Surely you have heard of this acronym, which stands for â€œkeep it simple, stupid.â€ 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 â€œDangâ€”how am I to get home?â€ Then he hears a voice coming from a window high up on the building behind him. â€œHey, you down thereâ€”just take one lug nut off of each of the other three wheels and use them on your spare.â€
The driver is elated, â€œWow, thanks, man. What is a person as smart as you doing in the crazy house?â€
The voice responded, â€œI may be crazy, but Iâ€™m not stupid.â€
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 1040â€”this includes the â€œburden,â€ 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, letâ€™s keep it simple, then, and use the 1040EZ (as in â€œeasy.â€) But wait, that still takes around seven hours. And thatâ€™s the one that basically says, â€œJust send us all your money and you wonâ€™t have to fill out that longer formâ€ (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 (thatâ€™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 â€œAppleâ€™s tax return is two feet high. Itâ€™s crazyâ€¦itâ€™s time to trash [the code] and go back to something simple.â€ 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 donâ€™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 â€œAir Force One gets the bird.â€]
Image courtesy of Arvind Balaraman.