KISS me, please

Tax ReturnSurely you have heard of this acronym, which stands for “keep it simple, stupid.” Which reminds me of an old joke: A guy has a flat tire on the street next to the insane asylum. He removes the lug nuts from the wheel, pulls it off and replaces it with the spare from the trunk. But as he reaches for the lug nuts, they all fall down the drain gutter. Dismayed, he says to himself “Dang—how am I to get home?” Then he hears a voice coming from a window high up on the building behind him. “Hey, you down there—just take one lug nut off of each of the other three wheels and use them on your spare.”

The driver is elated, “Wow, thanks, man. What is a person as smart as you doing in the crazy house?”

The voice responded, “I may be crazy, but I’m not stupid.”

Which brings me to my IRS Form 1040.

The US Internal Revenue Code is now over 73,000 pages in length. If you do the math, you will find that placing the pages end-to-end would create a single scroll about thirteen miles long. The printed instructions alone are over 200 pages.

As you may know, the 1040 includes Schedules A, C, D, E, F, J, R, and, in the event you are self-employed, SE. If you are an average tax-payer the IRS says that you can expect to spend about 22 hours completing your 1040—this includes the “burden,” the aptly chosen term used by the IRS, for rounding up all the information. For 1040A filers? Only about half that at 10 hours. Okay, let’s keep it simple, then, and use the 1040EZ (as in “easy.”) But wait, that still takes around seven hours. And that’s the one that basically says, “Just send us all your money and you won’t have to fill out that longer form” (I overcame the urge to stick on an IRS smiley-face emoticon here.) The IRS says the average cost to complete a 1040 is $290 (that’s tax deductible, by the way: See IRS Publication 529 re: miscellaneous itemized deductions subject to the 2%-of-adjusted-gross-income limit, Schedule A (Form 1040), line 23).

Apple CEO Tim Cook, who recently testified before the Senate on legal tax avoidance, commented that “Apple’s tax return is two feet high. It’s crazy…it’s time to trash [the code] and go back to something simple.” Well said.

There have been numerous calls from the citizenry beyond Mr. Cook to simplify the US tax code. These include the flat tax, the fair tax, return-free filing and a national sales tax, to name a few. Although I profess no expertise beyond the norm regarding the tax code, each of these proposals has the same end in mind: get rid of the craziness, keep it simple and don’t be stupid.

[FYI: If you were wondering how the IRS might write the regulations for bird control at airports (no doubt this has been a lingering desire), read my take on “Air Force One gets the bird.”]

Image courtesy of Arvind Balaraman.

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4 comments

    Yes….Skip, Apple’s tax forms may be two feet tall but they are a corporation. A very large international corporation. Mr. Cook doesn’t exactly specify if the tax paperwork includes other country’s tax forms in that pile as well. They have so may exemptions and deductions and things to report, far more than most citizens. By far for the majority of American’s their tax form is at the most two pages and require only three or four lines where they need to put their annual income in, the 1040EZ. If a person can’t figure out an 1040EZ and it takes seven hours to fill out I would consider them mentally challenged. For a corporation it may be advantageous for the tax forms for THEM to be simplified but if I were them I’d be careful what you wish for. They could wind up losing deductions and credits that they love but with their lobby groups buying congress that may be unlikely. The mantra seems to always be we need to simplify the tax code. Well, for most people, it is simple. It’s about as simple as it can be. Most American’s without thinking follow along with the corporate mantra but the reality is their forms are already pretty damned simple. It’s the corporations that that are pushing it but are using the average persons dislike of paying taxes to garner support when in reality it has nothing to do with the average person’s tax form. Nobody likes to pay taxes but as the saying goes, “Don’t want to pay taxes, hate government, move to Samolia”. I prefer to live where I am thank you.

    I couldn’t agree more. TWO FEET TALL? incredible! The answer to the gambit posed by the opening joke hadn’t occurred to me either….it was an aha moment and a LOL (which, in itself, is a tip o’the hat to your recent blog on acronyms).

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