Tax Preparation So Simple, a Treasury Secretary Can Figure It Out?

The Internal Revenue Code, Title 26 of the United States Code, is virtually incomprehensible and practically impossible for people to calculate their own taxes without figuring on spending hours trying to do the math and mental gymnastics to properly account for income, deductions, exclusions, and credits. And that's with a fairly straight forward return.

Do we need tax simplification? Absolutely. As seen by the examples of our intellectual betters, Tim Geithner, the current Federal Reserve Governor of New York and nominee to be the next Treasury Secretary under Barack Obama, and Rep. Charles Rangel, who not only has the honor of representing New York, but is the Chairman of the House Ways and Means Committee and responsible for writing tax law.

As readers of this fair blog are aware, Rangel has been unable to figure out his taxes for years, and has routinely underpaid taxes or evaded the payment of taxes (to say nothing of his multiple ethics violations).

Geithner has been tabbed to be the next Treasury Secretary and is largely responsible for the bailout of Citi and working with Hank Paulson and Ben Bernanke to create the TARP fund - the bailout that will saddle taxpayers with trillions of dollars in new debt in coming years.

Did Geithner have an incompetent accountant? Maybe. A Senate Finance Committee statement reports that he prepared his own returns for 2000, 2001, 2002 and 2005.

We're tempted to say America needs a Treasury secretary who is smart enough to figure out his own taxes. But such a cheap shot would be beneath us. Instead, we are going to make a serious point:

America needs a tax code simple enough for the Treasury secretary to figure out.

The reason the Code has become as bloated as it has is because it provides handouts and tax breaks to every conceivable group, allowing corporations and individuals to practice tax avoidance - lowering their tax burdens if they can game their assets in certain fashions. Tax simplification would mean that corporations and individuals could figure out their tax burden quicker and easier, but it would come at the price of losing some of those highly prized tax breaks. That's why there is such resistance to simplifying the tax code.

It's also why it is absolutely needed; corporations and individuals spend countless hours and billions of dollars on tax preparation when that money could go to research, development, and investing in growing businesses. It is a great big sucking sound on the economy, and a simplified tax code is one way in which government can free up money without any additional costs from the Treasury.