered around tax policy - how MUCH one should pay in taxes, how to determine one’s theoretical “fair share,” and whether we’ve become a nation of “47 percenters” or "99 percenters" (I swear, I’m not going there) – there is so much that could be done to improve the nightmare that is tax preparation. 

Here’s something I’ve wondered about for years: other than (illegal) under-the-table, “shadow economy” transactions which aren’t reported anyway, virtually everything that is reportable as regular income has already been reported to the government in the form of W-2s, 1099s, K-1s and the like, before we ever fire up our copies of TurboTax Deluxe. With the recent addition of mandatory cost basis reporting, many types of capital gains are, or will soon be, in this category as well.  

So why is the onus on us, the taxpayers, to apply the government’s convoluted rules to calculate what we owe?  Why, instead, doesn’t the government just send us a bill or a check, as the case may be, based on all the information they’ve already amassed?  They own the rules; they have what I imagine to be a big, honking pile of mainframe computers capable of calculating such arcane annoyances as the Alternative Minimum Tax and capital loss carry-forwards for the whole freakin’ population, in about a day and a half!  

We could then make appropriate adjustments for our charitable deductions, write-offs, and whatnot, assuming that any of these survive the axe of “tax reform” in the coming months, and, depending on the situation, just cash the check, pay the adjusted bill, and move on.  The states can and should follow the same process (or better yet, abolish their state income taxes... but that's another blog rant.)

Think about it… when you make a purchase, whether small, like a meal, or large, like a car… does the merchant require you to use your own, purchased software to calculate the netted-out bill?   Hell no… the McCashier presses the little button with the photo of a Big Mac on it, then the fries-photo button, then the dollar-sign button, and your total, including tax, is tabulated.  You pay, and your change comes swirling down into the little chrome SARS pit of a germ bucket for retrieval. Or, in the case of the car, the “Finance manager” sits you down in his tiny, shared office that, curiously, reeks of cigarette smoke despite being in a “non-smoking” building; offers you some bad coffee, and flogs you with an imaginary rubber hose in an attempt to get you to buy a ten year warranty and rust preventative.  Depending on your own fortitude, the extra charges either are or are not added to the invoice, but in any case you are, in the end, presented with a bill, and in exchange for your check, you’re handed the keys. 

OK, so the retail purchase experience isn’t always pleasurable; but on the scale of “discomfort as compared with a colonoscopy procedure” it’s much less of an imposition than calculating income taxes.