The voices of Tax Policy Center's researchers and staff
So far, at least 22 people are running for president. Only three have released detailed tax plans, but nearly all call for more simplicity—perhaps so much that we could file our returns on a postcard.
In 2012, National Taxpayer Advocate Nina Olson called for simplicity, too: “A simpler, more transparent tax code will substantially reduce the estimated 6.1 billion hours and $168 billion that taxpayers spend on return preparation.” That’s a lot of time and money.Are taxpayers clamoring for a simpler, faster, and cheaper filing experience? Well, they are, and they are not.
A 2014 survey by Public Opinion Strategies found broad support for tax simplification, though the poll didn’t exactly say what it meant by simplicity. On the other hand, my informal and completely unscientific survey finds surprisingly little demand for a simpler tax code. And some people I talked to like the code the way it is.
For me, filing is easy. I collect receipts, organize some paperwork, and make sure my spouse (a finance guy) knows where to find the documents. Then he spends a few days with TurboTax. For $140 in software and one lost weekend, we file both federal and state returns. This year was a little more time consuming, since we moved in 2014, but overall the process was pretty uneventful.
The same goes for a surprisingly large number of my friends. I asked 14 of them how they felt about tax filing. Three hated it. Two had bad related experiences. Four said they don’t enjoy paying, but are resigned to it. And five said they kind of like it.
One said, “It’s like buying a new appliance: You know you have to, you know it will cost you, but you know it must be done.” (We actually had to replace our refrigerator last year. It was arguably more annoying than filing taxes since we couldn’t do it all online. There was a lot of measuring. And we needed to fix a water pipe. But I digress.)
Three shared the Taxpayer Advocate’s concern. Said a high school teacher: “It just frustrates me how complicated and obfuscated the whole process is. It’s not the amount of taxes I pay so much as the sweat and tears I have to put into actually paying them.” Another friend said, “My pain is what I have to pay my accountant.” And another: “I dread the surprises.”
Two others have had horrible experiences filing, though not directly because of complexity. One friend had to fire her first accountant: That delayed filing, which in turn delayed her son’s financial aid application for college. Another experienced similar difficulties, which snowballed into delays for financial aid and medical assistance.
And for some, it isn’t the filing at all. It’s writing the check. Said one friend, “I wait until April 15 at 11:59 pm to eFile. The process is just painful because of paying.”
Another friend was rather philosophical about it. Her accountant “pointed out that if I was paying taxes it was because I had made money. I never mind paying to support my country… although I do my best to keep the amount as low as legally allowed!”
Instinctively, she may be on to something. Much of the complexity in the tax code is there to reduce people’s taxes. A lot of the paperwork we do tracks deductible expenses such as charitable gifts—which lower our taxes.
Meanwhile, five of my respondents said they enjoy filing: They get refunds, or they use the 1040-EZ. One even said, “I love doing my taxes. It’s one of my favorite things, not because I get a refund… I just love closing the book on a year.”
She even finds the sport in filing: “My goal every year is to come out exactly even. One year I got it to $20 between ‘owe’ and ‘refund.’” She’s happy to owe, too: “Why lend the government money, interest free?”
Another friend doesn’t mind making that loan at all. She has extra income tax withheld during the year just so she can get a predictable refund each spring. The cash covers her long-term care insurance, which is due around Tax Day.
Yet, she’s a big fan of simplicity. “Simpler is better. Always.” She’s fine with a flat tax—the epitome of simplicity, if not progressivity. She has a caveat, though.
“Just raise the minimum wage. Educate people so that they can earn more money and afford to pay taxes. And of course, spend the tax dollars wisely.” (Political-platform-wise, would that be a cross between Rand Paul and Bernie Sanders?)
There are 432 days until the 2016 Presidential election. Between now and then we’re sure to hear more urgent calls for simplifying the Code. But given my little survey, I’m not sure that taxpayers really care.
The Tax Hound, publishing the first Wednesday of every month, helps make sense of tax policy for those outside the tax world and connects tax issues to everyday concerns. Need help or have an idea? Post a comment.
Posts and comments are solely the opinion of the author and not that of the Tax Policy Center, Urban Institute, or Brookings Institution.
Photo by: Tony Dejak/AP