Just a quick note before the actual blog: I’m at AERO in Friedrichshafen right now! I’ll be there until Saturday. Come see me! (Foyer Ost). Yes, I know I’m repeating myself.
On to today’s subject: Have you ever hear of Amilcare Puviani? He was an Italian economist, is regarded as an early representative of the public-choice-theory, and focused on public finances in his work. His most popular work “Teoria della illusione finanziaria” is basically a guide or manual for the state, how to squeeze out as much money out of a population without them noticing or getting aggravated about it. A key item on his list is to make the whole system as convoluted and intransparent as possible, so that nobody knows how much taxes he or she actually pays and so that the whole system becomes an unseizable, intangible, amorphous money sucking blob that is impossible to fight. (That wording is mine, not his, to be fair).
When I look at my tax forms, I have no doubt that this book is recommended reading for every public officer who reaches a certain level in every treasury department around the world.
And when I think about the accumulated time spent on accounting and tax stuff by millions upon millions of people, it makes me weep for the lost time, joy, productivity and potential of mankind. And the next time you tear your hairs out doing your taxes, remember: It’s not *just* the natural evolution of big institutions at play here. It most probably is all done on purpose.
Anyway, since I’m away from my office right now, I can’t reply to comments, but just preemptively: Yes, I like roads and schools, that’s not the point.
Just beat my head against doing my State taxes. Fed is easy with all the places that’ll do them, even the free ones (return already refunded into my account), but because I only lived in a state with an income tax for part of the year, I needed to do them on my own, or pay a ton to do them (no one “free” would touch a part time return), and Michigan’s is ridiculously over complicated.
Now I have to do a return for a State I had taxes pulled by mistake.
Have I mentioned I hate our Payroll people?
in 5 years they have made more mistakes on my payroll than I have suffered in the rest of my 50 years of life.
Your rant makes me wonder something else about tax law. I notice that they have a whole bunch of deductions for all manner of things, some of which seem pretty absurd. Of course some of this is to influence people to do things that are good for the economy, environment, or society, or probably to help rich people get off easier, but maybe they’re playing the same game as some department stores that are always playing coupon games and everything is always on sale. Get people to think about how much they “saved” versus their inflated sticker price by playing the games, rather than how unreasonably expensive the stuff still is. The complex tax laws (and complexities of finance in general) support a massive industry, imagine the outcry there would be if the government decided to simplify it so everyone could easily do their own, would put an entire industry out of business.
Quill: You are underestimating the corruption in the system. Almost every one of those tax deductions is a favor to some particular group or even to a single corporation or billionaire, and each of them was repaid with campaign contributions, insider stock market tips, etc. When they can also get your vote for allowing you to keep part of _your_ money, that’s just lagniappe.
I was at AERO. The weather was absolutely fantastic and I was able to fly in and I met Stef at his table. He signed books for me and my brother. 🙂
Thanks! It was really nice meeting you!
As to taxes, I have heard that Germany has more tax laws than all other countries of the world combined. Not sure that’s actually true, but it really is convoluted.
And the legislators don’t even need to know about any “secret” guide book. It always works like this: “Hey, I have this great idea how to simplify this-and-that tax law.”. Inevitably someone will feel disadvantaged and clamour for an exemption. Then others who are not given such exemption will also cry out. And in the end the new system is even more complicated than the old one, with one “simple” rule, and exceptions, and exceptions to the expections, etc. I’ve never seen it any other way.