Some people believe everything they’re told. Others are not so gullible.
About a week ago, my representative in Congress, Lynn Westmoreland, mailed me a large postcard purporting to offer Tax Tips, A Resource Guide for Your 2011 Tax Return. The card clearly indicated it was prepared, published and mailed at taxpayer expense.
The first “tip” was the headline Tax Day: April 16th.
That was dead wrong. The deadline this year is April 17.
This is all explained on the IRS website, which states this: Taxpayers will have until Tuesday, April 17, to file their 2011 tax returns and pay any tax due because April 15 falls on a Sunday, and Emancipation Day, a holiday observed in the District of Columbia, falls this year on Monday, April 16.
According to federal law, District of Columbia holidays impact tax deadlines in the same way that federal holidays do; therefore, all taxpayers will have two extra days to file this year. Taxpayers requesting an extension will have until Oct. 15 to file their 2012 tax returns.
Obviously, Lynn Westmoreland was off to a bad start, at least with me.
Highlighted in the top right corner of this large postcard was a bubble titled Why I Support the Fair Tax.
In that bubble one can find Westmoreland’s statement that “The U.S. Tax Code has grown to more than 70,000 pages of complex tax law the average American can’t understand.”
I must admit it’s hard for anyone to understand something one has never read. Or seen. Average or not.
But it so happens that I recently ordered myself a brand new copy of the U.S. Internal Revenue Code, so I’d have an up-to-date copy of it. For those of us with tax expertise, it’s the rational thing to do. After all, the law does not usually fall off from the sky.
My up-to-date copy of the U.S. Internal Revenue Code came from CCH in two volumes. And no, there are not 35,000 pages per volume, which would be the case if Westmoreland’s comment was true.
Like fairly normal books, the CCH edition of the Internal Revenue Code comes with a Table of Contents at the front and an Index at the back, which add to the number of pages and help find topics inside.
For greater usefulness, the two CCH books also come with an assortment of references to what recent law may have been before changes reflected in the current law became effective. This material is useful to tax professionals, and there is an abundance of explanations in the books. They are somewhat like footnotes and not part of the law.
My rough estimate is that half of what CCH offers as the text of the Internal Revenue Code consists of these historical explanations. The other half is the real code.
Even with all this extra material, with duplications of tables of contents and indexes, the last numbered page for the code is 5,622, which represents 8 percent of the 70,000 pages Westmoreland says it has. In other words, Westmoreland says the code has over 12 times the number of pages it really has even after all the CCH explanations are counted as part of the code. This should earn a “pants on fire” award.
Dealing with the claim that the average American can’t understand this complex tax law is something else.
The Table of Contents makes clear that the code deals with a bunch of different taxes and circumstances. Early in my career as an actuary I had to learn about calculating the income tax of life insurance companies, for instance, but the average American does not need to bother.
When one examines how the code is structured, one finds it is first divided in 11 subtitles, some of which deal with the financing of presidential election campaigns, coal industry health benefits, or the Joint Committee on Taxation, all topics the average American need not bother with.
The tax topics among the subtitles include income tax, estate and gift taxes, employment taxes, and excise taxes for alcohol, tobacco and other miscellaneous items (like plane tickets and petroleum).
In my estimation, the average sane American has no need to read much of that stuff, which is oriented toward specific industries, situations or problems. The code is like a dictionary, which you consult as you need it.
For instance, the code subchapter on Black Lung Benefit Trusts would be of no interest to me, and it’s only if anyone were to ask me questions on that topic that I would bother looking it up.
It is absolutely clear that repealing the entire U.S. Internal Revenue Code is a practical impossibility. One simply has to look at its structure to realize that.
Is the average American a low-income poorly educated person unable to file a federal income tax return? While my first reaction would be to say that there is no such person as an average American, I certainly reject the notion that most of us are too lazy or ignorant to file an income tax return.
We live in a complex advanced civilization that often overwhelms us. Some people can’t handle computers, let alone Wi-Fi and related gadgets. Many people can’t wire a TV. For all the things we can’t do our free enterprise system generally supplies a solution.
For instance, we have income tax preparers and income tax preparation software. If our schools do not already teach our students how to prepare a simple individual income tax return, they should. You would think that kids who can juggle iPods, iPhones and text messages could handle a 1040EZ form.
I concede there is a constituency to which the Fair Tax promoted by Westmoreland has some initial appeal. The topic can be discussed seriously by serious people at the proper time and place.
My basic point is that whatever it is that we do should never be based on misinformation, and the use of taxpayer funds to spread misinformation about our current tax code wastes the very taxes we pay. No tax can ever be fair that wastes our money.
[Claude Y. Paquin, a Fayette County resident, is a retired actuary and lawyer whose course concentration at Emory law school included taxation.]
