Don’t wait to reform federal tax code

Thanks to the beneficence of the federal government (and the calendar), we Americans had until midnight Tuesday to file our income taxes. It’s too bad filing taxes wasn’t an easier process.

President Trump has pledged to reform our tax code, which, to most people, currently reads like a foreign language. He said tax reform would be a top priority for his administration, but he is up against powerful lobbyists working for the tax preparation industry and also charitable and other organizations that want to keep things just as they are.

Does anyone believe this tax code language is something we should maintain? Business Insider calculates that 31 countries have a simpler tax code than the United States.

The federal government collected record amounts of individual income taxes and payroll taxes through the first six months of fiscal 2017, according to the Monthly Treasury Statement published by CNS News. It collected $695 billion in individual income taxes and $547 billion in Social Security and other payroll taxes.

After all that revenue collection (and there is much more, as every taxpayer knows who purchases any product or service, from your telephone bill, to a ticket on a commercial airline), the Treasury still ran a deficit of $527 billion in the first six months of fiscal 2017.

As Ronald Reagan said, the reason we have a deficit (and a debt approaching $20 trillion) “is not that people are taxed too little, the problem is that government spends too much.”

In a recent interview on National Public Radio, T.R. Reid, author of “A Fine Mess,” a book about our tax system, said: “I was in the Netherlands on March 31 – their tax day is April 1 – talking to a manager. He makes about $200,000 a year. He has a whole panoply of investments, two kids in private schools, two mortgages. He’d have to fill out 12 forms in the United States.

“And I said, Michael, how do you do your taxes? They’re due tomorrow. He says, well, I pop a beer. I go online and see if the government’s got the numbers right. And if they do, I hit a button. Takes five minutes.”

The U.S. government has all of our income information (W2s and 1099s). Most of us have a pattern of deductions, from mortgage interest, to charitable giving. Government computers could do the work and send us a bill for what we owe. We could check their numbers, add or subtract from them as warranted and be done with it, instead of enduring an expensive (if we must hire a tax preparer, as I do) and time-consuming experience no one enjoys.

Instead, taxpayers struggle to decipher the undecipherable while politicians and lobbyists, who donate to their campaigns, continue to block comprehensive tax reform.

This story was originally published April 19, 2017 at 5:01 AM with the headline "Don’t wait to reform federal tax code."