Of Teabags and Taxes

Written by Current Events

a0708954-1a61-4122-ba6d-4299270ba27b1On Tax Day, I went to the Chicago Loop post office – the one with the Calder where Ferris Bueller twists and shouts – to mail in my forms. An accountant does them, but he won’t hook his computer to the Internet because of privacy concerns, so they can’t be filed electronically. I had to fight my way through the Chicago Tea Party, full of people who would be mortified if they knew what teabagging was.

The postal service receives very little taxpayer money. In fiscal year 2008, it received $102.1 million in taxpayer funds, mostly reimbursement for free mail services provided to blind people, folks in military service, and U.S. voters overseas. It received $74.2 billion from other postal customers. What the postal service does have is a congressional monopoly on mail services. Legally, no one but the postal service can use your mail box. (If you’ve ever done any political canvassing, you were probably warned up and down not to put any leaflets in mailboxes.)

Of course, I was annoyed about this monopoly when I stood in line, because it would have been much easier to use FedEx. I have an account with them – a cinch to set up – and all I’d have to do would be print out the form from my very own computer, then drop it off at any of the fifty million FedEx boxes in the Loop. There seem to be more of them than mail boxes, as many mail boxes were removed because of fears of the Unabomber and terrorism and the like. However, you can’t FedEx tax forms because of the post office’s monopoly on post office boxes.

I’m not entirely sure what the teabaggers were protesting about, but there are a lot of problems with taxes. I’m not opposed to paying taxes, because there are things I want that only the government can provide, like national defense, an interstate highway system, and universal education. But why are tax forms so complicated? I have an MBA from the University of Chicago with concentrations in finance and accounting, but I pay someone else to do my taxes.

If you buy your own health insurance, you don’t get a tax deduction for it, unless you are self-employed, and then you do. If you have medical expenses, you can only deduct them if they exceed 7.5% of your adjusted gross income, unless your employer offers a flexible spending account or you have a medical savings account. You can’t deduct certain types of securities trading losses unless you qualify as a trader for IRS purposes, in which case you can. Does any of this make any sense at all?

However, simplified taxes are a long way off. Tax preparation is a huge industry. target=new>Intuit, the maker of TurboTax, sells about a billion dollars worth of tax software a year. H& R Block generates about $3 billion in revenues from tax services. Throw in all the tax preparation books sold, the independent accountants, the lawyers who represent people in tax court, and the extra postage paid by all of us standing in line at the post office mailing in our tax forms, and you have a hefty business.

Here’s the other problem: no matter how you change the tax system, someone is going to be a loser, and the loser will complain – unless you cut taxes and increase spending, and then everyone is happy until reality sets in. Taxes have to go up; it’s much more responsible to tax and spend than to cut taxes and spend. (No matter what many teabag types fervently believe, there is no GOP money machine turns decreased revenue into increased revenue.)

We have a system that everyone hates, but we have no consensus on how to fix it. Even my accountant complains; he loves the revenue he gets from preparing taxes, but he believes that government wastes every dime it gets. I believe government wastes only half of every dime it gets (more for Cook County, less for Social Security), but I think we’re a long way from any real change other than paying more money. Good think I like my accountant.