Wednesday, March 29, 2023
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Hate doing your taxes? Blame Congress, not the IRS

If you are dreading doing your taxes this season, don't blame the Internal Revenue Service for making it so hard.

After all, it's the nation's elected officials who have passed all those tax laws over the years—for better or for worse.

"We have come to use the tax system as if it is a cure for every social and economic problem the country faces," said Michael Graetz, a professor of tax law at Columbia Law School and a proponent of major tax reform.

That's not necessarily what the federal tax system was intended for when it was introduced about 100 years ago.

But over the years, the tax system has evolved into something more akin to an octopus, with tentacles that direct social policy, help to stimulate the economy and try to encourage Americans to make choices like saving for retirement, going to college and owning a home.

"The government is using the tax system—and provisions in the tax system—to encourage particular behavior on the part of the individual," said Roberton Williams, Sol Price Fellow with the Tax Policy Center think tank.

In fact, the tax code has now become so complex that few people can even do their own taxes without help. More than half of Americans use a tax professional, according to the IRS, and many more use tax preparation software.

Meanwhile, almost everyone is fretting that they are somehow paying more than everyone else.

(Read more: 7 triggers for the alternative minimum tax)

"The complexity reduces people's trust in the system," Williams said.

And yet, the tax code keeps getting more complex. One reason: Politics.

Almost no politician wants to say they are raising people's taxes, but most politicians are thrilled to tell voters they are lowering people's tax bills. Experts say that's led to a dizzying array of tax breaks, including multiple, confusing tax incentives for the same thing, like paying for college.

"They overlap and they don't have consistent goals," Graetz said. "Difficult decisions haven't been made."


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