The great tax scam


I just returned from the post office after mailing my tax returns. Yes, I am an old fashioned guy who still does our own taxes and mails in paper returns, much to the delight of the post office that gets money from my doing so and to the chagrin of the tax preparation companies that would like me to pay for their services, and the Internal Revenue Service for whom it would be much easier to process electronic returns than paper ones.

I am not a total Luddite. I have developed my own spreadsheet over the years in which I input the data and it computes the values that should go in the boxes in the various forms. I then download the fillable tax forms from the government tax sites and transfer the numbers from the boxes in my spreadsheet to the boxes in the forms.

Why go to even this level of trouble? Partly it is a form of protest because Congress has colluded with the tax preparation companies to prevent the IRS from being able to offer electronic filing directly without going through a private intermediary. I do not see why I should hand over my personal information to a private company in a transaction that should involve just me and the government. Not only that, why should I reward a private company for their success in lobbying the government to deny a service to taxpayers?

I now have another reason and that is that electronic filing services have been hacked. Two people I know personally had their accounts hacked so that when they went to file their returns, they found that someone else had already fraudulently filed a return under their names and collected refunds. Correcting that took a hell of a long time and was a major pain.

John Oliver explains that the recent tax ‘reform’ like most tax reforms in the last few decades have been thinly disguised giveaways to wealthy people and corporations while pretending to benefit ordinary people. He explains some of the biggest items.

If the embedded clip above has a lot of ads, go this this site and look at it there because that seems to be ad-free or watch this embedded video provided by reader Owlmirror.

Whenever I do my taxes, I am reminded of the argument some white people use against affirmative action in higher education, that it is unfair for underserved minorities to be given extra consideration during the college admissions process since some members of the underserved communities might well be in higher socioeconomic categories than some members of the white community. Why shouldn’t everyone be considered equally based solely on their academic performance and test scores?

One major flaw in the argument is that these people focus exclusively on a single point in time, when admissions are being decided, and ignore everything else. I always ask them if they would be willing to trade a lifetime of being white (with all the implicit and explicit privileges that comes with it) with a lifetime of being black (with all the implicit and explicit discriminations involved) just so that they can get this supposed benefit at the time of admission. Of course, they would not because the lifetime of losses would far outweigh any minor gains at the time of admission.

Why am I reminded of this when I do my taxes? In the form, there is a box that you can check off if you are blind and this enables you to get a slightly higher deduction and thus pay lower tax, though the amount involved is very small. I am not sure when this small benefit for blindness was included in the tax code but suspect that it was done at some time in the past when changes in the tax code were not seen purely as opportunities to benefit the wealthy.

But some sighted people could argue that it is unfair that they do not get this benefit since some blind people may be quite wealthy, indeed wealthier than them. To them I would argue the same way as I do when it comes to affirmative action, that they are wrong to look at this just at the time of doing taxes. The real question is whether they would be willing to trade a lifetime of seeing to being blind just so that they could get this added deduction at tax time.

Comments

  1. kestrel says

    I saw your title (The Great Tax Scam) and (quite cynically) thought, “Which one?”

    I send my tax stuff to an accountant and he files all the forms. Our taxes are complicated because I’m self-employed, and for a while we had to pay taxes in two states. I used to try to stay up on the laws and do it myself, but it just became overwhelming. Eventually I started making mistakes because the forms and laws are so confusing. I think this is really wrong – if the laws and forms are so complicated that ordinary people can’t possibly follow them all and file their own taxes, there is something drastically wrong with the laws and the forms, at least in my view.

    Not quite this easy, though: http://www.scienceofgettingrich.net/taxes.html

  2. Storms says

    @kestral #1
    That is one of the major points for making citizens responsible for their own tax filing. If the laws are non-intuitive, complex and filing error prone, then when you fall under the scrutiny of the State, they can usually find something in your taxes to hold you on if not convict you of.

  3. Mano Singham says

    abbeycadabra,

    That is strange. When I first watched it, there were no commercials but now they seem to have been added.

    Try this site and look at it there because that seems to be ad-free.

  4. Mobius says

    Please, Mano, never ever use an embedded video from Dailymotion again. Ads every minute and a half, and it’s the same EFFING ad.

    At least, that was my experience and it was awful.

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