Reformed, but not simplified
Published 11:41 am Wednesday, December 27, 2017
By Tom Purcell
If only tax simplification were true.
You see, one of the promises of the Republican tax-reform bill was that taxes would become way simpler for the majority of Americans to file– that we’d be able to file our taxes on a form the size of a postcard – but that isn’t entirely so.
Email newsletter signup
Sure, the standard deduction will almost double, from $6,350 to $12,000 for single filers, from $12,700 to $24,000 for married couples who file jointly.
That means many lower – and middle-income taxpayers will be able to file their taxes simply.
But for many of us, tax filing will be just as complicated as it has always been – if not more so.
An H&R Block representative told FiveThirtyEight: “While much attention has been given to the increase in the standard deduction, many taxpayers will still be required to file multiple forms and worksheets for various sources of income and credits that aren’t going away.”
Well, that’s just great.
The tax code is still incredibly complicated – so complicated that, according to the National Taxpayers Union, Americans spend 7.64 billion hours and $227.1 billion complying with it every year.
Consider: When the income tax became law in 1913, the tax code was 16 pages long. Now it is nearly 75,000 pages long!
I remember stumbling upon my father’s 1959 income tax return a few years ago – boy, was filing easy for him that year.
In 1959, the code ran about 15,000 pages – one-fifth its current size.
My dad was a heavy smoker then – who wasn’t? – and was able to deduct every penny he paid in cigarette taxes.
He was able to deduct every penny he paid in gasoline taxes. If we had such a perk now, the federal government would go even more broke than it is now.
And he was able to deduct every penny he paid in Pennsylvania sales tax , another wonderful perk that would save today’s average Pennsylvanian a boatload in federal taxes every year.
He took a $600 deduction for each of his two dependents, my sisters Kathy and Krissy – a lot of dough relative to his income.
And he paid only 2.5 percent of his income toward FICA (then, Social Security; now, Social Security and Medicare) – one-third of what we pay now.
In any event, despite a fair number of deductions available that year, his tax form was one sheet of paper printed on both sides. He had no calculator, nor did he need one.
He did a test run in pencil on one copy of the form, then finalized a second in ink and mailed it in. He always got a refund.
Look, there are many upsides to the Republican tax bill.
Everyone whose taxes are reduced will enjoy that.
Corporations will be flush with capital to invest, thanks to reduced corporate taxes and a repatriation tax that incentivizes U.S.-based companies doing business overseas to bring their profits back to America.
And best of all, job creators will be eager to invest, thanks to an end to complicated depreciation schedules and the ability to write off 100 percent of their equipment investments in the current tax year.
These and other changes in the Republican tax bill will, I hope, stimulate significant economic growth.
But tax filing is not going to get easier.
That’s why I look back fondly to 1959. I didn’t waste hours that year getting hundreds of receipts in order. I didn’t pay a dime in taxes.
I wasn’t born until 1962.
Tom Purcell is a syndicated columnist.