Just how much complexity can we tolerate? The question might serve as a general comment on contemporary life but, in this case, it is specifically targeted at the tax code. We are rapidly moving from an absurd level of complication to something more troubling – complexity that is simply out of control.
These problems are not new. Neither are insightful observations about them. Commentators are aware of the tremendous cost burden and effect on compliance. I have even proposed a challenge, wildly unlikely to succeed, that there must be constitutional limits to the levels of complication and difficulty.
As you might guess, my ire is up as a consequence of having just completed last year’s tax return. (The standard extension gives the filer until October 15th.) It required many hours of toil and the final documents (federal and state) totaled in excess of 80 pages. My biggest concern, though, is with understandability.
There is a large and growing gap between reporting (completing the return) and fully grasping the tax consequences. I simply could not comprehend the connection between the data I was inputting and the tax law to be applied to it. To put it simply, I found it too complicated to understand. The extraordinary level of training that I have in the field, including an LLM in Taxation, suggests that if anyone could follow along, it should be me. Setting aside the possibility that I am simply not too bright, we might infer that something is deeply wrong.
As is so often the case, society’s answer is to turn the matter over to machines. A system that cannot be understood by humans but can be handled by software is considered quite acceptable. As I see it, there are several problems with a “computer only” system. The first, of course, is that their infallibility is clearly myth – we all know from experience that computer-based systems make many mistakes. And, of course, they lack the human ability to prioritize between a dollar error and one a billion times bigger. Beyond that, though, it is very troubling that this basic contribution and shared act of citizenship and patriotic participation is beyond human calculation. What is my fair share? Nobody but the black box seems to know. I fear we are moving rapidly in the wrong direction.
There is always the option to complete one’s tax return by the absolutely simplest method possible, forgoing many deductions, credits and other advantages. In that way you can choose to dodge the complexity by paying a higher tax. And, of course, those wealthy enough can always hire expensive experts to navigate the complex currents. Neither answer, it seems to me, is acceptable if we are to call our tax system even remotely “fair.”
My generation was required by our best high school teachers and college professors to read from the dystopia literature. Novels by Orwell, Huxley, and Kafka were to be taken as a caution and a call to arms. Surely they were not to be read as descriptions of an inevitable march toward a futuristic hell. A world that compels compliance with systems whose ever increasing complexity outstrips people’s ability to keep up is simply a nightmare. Or, perhaps, rather than a nocturnal dream it is a waking enslavement.
Maybe it is hard to get too riled up about an unwieldy and incomprehensible tax system. Most people resent the forced contribution far more than the difficulty in calculating it. The increase in complexity is never sudden; it just gets a little bit worse each year. The slow movement from understandable to unfathomable mirrors the deliberate march from patriotic duty to coerced payment. Like the frog in a warming pot, it is easy not to notice the gradual change that is steadily transforming our state of affairs. The inevitable outcome, though, is that it boils over.
While not the most dreadful thing in world, our tax system is bad and getting worse. Perhaps it wouldn’t be a terrible choice for us to make a stand and, together as a society of people united by common purpose, resolve to better it.