Thursday is the Big Day.
In the few hours remaining until then, the midnight oil is being burned, millions of little electrons are calculating, hundreds of gallons of perspiration are being mopped up, countless pencils are being ground to stubs, numberless ball point pens are running dry, inkjet and laser printer refills are becoming premium items, the USPS is salivating over the bonanza of stamp sales (enough to ward off another round of postage increases?) to ship oversized and overweight letters to the IRS.
It was back when Those Who Know Best decided to shift the tax deadline from March 15 to April 15 that it seemed like such a marvelous idea – an extra month to get the 1040s ready – and a postponement of the final tax payment if one was called for.
On the other hand, if a refund were coming and taxpayers procrastinated until the last minute, that amounted to another month’s interest-free loan to the government. (Think of it as a patriotic effort to help ease the financial crisis that seems to be synonymous with big government – an interest-free loan from taxpayers rather than having to pay interest on government bonds.)
I have no idea how many different tax forms there are now, but the number seems to have grown exponentially over the years.
And much the same could be said for the tax code.
When I lived in Grand Rapids, I had an income tax question and went to the IRS office there for an answer. The clerk I was talking to looked puzzled, shrugged his shoulders and offered me access to a hefty (probably abridged) copy of the tax code.
“You can find the answer in there,” he said as he turned away and prepared to “help” the next customer in line.
The Michigan tax package seems to have been trying to keep up with the Washington product.
My recollection is that it used to be relatively simple: start with the U.S. adjusted gross income, apply a few mathematical formulas and be done. Now the state package is growing with added forms designed to cover an ever-growing list of special interest groups and exceptions.
The whole thing got its start in 1861 when the government levied its first personal income tax: three percent of all incomes over $800, to finance the Civil War.
Since then, various tax brackets have been introduced and adjusted with the upper level rate soaring as high as 91 percent (during the Great Depression and World War II) while the lower rate has bounced around between 1 and 15 percent.
Now, the official tax code is 16,000 pages long and its table of contents accounts for nearly 150 of those pages.
Looking at all the effort that goes into preparing and documenting the annual 1040s, there’s a certain attractiveness of a simple flat rate tax which would do away with the hours of calculating and re-calculating and re-re-calculating (and then discovering the day after it’s in the mail that there was yet another error).
However, keep in mind that such a proposal would undoubtedly trigger massive unemployment as tax lawyers, tax preparers and accountants suddenly would find themselves without anything to do. Additionally, those whose duties include preparing, compiling and producing the reams of tax paperwork and documents also would be out on the street. (Maybe there could be a small surcharge on the flat rate tax to care for them.)
One of my former newspaper colleagues came up with a tongue-in-cheek proposal last weekend – a tax based on savings. He said that income could be matched against what was saved and the tax levied correspondingly – the larger the savings account, the smaller the tax. He thought this would promote thrift and frugality.
Quips ‘n’ Quotes: Humorist Dave Barry has put his own spin on the annual battle of the 1040s:
“It’s tax time. I know this because I’m staring at documents that make no sense to me, no matter how many beers I drink…
“It’s income tax time again, Americans: Time to gather up those receipts, get out those tax forms, sharpen up that pencil, and stab yourself in the aorta…
“We’ll try to cooperate fully with the IRS, because, as citizens, we feel a strong patriotic duty not to go to jail.”
Henry Passenger’s column appears each Wednesday in the Tuscola County Advertiser. He can be reached at [email protected]