Why are taxes so complicated?
It seems like a simple question, but conflicts between the goals of our tax system, including fairness, efficiency, and enforceability reveal a convoluted answer. Most people believe taxes should be fair, conducive to economic prosperity, and enforceable - as well as simple. Congress has used the tax system to influence social policy
as well as to deliver benefits for specific groups and industries. But even the lawmakers who agree on these goals often disagree about the relative importance of each, or how best to achieve an equitable system. As a result, policies usually represent a balance among competing goals, and simplicity often loses out to other priorities.
The IRS tailors has attempted to tailor the tax burdens to the characteristics of individual taxpayers, which leads to fairer, but more complex taxes. Income must be traced from businesses to individuals; Individual characteristics such as marital status and number of dependents must be reported; the composition of expenditures or income must be documented and filed. These myriad objectives are especially relevant in the current tax code, where desires to channel tax cuts to disenfranchised groups have added significant complexity.
Of course, some complexity is necessary to deter tax avoidance. Taxpayers have the right to reduce their taxes (by legal means), but that inevitably leads to a discussion on which activities and costs qualify for tax-reduction. The Treasury Department cultivates rules that are designed to discourage avoidance, which passes the burden of uncomplicating the filing process to the taxpayer. As individuals find new ways to skirt the tax system, the Treasury further increases the complexity of the process, and a cycle forms wherein new and more obfuscated rules are established to counter those tax avoidance schemes.
At the end of the day, this system benefits accountants and lawyers, and those that can afford to hire them. The majority of American citizens, especially those with little funds remaining after basic needs, are qualified for many of these tax reductions, but they lack the expertise to navigate the bureaucratic mumbo-jumbo.
That’s where the United Way steps in.
We are bridging the gap between qualified tax assistance and those in our community that need it the most. Our Volunteer Income Tax Assistance program (V.I.T.A.) offers free tax help to people who make $68,000 or less a year, persons with disabilities, and limited English-speaking taxpayers who need assistance in preparing their own tax returns. IRS-certified volunteers are staffing the VITA offices through Collier County, where they provide FREE basic income tax return preparation with electronic filing to qualified individuals. Our VITA volunteers are provided free educational services to keep them up-to-date with the latest tax incentives and breaks available to each taxpayer.
If you are interested in more information on VITA sites in your area, click here.
If you're interested in becoming a VITA volunteer, please visit our VITA volunteer page here.
For more information on VITA, click here to be directed to the IRS main website.