Sometimes, I wonder how they pay their taxes in different countries.
In Russia, two big, burly guys probably knock on your door and say, “Give us all the money you haven’t hidden yet.” Then they pocket some of it and give the rest to some apparatchik, who pockets some of it and then passes it along to some other official, who takes a cut. On and on and on it goes until, finally, at the end of a long road, some of it goes to the government. The Russian government takes that money and uses it to pay for things like snowplows and secret prisons.
Of course, that is not true. The Russian process of collecting taxes is probably very similar to our own. With similar results. Well, their penalties for not paying may be stiffer: As far as I know, the IRS doesn’t employ a firing squad. Yet.
If there’s one thing almost everyone can agree on, it’s that they don’t like the way the government spends their hard-earned tax dollars. Or even their inherited tax dollars. The other thing almost universally agreed on is that nobody likes all the hoops they have to jump through just to file their taxes. Whenever someone says, “The government never created a single job,” I counter with, “They created H&R Block.” Not to mention the thousands and thousands of accounting firms across the country that work for large corporations, and entire departments within those corporations that do nothing but work on “tax compliance.”
Some people say this puts our country at a competitive disadvantage with other countries. Those people have clearly never been to France, Germany or the 60 other countries that make our complex tax system look like a game of “Go Fish” compared to their versions, which are more like 3-D chess. Their total corporate taxes may end up being lower than ours, but that doesn’t mean they’re simpler to calculate.
Why can’t we make the ordeal of paying taxes simpler? Most of us don’t mind paying for necessities like roads, schools, police, firefighters, EMTs and the military -- what we mind is making it so difficult. Just let us write a check and stop making us fill out forms. We have created a system that reminds me of getting a letter with a 50-cent stamp on it that tells me that I owe someone 13 cents. Not only is it a waste of money, it’s a waste of time and paper. And this is in the age of computers, where it could only take a simple click of a button to avoid this kind of nonsensical book-balancing.
We’re not alone; it seems all governments love paperwork. ”Fill out this form in triplicate” is the motto of governments all over the world.
If the government spent $10 to collect $9, the officials in charge would stop it as soon as they realized it (one would hope). The trouble is, THEY aren’t spending the $10. You are. It is costing you, the taxpayer, time and money to file your taxes -- not the government.
What’s their incentive to stop doing business as usual? Not much. Maybe a law that makes Congress members prepare their own taxes would do it. Do you remember voting for something called “Schedule C”? Do you know what a 1099 is? My accountant does, but I don’t. And this, they tell me, is just the basic stuff. Yet somehow this Byzantine system has survived, and better yet, it changes each year.
And here’s the strangest thing of all: The government knows how much tax I should be paying before I fill out the forms. I know because for the past few weeks, I’ve been getting tax documents in the mail. If I make a mistake -- accidentally or on purpose -- they’ll know. After all, they get the same documents I get. So why not just send me a bill every year? If it looks OK, I’ll send them a check. If not, I’ll call the accountant.
(Contact Jim Mullen at email@example.com.)