This time of the year can be frustrating. Documents are gathered. Receipts are gathered and reviewed. It is tax season.
It is a complicated system. The government favors or incentivizes certain behavior and business. Can’t we just go to a flat tax or a consumption tax system?
Donald Rumsfeld (twice former Secretary of Defense, he held high government offices from 1963 till 2006) sends a version of the following letter to the IRS each year: “I have sent in our federal tax and our gift tax returns for 2013. As in prior years, it is important for you to know that I have absolutely no idea whether our tax returns and tax payments are accurate. I say this despite the fact that I am a college graduate and I try hard to make sure our tax returns are accurate. The tax code is so complex and the forms are so complicated, that I know that I cannot have any confidence that I know what is being requested, and therefore I cannot and do not know, and I suspect a great many Americans cannot know, whether or not their tax returns are accurate. As in past years, I have spent more money than I wanted to spend to hire an accounting firm to prepare our tax returns and I believe that they are well qualified. If you have questions, let me know and I will ask our accountants to be in touch with you and try to provide any additional information you may think you need. I do hope that at some point in my lifetime, and I am now in my 80’s, so there are not many years left, the U.S. government will simplify the U.S. tax code so that those citizens who sincerely want to pay what they should, are able to do it right, and they know that they have done it right. I should add that my wife of 59 years, also a college graduate, has signed our joint return, but she also knows that she does not have any idea whether or not our tax payments are accurate” (economist.com/blogs/democracyinamerica/2014/04/donald-rumsfeld-s-taxes). I include this mainly for humor.
We should honestly do our duty. (1) We are not to be dishonest (Ephesians 4:25; Colossians 3:9-10; Revelation 21:8). (2) We are to be subject to governing authorities (Romans 13:1-2; Titus 3:1-2; 1 Peter 2:13-17). (3) We are to render “taxes to whom taxes are due, customs to whom customs” (Romans 13:7).
Not everyone is honest. There were 7 million fewer dependents for the tax year 1986 than for 1985. What happened? It was for the year 1986 that a social security number was first required to claim a child as a dependent. No longer could two or more taxpayers claim the same dependent for the year. No longer could one fraudulently claim a pet as a dependent (story told in Steven Levitt and Stephen Dubner’s Freakonomics, pp. 22, 254-255).
If you do not like the tax code, do not blame the IRS. Steven Levitt and Stephen Dubner writes, “The first thing to remember is that the IRS doesn’t write the tax code. The agency is quick to point its finder at the true villain: ‘In the United States, the Congress passes tax laws, and requires taxpayers to comply,’ its mission statement says” (Freakonomics, p. 251).