Call for tax code simplicity is fairly quiet
So far, at least 22 people are running for president. Only three have released detailed tax plans, but nearly all call for more simplicity鈥攑erhaps so much that we could file our returns on a postcard.
聽鈥淎 simpler, more transparent tax code will substantially reduce the estimated 6.1 billion hours and $168 billion that taxpayers spend on return preparation.鈥� That鈥檚 a lot of time and money.
Are taxpayers clamoring for a simpler, faster, and cheaper filing experience? Well, they are, and they are not.
A 2014聽survey by Public Opinion Strategies聽found broad support for tax simplification, though the poll didn鈥檛 exactly say what it meant by simplicity. On the other hand, my informal and completely unscientific survey finds surprisingly little demand for a simpler tax code. And some people I talked to like the code the way it is.
For me, filing is easy. I collect receipts, organize some paperwork, and make sure my spouse (a finance guy) knows where to find the documents. Then he spends a few days with TurboTax. For $140 in software and one lost weekend, we file both federal and state returns. This year was a little more time consuming, since we moved in 2014, but overall the process was pretty uneventful.
The same goes for a surprisingly large number of my friends. I asked 14 of them how they felt about tax filing. Three hated it. Two had bad related experiences. Four said they don鈥檛 enjoy paying, but are resigned to it. And five said they kind of like it.
One said, 鈥淚t鈥檚 like buying a new appliance: You know you have to, you know it will cost you, but you know it must be done.鈥� (We actually had to replace our refrigerator last year. It was arguably more annoying than filing taxes since we couldn鈥檛 do it all online. There was a lot of measuring. And we needed to fix a water pipe. But I digress.)
Three shared the Taxpayer Advocate鈥檚 concern. Said a high school teacher: 鈥淚t just frustrates me how complicated and obfuscated the whole process is. It鈥檚 not the amount of taxes I pay so much as the sweat and tears I have to put into actually paying them.鈥� Another friend said, 鈥淢y pain is what I have to pay my accountant.鈥� And another: 鈥淚 dread the surprises.鈥�
Two others have had horrible experiences filing, though not directly because of complexity. One friend had to fire her first accountant: That delayed聽 filing, which in turn delayed her son鈥檚 financial aid application for college. Another experienced similar difficulties, which snowballed into delays for financial aid and medical assistance.
And for some, it isn鈥檛 the filing at all. It鈥檚 writing the check. Said one friend, 鈥淚 wait until April 15 at 11:59 pm to eFile. The process is just painful because of paying.鈥�
Another friend was rather philosophical about it. Her accountant 鈥減ointed out that if I was paying taxes it was because I had made money. I never mind paying to support my country鈥� although I do my best to keep the amount as low as legally allowed!鈥�
Instinctively, she may be on to something. Much of the complexity in the tax code is there to reduce people鈥檚 taxes. A lot of the paperwork we do tracks deductible expenses such as charitable gifts鈥攚hich lower our taxes.
Meanwhile, five of my respondents said they聽enjoy聽filing: They get refunds, or they use the 1040-EZ. One even said, 鈥淚 love doing my taxes. It鈥檚 one of my favorite things, not because I get a refund鈥� I just love closing the book on a year.鈥�
She even finds the sport in filing: 鈥淢y goal every year is to come out exactly even. One year I got it to $20 between 鈥榦we鈥� and 鈥榬efund.鈥欌�� She鈥檚 happy to owe, too: 鈥淲hy lend the government money, interest free?鈥�
Another friend doesn鈥檛 mind making that loan at all. She has extra income tax withheld during the year just so she can get a predictable refund each spring. The cash covers her long-term care insurance, which is due around Tax Day.
Yet, she鈥檚 a big fan of simplicity. 鈥淪impler is better. Always.鈥� She鈥檚 fine with a flat tax鈥攖he epitome of simplicity, if not progressivity. She has a caveat, though.
鈥淛ust raise the minimum wage. Educate people so that they can earn more money and afford to pay taxes. And of course, spend the tax dollars wisely.鈥� (Political-platform-wise, would that be a cross between Rand Paul and Bernie Sanders?)
There are 432 days until the 2016 Presidential election. Between now and then we鈥檙e sure to hear more urgent calls for simplifying the Code. But given my little survey, I鈥檓 not sure that taxpayers really care.
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