On Monday, April 16, MPA Council screened “An Inconvenient Tax” to celebrate the end of tax season. For those of you who have not seen the video, I highly encourage you watch it. The film did a great job capturing the complexity of the US tax code, and explaining the most popular theories of ways to reform it. I feel this video is important to everyone, not just those interested in accounting and tax, because tax reform is going to be a major point of debate in the upcoming presidential election. Many of these theories of reform come up often in current events, and I now understand them better thanks to the documentary.
After the film was screened, the MPA Program Director Jim Franklin led a discussion amongst the council members present. Jim brought up many questions that sparked a healthy debate, the most memorable one being “What do you think will happen regarding the tax code in the future?”
There were many good and valid answers to this question, and this question continues to make me think. Here is my very personal opinion about the future of the tax code, based on my current knowledge:
I hear many people talking about simplifying the tax code and implementing a flat or fair tax to replace our current complicated system. I completely agree the code needs to be simplified, and here are some facts to back up that opinion:
- The current tax code is four times the length of Shakespeare’s complete volume of works
- Over 16,000 changes have been made to the tax code in the past 20 years
- American taxpayers spend $200 billion and 5.4 billion hours working to comply with federal taxes each year, more than it takes to produce every car, truck, and van in the United States.
- The IRS sends out 8 billion pages of forms and instructions each year. Laid end to end, they would stretch 28 times around the earth. Nearly 300,000 trees are cut down yearly to produce the paper for all the IRS forms and instructions. (there are many more facts not included here that will blow your mind!)
The code in my mind has gotten out of hand. One of the reasons why is because congressmen continually use the tax code to please constituents and donors. They soften the blow of their poor performance by creating loopholes for their major donors or try to create tax credits and deductions their constituents can use. If we replace our current system with a simpler tax policy, I don’t see why congressmen won’t continue to try to create tax breaks and changing the code until it eventually becomes as complicated as it is today.
I am starting to see that our complicated tax code is a symptom of the organizational behavior problems in our Congress. The political nature of congress is one of the major reasons our tax system has gotten so complicated, and is also a reason why it is so difficult to simplify the system. This has me thinking that until the organizational behavior of the US congress can be addressed, it will be exceptionally difficult to simplify our tax laws. Again, that is only my personal opinion. I would love to hear other opinions, so please comment below.
This discussion among MPA Council members was one of the most intellectually stimulating discussions I have been part of while I’ve been in the program. What made this discussion so exciting was the variety of educational backgrounds and ways of thinking among council members. The group was split up in between traditional and integrated MPAs, and was also pretty evenly split across tax and audit track students. Each student had a distinct and unique viewpoint to bring to the table, and each had a different perspective on what will happen regarding the tax code in the future. The diversity of students in the MPA program is one of its biggest assets in my opinion. Fellow students are constantly bringing ideas to the table that I would have never thought of, and it helps me see things from different perspectives.
For those of you interested in “An Inconvenient Tax”, I have included the trailer for the documentary below. Again, feel free to voice your opinion on the future of the US tax code and how it will affect the upcoming presidential election!
Inconvenient Tax Trailer: