The tangled web he wove

The Daily Mislead notes that President Bush, in his acceptance speech Thursday night, complained of the complexity of the American tax code:

President Bush said a "drag on our economy is the current tax code, which is a complicated mess, filled with special interest loopholes." Bush noted that the American people were saddled with "6 billion hours of paperwork and headache every year," and said that he was the candidate to create "a simpler, fairer" system.

That line jumped out at me when I watched the speech. Here is a man who has spent three years rewriting the tax code in his own image. The "current tax code" is a creature of his own making. It is the Bush tax code. He crafted that "complicated mess." He signed into law many of those "special interest loopholes" -- Hooters & Polluters anyone? George W. Bush is the first president to run for a second term by blaming all his problems on the previous administration.

The DM questions Bush's credentials for creating a "simpler, fairer" system based on his track record on taxes, which is far from simple and anything but fair. They cite IRS statistics on complexity to show that during his three years in office the tax code has gotten considerably more complex:

According to official Internal Revenue Service estimates from 2000 to 2003, "the time required for the set of forms associated with the 1040 has increased by 3 hours and 8 minutes." The average taxpayer spent 1 hour and 29 minutes longer filing his or her taxes in 2003 than in 2000.

I've mentioned before that these IRS figures seem to overstate the difficulty of filing taxes. They suggest, for instance, that the 1040EZ form takes "an average of 3 hours and 43 minutes" to complete.

This is impossible. Really. If it takes you nearly 4 hours to fill out the 1040EZ then you can't also be capable of holding down a job in the first place, so you don't have to worry about it.

But while these IRS figures may be ridiculously inflated, the numbers cited by the DM are still useful in that they compare two sets of IRS statistics against each other.

What that comparison shows is that President Bush's tax shifts in 2001, 2002 and 2003 made the tax code even more complex for those who file the long form.

That, of course, is part of what they were designed to do.

As Stephen Moore, Grover Norquist and the other advocates of Bush's "ownership society" agenda have made clear, its goal is to replace America's progressive income tax with something regressive and "simple" like a flat tax or national sales tax.

These schemes have little to recommend them other than simplicity. They will make the tax code immensely less fair, less proportional, less effective for raising revenue.

So if all you have to argue for your agenda is "simplification," then you also need to make the current system seem very, very complex and to argue that this complexity is a problem that outweighs every other consideration.* It becomes easier to argue this dubious point if you actually increase the complexity in the system. This is also part of the agenda behind Bush's alphabet soup of proposed new tax shelters for the wealthy -- HSAs, PRAs, FTPs, etc.

In the meantime, the "haves and the have-mores" that Bush calls "my base" won't complain about that extra hour and a half their taxes took to file this year. As Bush himself likes to point out, these people have hirelings to file their taxes for them. And since the top 1 percent of taxpayers reaped an average kickback of $78,460 from these tax shifts, they won't mind paying their accountants a tiny bit of OT.

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* It's also possible, because "evidence" of complexity is politically useful for the Bush administration, that the reason the IRS says that filing taxes is so implausibly difficult, and increasingly difficult every year, is that this is what they have been instructed to report. To believe this, however, one would have to take the cynical view that this administration would stoop to politicizing and misrepresenting simple statements of economic data. Hmmm.

Comments

[Amanda]

Maybe they are counting the time spent gathering W-2's and receipts, driving to the H&R Block, waiting in line, and paying the accountant in that figure.

[bad Jim]

The people using the EZ form, perhaps half of tax payers, aren't using H&R Block. Staple the W2, sign it, drop it off in the mailbox.

Thanks, Slacktivist. It's wonderful that someone pointed out the utter inanity of Bush's complaint. As though it wasn't exactly the point that only the rich benefit from the complications of the tax system.

My income comes strictly from stocks and bonds, around a third of which are tax-free. Last year my income was around a hundred grand and my income tax was about four. There are special circumstances, of course, but it does seem that we're already pretty close to the point at which unearned income isn't taxed. I suppose I shouldn't complain, but it does seem rather peculiar.

bad Jim,

Thank you very much for your candor. But damn! You pay an effective 4% federal income tax?

If I recall correctly, last year after I finished filling out my 1040 (long form, taking advantage of middle-class 'loopholes' like home mortgage and tax deduction, child care deduction, etc., and negligible income from investments), TurboTax told me I was paying an effective 15% tax rate.

By the way, with TurboTax, it probably took me 4 hours to do my taxes, (including a schedule C for deductions related to my on-the-side single-proprietor consulting work). Now that I've been using TurboTax for several years, I can't even imagine how long it would take without it, especially with all the additional schedules I file to take advantage of 'loopholes'.

The meme that a "flat tax" will lead to tax simplification is a deceptive canard.

The complexities of the tax code are caused by deductions, exemptions, etc. - all the things that come before you determine your taxable income. Once you've determined your taxable income, the rest takes a few minutes - looking up your tax in the tax table or making a simple calculation.

This process of figuring your tax after determining your taxable income will take about the same amount of time whether the rates are flat or progressive.

[chris_uk]

It's nice see that George Bush is atleast thought of as a competant leader as home.

Obviously he also brings admiration from the people of the world...

For example.. Here are some clips from america's allie Britain, shown at 9pm primetime on BBC 1...

http://www.bbc.co.uk/comedy/deadringers/clips/

About half of the show is centered around taking the pish out of you president.

[Ellie]

chris_uk: "Deadringers" also takes a few jabs at your Prime Minister and many British politicians. Of course, we have shows here in the U.S. that parody our own politicians. (At times, humor is the best way to deal with madness and terror.)

[Stan]

I posted the comment above that starts "bad Jim, Thank you very much for your candor..." I didn't mean to post anonymously. Hopefully my info will be associated with this post.

[Matt McIrvin]

The second post by Nameless describes a longstanding pet peeve of mine. If what you care about is simplicity, what does it matter how many brackets there are? You're just looking up a number in a table! Or, if you're so unlucky as to be too rich to use the table, evaluating a formula that requires a competent sixth-grader's grasp of mathematics. It's all that other stuff that makes the code complicated.

Flat tax advocates often respond by claiming that adopting a flat tax would in turn make it possible to remove loopholes, but this is an absurd fantasy: the code is complicated because it's serving complicated interests, both well-intentioned and not. It isn't as if the loopholes are there just because the brackets make the code too darn progressive, so that removing both would be a wash.

[Sophia8]

As a Brit, what I find puzzling about this whole election campaign is why does Bush want to be President again?
Look at the mess his country is in - the quagmire that is Iraq, the crumbling economy, the looming oil crisis etc. Why would any sane person want to continue to carry the responsibility for all that?
Doesn't Bush want to simply toss the White House keys at Kerry, tell him "It's all yours now, buddy - may you have the joy of it!" and head off to settle down on his Texas spread to ride horses, shoot his guns and quietly drink himself into oblivion?

[Lisa]

Sophia, I too have trouble understanding why anyone, Bush or Kerry, would want the keys to the Oval Office at this point in time. But keep in mind that Bush's agenda is the politics of revenge. This guy has MAJOR father issues. Look at his whole life - it's a copy of Dad. Yale, then the oil business, then owning a baseball team and even printing up baseball cards with his picture on them (Dad was a star athlete at Yale), and prancing around on that flight deck in a pilot's suit (Dad flew planes in WWII).

Who are W.'s advisors? Why, Dad's people - Cheney, Rice, Powell. How many guys do you know who like to hang out with their father's friends?

George Senior lost his bid for re-election in 1992. Junior, who has been competing obsessively with Dad his whole life, is determined to avenge that loss.

[Legomancer]

"George W. Bush is the first president to run for a second term by blaming all his problems on the previous administration."

That's brilliant.

[Edward Liu]

Howdy,

Sophia8 asks: "As a Brit, what I find puzzling about this whole election campaign is why does Bush want to be President again?
Look at the mess his country is in - the quagmire that is Iraq, the crumbling economy, the looming oil crisis etc. Why would any sane person want to continue to carry the responsibility for all that?"

Your question carries its own answer, in that it implicitly assumes GW assumed responsibility for all the problems you name in the first place. Since he never accepted responsibility for any of those problems (and, in many cases, actively denies the problem exists at all in the face of facts), why wouldn't he want to continue as President?

-- Ed