Income tax form complexity as a tool of economic oppression

When income tax forms are challenging for even highly educated people to complete

and

average Americans are not provided excellent education in personal finance or mathematics

the result is

taxation without representation.

I thought we clarified the American position on that at the Second Continental Congress in July of 1776.

Financial education is a vital issue of class and privilege.

A person without a sound understanding of his/her own finances will always be more vulnerable to the vagaries of economics, and recent history shows no effort on the part of the government, which is fueled by tax income, to level the playing field for those who can’t afford teams of accountants and lawyers.

In my public high school, we were taught how to fill out the income tax form 1040EZ in a mandatory class called Personal Finance. (That waste of academic time also included lessons on how to fill out a McDonald’s job application and how to fill out a personal check, demonstrating just how low the bar was set for students’ financial education.) 1040EZ is the simplest possible tax form one can use, however, and presumably requires the least instruction to master. And, according to the latest IRS tax statistics, only 16% of Americans filed using the 1040EZ income tax form in 2014. Its use is too restrictive for the average American, and, worse yet, some people might choose it because it is less daunting to complete, thus losing out on deductions that would return their own excess tax payments back to their own pockets.

It takes me about two days to complete our household taxes, not including time spent organizing paperwork early in the year. For at least a decade, each year there have been ambiguous points of procedure requiring extra research and some stress as I wonder if I “got it right” or might face a tax audit or penalty. If a college graduate with a degree in math* struggles to do her taxes, average Americans must also be struggling. They probably struggle more.

Paying personal income tax is mandatory, which makes it unreasonable to make them too complex to be completed without professional help. It is incumbent upon the federal government to make the process of completing an average income tax filing possible by an average American citizen. Anything else is un-American.

We could attempt to increase the numeracy and financial literacy of our citizenry. As appealing as that is, the fact that we are struggling to achieve universal mastery of basic skills like reading and simple mathematical computation makes me question the likelihood that this is practical.

The more reasonable solution is to reduce the complexity of the tax code with which all Americans must comply. Only political will prevents taking this step. I suspect that the ideal is not as minimal as Ross Perot’s flat tax proposal of the early 1990’s, but I’m positive it is less convoluted than the current U.S. Tax Code with 51 Titles (sections) and thousands of pages.

Our Republic depends absolutely on an involved and educated citizenry to self-govern. Comprehensible policies are the least we should expect from our government agencies.

The filing deadline to submit 2016 tax returns is Tuesday, April 18, 2017. Are you ready to file?

*Mathematical & Physical Sciences with a concentration in Computer Science, admittedly not including specific instruction in accounting

3 thoughts on “Income tax form complexity as a tool of economic oppression

  1. I agree with your article. I recently listened to a podcast called ‘Planet Money’ from NPR where they were discussing this issue and solutions from other countries. For example, in the Philippines, the tax collectors work hard to weed out any celebrities/public figures who engage in tax evasion and this deters the general public from doing so.

    Anyway, I would appreciate it if you could check out my new economics blog (https://everydayeconomix.wordpress.com). Your feedback/comments will mean a lot to me.

    Thanks and have a great day,

    Guntash

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