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.