Valerie Schultz: Taxes aren't bad, as long as they're fair
| Thursday, Apr 16 2009 04:34 PM
Last Updated Thursday, Apr 16 2009 04:34 PM
Tax time reminds me of a funny story that my dad tells about the time the IRS, back in the last century, summoned him for an audit of his tax return. He threw every receipt and check stub he could find into a box, an unorganized flurry that he brought to his appointment. He also brought my brother and me, preschoolers at the time. With an affable smile, he dumped the mess of papers onto the desk. Then my dad subtly encouraged his little monster kids to do pretty much whatever we wanted around the office. The audit ended quickly, amid ribbons of ejected adding machine tape: the IRS agent couldn't wait to get us out of her office. She later phoned to say that his case had been closed without penalty.
My dad still gets a kick out of describing his brilliant ploy. He still relishes the delicious feeling that he got away with something. When it comes to the complicated process of filing and paying our taxes, we often feel like we should be running a scam. Otherwise, we suspect we're being taken. At least, I do. I always feel like everybody else knows tax secrets that I don't.
I don't have a problem with paying my taxes, federal, state, local, whatever. I want to do my civic duty. I want safe bridges, good schools, clean water and air, patrolled streets, safety nets for struggling people. But I hate feeling stupid. I also hate feeling like maybe I am paying more than I have to because I am an ignorant fool. I'd rather feel like we Americans are all paying our due together.
My husband and I used to do our own taxes, first by hand, and then with the help of various computer programs. As our business affairs grew more complex, however, we lost confidence. As a freelance writer, I am self-employed, in addition to my day job, and my husband does consulting work besides his work as a university professor. Our taxes gradually involved a lot more than copying the numbers from our W-2s into the correct boxes on our 1040. We worried that we were missing deductions that would cost us now, or worse, making mistakes that would cost us even more later. We despaired of ever feeling like we actually understood what we were doing. We also knew that we were loophole amateurs.
So we have, over the past couple of years, hired professionals to prepare our taxes. We appreciate the security of knowing that someone competent will have our backs if we're audited. We are willing to pay for peace of mind and for every possible break. But I have noticed that even among the tax professionals we have worked with from year to year, there are differences of opinion in areas such as how much should be withheld from our paychecks beforehand, or what exactly is a legitimate business deduction. I think of taxes as numbers, as arithmetic, as black and white, but it seems there is an art to calculating taxes. It seems there are sizable gray areas amongst philosophies and methods of accounting. The indecipherable tax code, which mutates from year to year, only adds to the mystique of each professional's decisions regarding our finances.
As I stare in awe and confusion at our latest tax returns, I find myself wondering if our Founding Fathers meant for the process of paying taxes to be so complicated and illogical and arcane. Shouldn't reasonably intelligent, patriotic adults be able to figure out what they owe on behalf of a functioning democratic government? Shouldn't those same citizens be able to trust that they are paying a just and fair share of the cost of running a country? I know that most modern taxpayers feel in their hearts that they are paying way more than their fair share, that they are in fact being violated by their tax returns, and that someone richer, more stylish and better-looking is getting off scot-free at their expense.
We obviously need tax laws that are clear, workable and fair-minded. I was interested to hear on the radio recently that President Obama has chosen no less a financial whiz than Paul Volcker, the former Federal Reserve chairman, to head a panel that is charged with overhauling and streamlining the tax code. The panel is to cover three main areas: "One is tax simplification, the second is closing tax loopholes and reducing tax evasion, and the third is reducing corporate welfare," says Peter Orszag, the White House budget chief.
To which we taxpayers say, amen.
I don't always grasp the pros and cons of the different tax theories proposed by different camps: the flat tax or the progressive tax, the value-added tax or the sin tax.
I don't have a tax agenda. I mainly want assurance that the taxes I do pay, along with everyone else's, are assessed fairly and justly. I'd also like to feel that our tax dollars are being spent wisely and carefully. But until we build a perfect world, I'd settle for the first.
