Monday, April 17, 2006

Good Morning, and welcome to Tax Day!

Actually, yesterday - April 15th - was Tax Day, but since it was a Sunday, taxes are due at midnight tonight. If you have been reading this blog long enough, you know that I have some pretty strong feelings on the subject of taxes, so I won't rehash all of that. But I did hear an interesting interview a few weeks ago on the subject of the complexity and fairness of our tax system. The interviewee, a tax policy expert of some sort or another, maintained that we have a tax system that is as fair as is probably possible. He stated that a fair tax system must of necessity be complicated, while a simpler system would of necessity be unfair.

In a way, I agree with him. The complexity of our tax system grows out of our use of it as a social engineering tool rather than a revenue generator for the government. Every time we craft a tax break or incentive for some special interest or group, we add an element of complexity that wasn't there before; thus, increasing fairness (as measured by the opinion of those who are getting the breaks) means increasing complexity. On the other hand, a "flat" income tax which charges the same rate for everyone regardless of income, would seem to penalize those with smaller incomes.

I don't know the answer, but I do know that our system, fair or not, is far too complex for the average citizen to understand. And if you make a mistake because you can't understand the system (which many IRS advisors don't understand, either), the penalty is exactly the same as for deliberately cheating on your taxes.

And that's not fair.

So get your taxes paid today so that you can sleep well tonight. Unless, of course, you are worried about an audit...and I can't help you there.

Have a good day. More random thoughts tomorrow.

Bilbo

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