Tax Day in America. Last minute e-filing. Last minute runs to the post office to send in extensions for those who just can’t file by today. Grumbles heard from here to Washington and back. A letter to the IRS from Donald Rumsfeld is making the rounds on various social media sites. His letter, an annual tradition it seems, tells the IRS that he doesn’t know if his taxes are correct, even though he had accountants preparing them.
Well, I can say that his taxes are probably optimized so that he pays the least amount possible I spent 9 years working for a small boutique accounting firm in NYC that catered to ‘high wealth’ private clients, and I saw lots of tax returns going out that had 6-7 and even 8 figure bottom lines, and taxes paid that were in the 5 and 6 figure range. I never questioned how these calculations had been arrived at – what, me, a lowly admin assistant? Question the work of trained and certified accountants? Nope. Never. I just thumbed through paperwork, stapled and clipped and put little ‘sign here’ flags on multiple pages, and made sure that the client got a package that was pretty self-explanatory. Sign where shown. Mail each return in the provided envelope (with postage if necessary for the client’s happiness). The accountant who worked on those tax returns did whatever necessary to optimize the most minimal payment possible. Sometimes that meant the client needed to pay something. Most times it meant that the client had refunds which were carried forward into the next year to offset any possible payments for next year’s taxes.
There is a saying as old as civilization – that the only two certainties in life – death – and taxes. And in today’s America the federal and state tax codes have become complex enough that many people need to hire someone else to make sense of it all. Another profession that makes its money off of the misery of others. I quit working for accountants when I realized my life was taking me in new directions. But I never forgot what I learned working there. Having money means you work like mad to NOT pay everything the government asks for.
If people and companies paid what they really owed – no questions, no hemming and hawing, just hand it all over – you might see surpluses which could be applied to social programs and the payment of international debts. Or you might see prices for everyday things rise to the point where economic collapse could happen again. Or you might see something in between those two extremes. But don’t worry, neither scenario can happen. Not while humanity clings to the notion that money is the one thing no one is willing to part with willingly, at least where paying taxes is involved.