More Americans Choose Tax Fairness Over the Economy
Discussions regarding the tax code come up all of the time, particularly during elections when tax season approaches, or when new legislation is enacted. Taxpayers, in general, sometimes have a fickle view of the American tax system. When it works in their favor, it is acceptable, but when it is decreasing the amount of money in their pocket, it is something they are against. Wallet Hub recently published its 2014 Tax Fairness Survey. The survey asked a random online sampling of taxpayers about their views regarding certain aspects of the U.S. tax code.
The survey focused on several areas, including complexity, income, consumers versus corporations, the most and least fair types of taxes, and the economy. Overall, the results indicated Americans find a few aspects of the tax code fair and many others completely unfair. For those which we find unfair, are any alternatives available? Have we already found the lesser of all evils in our current tax system?
Most people see the U.S. tax code as an enigma. Each year during tax season, millions of Americans rush to their accountant, H&R Block, Jackson Hewitt, or Liberty Tax Service to have someone complete taxes on their behalf. This is easier for most, and many people would rather just avoid the headache. Why are taxpayers willing to pay someone hundreds, even thousands of dollars for something they could theoretically do themselves?
Survey results indicate 80 percent of participants describe the tax code as either “complex” or “extremely complex.” Less than 1 percent of respondents find the tax code “very simple” and only 1.2 percent find it “simple.” These respondents who find the tax code easy to understand are probably accountants, financial professionals, or those who work with the tax code as a profession. The last category of respondents, those who find the tax code “ok,” account for only around 16 percent of participants.
With the majority of Americans finding the tax code complex, the way to solve this would be to simplify specific rules, deductions, credits, and income requirements, but our tax code will never be completely simplified. Even with the current tax code — all of the rules and requirements listed for every single tax credit or benefit — people still find loopholes. For every tax benefit, we will always need a laundry list of stipulations a taxpayer must meet to be rendered eligible.
On the other hand, it may not be a bad idea for someone to go through the tax code with a fine-toothed comb and remove or update any code that is redundant, that has multiple versions of the same information (like the first-time homebuyer’s credit), or is only applicable to a relative few. A similar sentiment is reflected in the survey, with nearly half of respondents stating a fairer tax code would have less deductions than the current tax code.