Cover Story

Taxing America's patience

April 15: It's a rite of spring Americans have learned to endure. But a growing number are expressing frustration at the increasing complexity and unfairness of the tax code. They're sending that message to Washington, loud and clear. What's less clear is how to replace it. With fellow tax reformers disagreeing over the reforms, business as usual remains safe--for now.

Issue: "Spring Draining," April 12, 1997

from Washington

Michael Dean is used to big numbers. As a Milwaukee-based attorney specializing in business, real estate, and Constitutional law, he routinely advises clients on deals in which millions of dollars are at stake. Yet there's one number that strikes fear in his heart: 1040. Three years ago, Mr. Dean decided he'd rather pay someone else to prepare his annual Form 1040 for the IRS than bother doing it himself. He found himself spending "an inordinate amount of time" to file his taxes each year, until he finally decided that "the regulations have become so arcane that it is more productive to send it to a professional."

But can taxes really be tougher or more arcane than torts? "Yes, by far," he insists. "At least there's a rational basis for torts." Besides, in practicing law he may have to argue before the state supreme court, but that's nothing compared with trying to prove one's innocence to the IRS. "I think the attitude of the IRS is pretty well summed up by a quote attributed to Richelieu that goes something like this: 'Give me 15 words written by the most innocent of men, and I will find something with which to hang him.'"

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It's that combination of hard-to-understand requirements and hard-to-appease government agents that drives so many bright and capable Americans to pay tax preparers hundreds of dollars each year to tell them how many more thousands of dollars they owe to Uncle Sam. And no wonder. When the income tax debuted in 1913, the tax code ran just 11,400 words, simple enough for almost anyone to understand. But at 555 million words, today's tax code has become so complex that taxpayers spend a cumulative 5.4 billion hours a year filling out their Form 1040s so as to keep as much of their hard-earned money as they can without breaking the law.

Last year, David Emmith of Manassas, Va., was one of those frustrated filers--so frustrated, in fact, that he decided to rebel. Surfing the net at tax time, he stumbled across the website for a group called Citizens for an Alternative Tax System, with a national headquarters right in his neighborhood. Today Mr. Emmith is the chapter director for CATS in northern Virginia, just across the Potomac from enemy headquarters in Washington, D.C.

Anyone meeting Mr. Emmith knows at once who the enemy is. His Rush Limbaugh tie, normally a sure eye-catcher, is overshadowed by the large lapel sticker on his left breast. The black letters IRS are surrounded by a red circle and bisected with a heavy red slash. Likewise, the back window of his conversion van has been turned into a rolling billboard plastered with computer-generated signs. One quotes Einstein as saying that the most complicated thing in the world is figuring taxes, while another claims that there are more federal agents investigating tax cheats than there are pursuing terrorists.

Mr. Emmith and his organization have a simple solution for Einstein and others confused by the current income tax system: Do away with it altogether. By implementing a national sales tax, they say, Uncle Sam could collect all the revenues he needs without sending out his IRS heavies to comb through the private papers of citizens, looking for cheaters. And because the 15-17 percent tax would be collected every time the cash register rings, April ulcers and strained marriages would be a thing of the past.

The ordeal of filing taxes has become such a rite of spring over the past 80 years that the thought of doing away with it may seem to border on anarchy. Mr. Emmith wants people to know that lapel stickers and car signs notwithstanding, his members are no anarchists. "This is not a radical outfit that suggests that we not pay taxes to the government," he stresses. "All we are suggesting is that the government have a different manner in collecting its revenues. The amount that we pay, that's a whole separate issue. Our focus is to change the way that the government collects its taxes--make it much fairer and simpler."

The idea of a national sales tax to replace the income tax is respectable enough to have attracted some heavyweight congressional supporters. Rep. Bill Archer (R-Texas), chairman of the tax-writing House Ways and Means Committee, appears on a 30-minute infomercial produced by CATS, lending his support to the proposal. Two less-known representatives, Dan Schaefer (R-Colo.) and Billy Tauzin (R-La.), plan to make the IRS's big day by introducing their national sales tax bill on April 15.

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