The other day, I sat at the kitchen table in front of a mountain of paperwork wanting to organize all my receipts, 1099 forms, W-2’s, etc., so that my accountant can prepare my tax returns. Well, this year, unlike years in the past, it was a bit more complicated, so I felt extremely stressed out. As I shuffled through form after form, statement after statement, receipt after receipt, I clearly understood how utterly ridiculous our tax system is.
I checked several sources and found that if the entire tax code were printed on 8 1/2 x 11 paper, it would be 44,000 pages long. Can anyone explain to me why regulations and guidelines need to be so complicated? In reviewing issues pertaining to my particular situation, I discovered some things that punctuate the absurdity of our entire tax system.
One issue that really pissed me off is how the IRS handles capital gains and losses on the sale of securities. Did you know that if you lost $15,000 on the sale of stocks or mutual funds, you can only deduct $3,000 per year for as many years as it takes to deduct the entire $15,000? But guess what happens if you sell some securities and make $15,000. Yep. You have to pay capital gains on the entire amount—all in the year in which you earned it!
Here’s another tax regulation that screws anyone self-employed. As an author who earns his income in the form of royalties, I am treated just like a small business. Even though I’m a one-man-show with no employees, when I calculate my estimated quarterly taxes, the IRS requires that I pay both employee and employer contributions for Social Security and Medicare. So, essentially, I pay double what the typical employee pays.
There are so many unfair and absurd regulations in our tax code that I could go on forever citing examples. But the last time I checked my blood pressure it was a little high, so I best not tempt fate.
Why can’t our lawmakers simplify our tax code? By removing the loopholes from which only the super-rich benefit, wouldn’t some form of a flat tax yield more revenue? Of course it would. But never lose sight of the fact that wealthy men wrote the tax code to favor wealthy men. Politicians don’t care about you and me. Until we get rid of the career politicians who keep a stronghold on our pocketbooks, we’re screwed. The rich get richer; the poor get poorer, and the middle class, who currently picks up the tab for the entire country, will soon be extinct. We don’t need tax cuts like the Republicans continue to push for. We need tax reform that eases the burden on low income and middle income families, and requires that the wealthy pay their fair share.