Excluding proper names, hyphenated words and muti-word terms, Webster's New World College Dictionary lists over 2,500 words that begin with the letter "F". That's a lot of words. However, most people almost always assume that one specific word out of all of these possibilities is meant when someone uses the reference: the "F" word. But that assumption is not always correct. As an example, in the United States, we much prefer the "F" word to the "C" word when referring to the temperature.
Nonetheless, I freely admit that, like many Americans, I have used the generally assumed “F” word, perhaps more frequently than I should, when talking about our tax code. But suppose I told you that there is one word beginning with the letter “F” that, when associated with our tax code, is definitely obscene. Just because I said obscene, don’t round up the usual suspects. I meant frivolous!
That last paragraph is clearly explained in my recently published book titled The F-Word. How Our Tax Code Is Failing American Taxpayers—and Why!
Although the title is a not-so-subtle hint at what many feel the Internal Revenue system is doing to American taxpayers, I chose it for another reason. Yes, I wanted to grab your attention, but more importantly, I titled my book The F-Word because there are many adjectives that begin with the letter "F" that can be appropriately used to describe our Failed tax system—Frustratingly Faulty and Fatally Flawed. In a word—our tax code is fubar. (Author’s note: For those with limited exposure to the military, fubar is a military acronym that dates from World War II. It stands for #%#*@ (read F word) up beyond all recognition/repair/reason.)
The Future of the American economy, weighed down by a Finicky, Fluctuating tax code, is Frightening. Problems will continue to Fester under a Flaky, Feckless, and Fluky tax system. Maintaining the status quo is Foolish, but trying to Fix this snafu is Futile. The Internal Revenue Code is a Farce and we have to start over—we have to do better.
In 1913, the 16th Amendment to the Constitution was ratified by a sufficient number of states making income tax a permanent fixture in the United States.
The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration.
The 100 year anniversary of that event coupled with 25 years of frustration helping individual taxpayers and small businesses make sense of their tax nonsense led me to write The F-Word and to start my taxsnafu blog. These efforts are a wake up call, my plea to all Americans to take affirmative action to finally and firmly demand meaningful and lasting tax reform.
The F-Word was written to educate an audience of middle-class Americans about our dysfunctional tax system and clearly outlines the following:
- Everyone—politician, economist, citizen and pundit—is critical of our tax code.
- With every tax reform bill enacted, our code has invariably gotten worse.
- The code is unfair—arbitrarily so—to Americans of every socio-economic group.
- Payroll taxes—which are really income taxes—must be included in any tax reform.
- Businesses do not pay taxes. They collect them. They should be eliminated.
The F-Word encourages Americans to demand a tax “do-over.” As defined in the Macmillan English Dictionary, a do-over means: “to do something again from the beginning, especially because you did it badly the first time.” Okay, we did it badly the first time. Let’s start over, but let’s just do it better this time.
Reflect for a moment on our existing methodology. The Internal Revenue Code establishes a number of progressive tax rates, but excludes some income from any taxation. Then the code assigns different rates for other types of income. Worried whether this approach results in an unfair distribution of the tax burden, the IRC directs that income tax be calculated first one way, then another. And if this has not yet driven us to drink, the code levies a separate tax on the net income derived from certain activities previously excluded. Finally, out of apprehension that the resulting tax is too burdensome, the IRC includes a series of overlapping credits to reduce taxes paid by some taxpayers. Some of these credits actually result in money paid to, rather than paid by, certain taxpayers.
We scorn the Internal Revenue Service. We bemoan our tax structure. We ridicule poorly disguised political agendas wrapped in the cloak of tax reform. Despite these reactions we stand by idly. As free citizens we have to take a different direction.
I understand the entrenched barrier to real tax reform. Although almost everyone voices support for tax reform in principle, that support disappears in the face of reality. Remember Senator Long’s description of reform: “A tax loophole is something that benefits the other guy. If it benefits you, it is tax reform.”
Said differently, “we have met the enemy and he is us.”
Justice Brandeis is credited with having said, “If we desire respect for the law, we must first make the law respectable.” Given the consensus of our criticism, we should act on his warning.
Short of armed aggression against our country, I believe this matter to be so grave that it should take priority over all other political considerations. In this respect, I echo the sentiment expressed by the National Taxpayer Advocate in her 2001 report to Congress:
“I realize that many…believe that there is no…political reward for achieving tax simplification, or, more importantly, tax rationalization. I maintain that this nation can ill afford to ignore the increasing burden…and irrationality of our tax system.”
Conventional wisdom discourages using the phrase, “things can’t get any worse.” At the risk of talking about a no-hitter in the dugout, The F-Word suggests things cannot possibly be any worse than the Internal Revenue Code, especially as enforced by the IRS. Pencils and erasers are no longer sufficient. It’s time to buy an industrial-grade paper shredder.
We need to get out the paint cans, the makeup, and the exercise machines. We need to consider liposuction and Botox treatments. What America needs is an extreme tax do-over.
What I need is a drink.