I recently read a funny joke analogous to the subject of this blog.
During a trip to Hawaii, a man found an old oil lamp on the beach. When he rubbed it, a Genie appeared and granted him one wish.
The man replied, “I love Hawaii but I don’t like to fly and I hate boats. Could you build a highway from California to Hawaii?”
The Genie declared, “Are you nuts?! Do you have any idea how impossible it would be to sink pilings in the Pacific Ocean? Do you know how much concrete you’d need for a 2,000 mile highway? Have you considered how much trouble it would be to even get an environmental impact release? Ask for something else.”
The man countered, “OK, then explain to me why our income tax system is so screwed up.”
The Genie contemplated the request, shrugged his shoulders and asked, “Were you thinking of a one lane highway or two?”
I first read this humorous anecdote in an online document written by Ross Shafer. The moral of the story brings us to the subject of this blog, income taxes, under U.S. Code: Title 26 – Internal Revenue Code, particularly Subtitle A, Chapters 1, 2 and 2A. Throughout my posts, I will use the acronym IRC as a general reference to this statute.
Already this blog, just like our tax code, has become tedious. Let me simplify my purpose. I intend to bash individual income taxes as they are mandated under current law. But don’t be shocked. I am not the only one so disposed. Congress does it. Presidents have done it. Those running for office and those elected to office do it.
Most telling, however, is that The National Taxpayer Advocate, an independent office of the Internal Revenue Service also does it. I suspect my readers do it. In the movie History of the World: Part I, while soliciting sexual favors from a distressed Mademoiselle Rimbaud, King Louis XVI asserts, “What do you mean you don't do it? Of course you do it. We all do it. We love to do it.”
By the way, while denigrating personal income taxes, it is likely that Social Security taxes and corporate income taxes will not go unscathed.
I expect some readers will like and agree with things I write. On the other hand, I anticipate many others will not. More interestingly, it is almost certain some readers will find themselves first in one, then the other group. Frankly, if that last assertion holds true, I find that a good thing.
I finally decided to start this blog after encouragement from many of my family and friends and most of my clients. Allow me to introduce myself. My name is Doug Spiker, EA. I live in Rochester NY with my wife Lauren. I have been employed for fifteen years as a sometime controller for a small computer reseller. Designated as an Enrolled Agent by the IRS, I am also self-employed as a tax professional. I will write more on the tax preparer profession in later blogs.
During my service in the U.S. Army, I sometimes used, and frequently heard the acronyms SNAFU and FUBAR. The name of this blog originates from the meaning of one of those expressions. FUBAR’ed is an abrupt way to relate just how bad things are (ex. they are Fouled Up Beyond All Recognition.) OK, maybe not “fouled” up. I understood when a soldier used FUBAR, he typically believed the letter “F” stood for a word other than “fouled.”
Regardless, SNAFU also provided soldiers a short, pithy way to refer to everyday situations. When used, it acknowledges that everything is normal. It describes circumstances as being ordinary, mostly and usually all screwed (also obviously not the exact word) up. It is a really clever turn of phrase given that it implies that things are actually not good, and the situation should not be normal but somehow it is. Do I sense sarcasm?
I think SNAFU clearly and succinctly describes the tax situation in the United States and I have chosen that term as the name for this blog site.
Situation Normal, All F^>!#< Up. What is it that is normal with respect to our tax code? Is it the inaction or the inept action of Congress? Remember the witticism often attributed to Mark Twain. “Suppose you were an idiot, and suppose you were a member of Congress; but I repeat myself.” However, I do not believe this to be the universal constant even with a Congress that repeatedly bungles tax reform efforts.
For me, the prevailing normalcy regarding our tax code is American complacency. Few Americans consciously worry about our taxes. Instead, they are focused on other, more important matters, not the least of which is keeping their jobs and raising their families. But many analysts, politicians, economists and others believe our tax code is hurting efforts to successfully do those very things. Some, including me, believe that our tax code is insidiously eroding the principles on which this country was founded.
I recognize that many readers will take exception with that assertion. That’s OK too because freedom to disagree is also one of the key principles on which this country was founded.
But I think nearly all Americans concur with the notion that things are very normal, and by that I mean very abnormal, with our tax structure. Pick a blog site. Follow Twitter. Read a commission report. Tune in to Fox News or MSNBC. And, if you can endure the boring, inane rhetoric and the repetitive platitudes, listen to those seeking political office or to those already elected, whether to Congress or to higher office. Somewhere in all of that discourse you will discover each of these, in one way or another, is critical of our tax structure, perhaps even condemning it. Sometimes a little. Often a lot. But nearly always derogatory to some degree.
If this assertion is true, and I believe it is, it begs the question “Why doesn't someone do something?” A better question is “Why don’t WE do something?” But more on that in a later blog.
Before proceeding, I need to lay some groundwork for this blog.
First, I want to be absolutely clear on one point. I will not advocate for getting rid of taxes, even income taxes. If we are to live in an ordered society, we must of necessity have a government and that government needs revenue to perform its functions. Leaving aside the fact that the government controls the currency printing press, taxes are a necessity. Many Americans don’t like to pay them but very few realistically argue that we should not have any.
Second, this blog will not be used to shoot the messenger. I do not begrudge any taxpayer, rich or poor, corporate or individual, the right to minimize tax liability under our tax code. In Gregory v. Helvering, Judge Learned Hand opined,
“Anyone may arrange his affairs so that his taxes shall be as low as possible; he is not bound to choose that pattern which best pays the treasury. There is not even a patriotic duty to increase one's taxes.”
Third, this blog will be focused on taxes, not federal spending. But I get it. Those two concepts are inextricably linked. Nonetheless, I will concentrate on our tax code and the necessity to reform that code. In that respect, be forewarned. I will argue that we must get spending (i.e. tax expenditures) out of the tax code. I will address that subject in greater detail in future posts.
Fourth, to the extent that any individual post is focused on a specific aspect of the IRC, it will in almost every instance be critical, harshly so, of the provision under review. But I will make a concerted effort to avoid criticism of any individual whether liberal or conservative, libertarian or socialist. I don’t care if a billionaire thinks he should get a pass on taxes or a homeless single parent believes he or she is entitled to full and complete societal support or anything in-between. Make the case. I will try not to be judgmental of any individual even if I bitterly disagree with the idea offered by that individual.
In my view, it is the intensely personal attacks that often arise that sidetrack meaningful debate. I will not employ argumentum ad hominem tactics. Ideas may be good or bad. The person presenting a particular idea may also be good or bad. But the mere fact of presentment of an idea does not make the presenter a vile person, even if the idea is deemed to be exceptionally ruinous.
I will respect those who disagree, whether with my views or other comments posted on this blog. We could all benefit from Thomas Paine’s view on this issue as expressed in the pamphlet Common Sense.
“... the author hath studiously avoided every thing which is personal among ourselves. Compliments as well as censure to individuals make no part thereof.”
Lastly, I do not shrink from passionate debate, as long as individual arguments are focused on ideas. In truth, I applaud it. I am passionate about my beliefs. I wholeheartedly subscribe to the following saying even if I cannot claim it as my idea or my original expression.
“If you don’t stand for something, you’ll be sure to fall for anything”
I don’t maintain that the above quote is the only version, or even the original edition of this sentiment. Many different sources attribute this proverb to a number of historical figures. Whoever first said it, it is a wise adage. I wish I had thought of it.
I will close this first post with an excerpt from the National Taxpayer Advocate, 2001 Report to Congress:
“I realize that many today in the United States believe that there is no constituency or political reward for achieving tax simplification, or, more importantly, tax rationalization. I maintain that this nation can ill afford to ignore the increasing burden (for taxpayers and tax administrators alike) and irrationality of our tax system.”
Just like a kid getting the worst of a schoolyard scuffle, I think it is time American taxpayers yell uncle. We should give up. But what it is that we should give up is our complacency. Perhaps rather than yelling “uncle” we should say “when.” We should tell Congress that we have had enough.
I will be back in touch in a few days. As we used to say down south, “don’t be a stranger.”