Tax System So Complicated, Congressmen Can’t Understand

Many of the members of the House Ways and Means Committee, the people who wrote our tax law, hire someone to figure out their taxes.

Many lawmakers who sit on the tax-writing committees in Congress hire professional preparers to fill out their tax returns, rather than try to decipher by themselves the laws they’ve written. Three of the four senior lawmakers on the Senate Finance and House Ways and Means committees, the panels in charge of writing tax laws, turn to paid professionals to file their annual returns. The exception is Ways and Means Committee Chairman Bill Thomas, R-Calif., a former college professor who said he has prepared his own return “forever” and that he’d wait until close to the deadline to file. “There’s no reason for me to pay Uncle Sam — pay, you heard that — until I have to,” he said.

According to IRS statistics, that makes these members of Congress much like the rest of the nation. More than 60 percent of taxpayers use professionals to have their returns prepared and filed. The number typically increases a little each year. Some lawmakers have more complicated financial lives than the average taxpayer, making their tax returns more complicated. Some said they had a professional do the job to guarantee the return’s accuracy.

But a few prepare their tax returns themselves, including Rep. Paul Ryan, R-Wis., who said he does it “just so I can go through the process.” Ryan, however, does ask an accountant to check the return for accuracy. Sen. Rick Santorum, R-Pa., usually prepares his own taxes using computer software. Sen. Mike Crapo, R-Idaho, prepares his and his children’s returns and mails them to the IRS.
Rep. Jim Ramstad, R-Minn., doesn’t, but he agreed it might be a good idea to try. “I think it is important that we operate in the real world,” Ramstad said.

An amusing story, if not terribly enlightening. Members do tend to have more complicated returns than the average Joe, what with two residences and some unusual commuting expenses.

Still, there’s little doubt that the tax code is ridiculously complicated. Until this year, with my return complicated by a marriage, the sale of one home and the purchase of another, I have done my own taxes. Until recently, doing so was a relatively simple, since my income was almost entirely from wages plus some interest and dividends reflected on 1099 forms. As income from side businesses and the resultant business write-offs entered the picture, though, it got much murkier, even with tax software.

One would think that reasonably educated people would be able to fill out their taxes confidently and accurately. This is simply not the case. As we have learned in recent years, even those who calculate returns for the IRS do not produce uniform results when processing identical returns. The system is unarguably too complicated.

Unfortunately, we have decided as a society to use the tax code as a means of social engineering rather than simple revenue collection. We favor the married over the single, parents over the childless, and homeowners over renters. The number of deductions, exemptions, and offsets is staggering. The result of which is that people, including professional accountants, essentially take an educated guess at their taxes. And almost noone, myself included, knows what percentage of their income they actually fork over to Uncle Sam.

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James Joyner
About James Joyner
James Joyner is a Security Studies professor at Marine Corps University's Command and Staff College and a nonresident senior fellow at the Scowcroft Center for Strategy and Security at the Atlantic Council. He's a former Army officer and Desert Storm vet. Views expressed here are his own. Follow James on Twitter @DrJJoyner.

Comments

  1. Rick DeMent says:

    Yeah, but if we just got rid of the ptogressivity it would be so much simpler … right?

  2. James Joyner says:

    Rick,

    The progressivity angle–if you simply mean graduated rates–doesn’t add much complexity. It’s just a matter of which table you look at.

    I think even most flat tax advocates want to introduce some element of progressivity into the system, if nothing more than a fairly high standard deduction.

    My preference would be to have no income tax at all but rather some sort of consumption tax. Even there, though, we could have some sort of progressivity by not taxing groceries, medicines, and the like.

  3. Herb says:

    The point is “That the tax code is far to complicated”.

    Now, the question is “Why is the tax code so complicated”

    I submit that our wonderful members of the Senate and House have made the tax code what it is because it allows each member the opportunity to “take Care” of their favorite Person, company, Campaign Contributor, and self interest into account as a payoff for their selfish, self centered and financial self serving support.

    It doesn’t take a “rocket scientist” to figure out the “Tax Corruption” that has and is taking place in Congress.

    Now as always, the IRS is and has been the “police Force” that supports this corruption brought on by both Democrats and Republicans and paid for by everyday hard working Americans.

  4. floyd says:

    it’s really quite simple. to quote kingfish[from amos & andy]”yes suh amos, you know duh BIG PRINT giveth and the fine print taketh away”

  5. Eneils Bailey says:

    Herb,
    You got that right, Congress is the biggest impediment to any meaningful tax reform. Too much money and political influence there to lose if they pass a really simple tax schedule.
    The other hurdle is the socialist left in this country who think their beloved progressivity schedule won’t be there to soak the rich. Any serious reforms that I have read about protect the low income and lower-middle income families. High wage earners will continue, as they always have to shoulder most of the tax burden in this country.

  6. McGehee says:

    I see Rick is still fighting the last decade’s rhetorical battles…

  7. I’ve long been ofthe opinion that the number one biggest reform we should impose on our tax code is an absolute requirement that members of congress MUST prepare their own taxes, and cannot hire anyone else to do it or use any software to help them.

    You just wait and see how quickly the code gets cleaned up if we do that.

  8. bryan says:

    The very fact that over 60 percent of americans use tax professionals will ensure that there will never be meaningful tax reform. There are too many jobs invested in deciphering the code.

  9. Herb says:

    One additional thought, I bet that about 99 percent of our wonderful members of the Senate and House who voted for the tax codes, didn’t have a clew what they were voting into law and didn’t give a damn to begin with.

  10. akdfjo says:

    Congress is the biggest impediment to any meaningful tax reform.

    The other hurdle is the socialist left

    I love it Eneils Bailey! The Conservative Congress is the biggest impediment along with the “socialist left”?

    I am not sure what planet you are on, but the socialist left is practically non-existent in the country–they are certainly not in a position to influence challenges to the tax code.

  11. Herb says:

    Akdfjo:

    “The socialist left is practically non exist ant in this country:

    I am not sure what planet you are on either. What do you think the Democrats are but “Socialist Lefties”

    Gads man, get with it and wake up.

  12. Kent says:

    As a Ph.D. astronomer, I figured I had the intelligence and math skills to do my own taxes, and I did for many years. I finally gave it up last year, and started using tax preparation software.

    I still have no confidence that I’m doing them right. All I can claim is that I’m doing them as best and honestly as I can. I doubt that will save me from the I.R.S., but then I can’t do anything about being hit by a giant meteor either.