"This is a question too difficult for a mathematician. It should be asked of a philosopher."
--Albert Einstein,
on his 1944 income tax form
I did our taxes in record time. The online-based prep software I use--and pay for, so they're not getting a plug here-- says I spent seven hours and 53 minutes working on them, as opposed to 11 hours and 21 minutes last year. In 2016, it took me more than 22 hours. That was the last time I was required to print out our return. It ran to 55 pages. There were years in the '90s when our returns were close to 200 pages long, and I worked for a week or more on them.
I don't know how long our 2023 return might be. It exists as lines of code I suppose I could convert into a PDF if necessary. I don't need to understand it. It is, as Eudora Welty explained to Willie Morris when he told her about fax machines, "the work of fairies."
The credit for my land speed record largely belongs to the the federal Tax Cuts and Jobs Act of 2017, which significantly increased the standard deduction and capped the deduction for state and local taxes, resulting in the percentage of itemizing taxpayers decreasing from 32 percent in 2017 to 10 in 2022. We were in the 32 percent, not the 10 percent.
While I welcome these changes, I understand that they simply made the job of preparing our taxes easier and less stress-inducing. I don't think they saved us any money.
I also worry that the increased standard deduction serves to depress charitable giving by people in my general economic bucket who can afford to give regularly to what they consider good causes but don't expect to get their name on a building.
The Urban-Brookings Tax Policy Center, an allegedly nonpartisan think tank, estimates the Trump-era changes reduced the federal subsidy for charitable giving by about one-third from $63 billion in 2017 to roughly $42 billion in 2018.
But you can't extrapolate that charitable giving declined by that much; the National Philanthropic Trust says charitable giving by individuals decreased by 3.4 percent in 2022, but that came after two record-setting years for charitable giving, driven by the needs of the covid-19 pandemic. While it stands to reason that if you remove an incentive for charitable giving you've going to decrease charitable giving, I've not seen convincing statistics that's the case.
Maybe itemized deductions weren't that important. I know we write the same checks--we might even write a couple more--and still fill up boxes of lightly used clothes and household clutter to take to the appropriate organizations each month. Maybe I'm less careful about them. I (almost) always get a receipt, but don't always bother entering them in the tax prep software, especially after it becomes clear that we're taking the standard deduction.
It's not just the changes in the tax code that have made the task simpler. (Simpler, not simple. It still takes a full working day for me to prepare and file the return; not counting the gathering of documents and off-line research). Our lives have gotten simpler. We have fewer income streams, which means fewer 1099s (mostly with bigger numbers, though I am also grateful for the $22 in royalties for a 27-year-old book and a mysterious $65 from an old employer) and fewer "uncommon" situations.
I want to avoid "uncommon situations" as much as possible, because my tax software superstitiously believes they put me at a higher risk for an audit. For years we lived in the red alert zone, though--now that I can afford to pay for the "audit defense" option the tax software offers me--for the past five or six years we're been in the "very low risk" category.
It has been suggested to me by people who have expertise in these areas that this probably means I am not taking full advantage of the tax depression options open to me. While these people are probably right, it's worth a considerable sum of money not to have to argue with the government over office furniture or whether a vintage Telecaster is a legitimate business expense.
Once or twice the government has sent me a follow-up letter asking me to clarify a line on my return or send another check. I send them another check. Because I do not want to go to prison.
And even though I don't itemize anymore, I still do most of the work of itemizing, just to check if we can't do better than the standard deduction. (Were I more aggressive with deductions--there are expenses I've never claimed that I believe I could--maybe we could get a small check back.) But that would require more work and might result in one of those "uncommon situations" of which I am leery.
I think the key to relaxing about taxes is to set low expectations. We are fortunate in that we always write a check to the government; I haven't received a federal tax refund in more than 30 years. Which means I have not floated my often profligate Uncle Sam a loan. He gets his money on April 15; until then I let it draw interest. I always manage to overestimate the amount on the check we have to write.
I might overpay, but I don't mind. While there are plenty of anecdotal examples of overreach and inefficiency, for the most part the U.S. government--comprised of our friends and neighbors--provides pretty good service.
Some Ayn Rand acolytes' heads are exploding about now. We're supposed to loathe our government, especially its tax collection arm. But while I have a healthy fear of the IRS, the federal government needs money, and we need an agency empowered to collect the taxes owed under law. It's not the IRS that levies these taxes; they just work there.
The reason so many of us believe government is the enemy is because we've been told that, usually by people who have a fiduciary interest in seeing government enfeebled. My biggest complaint is not that federal taxes are illegitimate or excessive, but that the wealthiest rarely pay their fair share.
Like Pierce Butler, South Carolina's delegate to the constitutional convention, I feel taxes are "distinguished marks of sovereignty." I'm not happy to do them, but I'm happy to be done.
--––––v–––––--
Philip Martin is a columnist and critic for the Arkansas Democrat-Gazette. Email him at pmartin@adgnewsroom.com.