I’m not a big fan of bitching about April 15th, because let’s be honest: nobody put a gun to our head and forced us to become accountants. We knew what we were getting into when we sat for that CPA exam; we would be trading long hours and tight deadlines for job security and sex appeal. Lots and lots of sex appeal. So it’s like I tell my three-year old son: if your pain is self-inflicted, don’t come crying about it to me.
/takes swig from whiskey bottle and returns to watching COPS
That’s why I can appreciate this list of 10 awful things about tax day; because it’s written from the perspective of non-accountant. But more importantly, it makes some valid points about the absurdity that is the current state of affairs with the U.S. tax law:
Some highlights include:
1. Paperwork: The U.S. tax code is insane and out of control. It’s tripled in a decade. It now runs to 3.8 million words. To put that in context, William Shakespeare only needed 900,000 words to say everything he had to say. Hamlet. Othello. The history plays. The sonnets. The whole shebang. But the IRS needs four times as many words? Really?
3. How they treat investment income: The tax treatment of investment income is arbitrary and stupid. We treat debt and equity differently for companies and investors. It’s irrational. The rules encourage debt. And we treat long-term capital gains better than short-term ones. That’s absurd. We only buy securities because we think they are undervalued. Why is it better if they rise in price slowly instead of quickly?
7. Taxing overseas Americans: The United States is about the only country in the world that taxes its citizens on all their worldwide income. And, most outrageously, it does this even if they live overseas. Yes, even on money they earn overseas, and on which they are already taxed overseas.
10. Alternative Minimum Tax: What kind of moron thought this up? Forty years ago Congress — sorry, I gave you the answer — was shocked to discover that the tax code had become so complicated and insane and riddled with loopholes and the like that a few very rich people were able to game the system successfully. They were paying little, if any, tax. The sensible response to this was to treat it as a wake-up call, and simplify the entire system. Congress instead added yet another layer of complexity. They created a second, parallel tax code, the AMT. You have to run your tax calculations under both, and pay whichever bill is higher.
Valid points, all. And a refreshing change from the standard “I’ve been here 77 straight hours” game of one-upmanship CPAs engage in during busy season that invariably devolves into something out of a Monty Python sketch:
Accepting that we’re often our own worst enemies during this time of year — its long been my contention that CPAs have mastered the art of craftily spinning procrastination into martyrdom — that’s not to say we’re not within our rights to ponder if there’s a better way to manage the April workload. And perhaps I’m running the risk of taking food off my table, but I like what David Cay Johnston over at Reuters has to say on the topic. Couldn’t we eliminate 100,000,000 basic “W-2 and standard deduction”‘ tax returns by having the government automate the income tax calculation based on the copies provided to them of the relevant information?
Makes sense to me. Expand the W-4 to include the taxpayer’s filing status and dependent information, and if the taxpayer fails to file an expanded return by April 15th, let the IRS do it for them. Of course, that would likely force companies like H&R Block and Turbo Tax into extinction, but hey; it’s a cruel, cruel world.