If It Moves, Tax It

One of Ronald Reagan’s favorite quotes had to do with the government’s view of the economy. He said: “Government's view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it.”

You have probably figured out by now that this quotation came to mind because I am gathering data so our accountant can do our 2018 income taxes. It really does hurt my feelings to have to admit that we have someone do our taxes for us. I have done my own taxes since the 1970s, until just a couple of years ago. I did the taxes when they were extremely simple (the early years, form 1040A, standard deduction), and I did the taxes when they were extremely complicated (as when Mesa Corporation converted to a limited partnership, expanding the number of forms in my tax returns considerably). I still do the federal tax return for the parent corporation of Chile Today Hot Tamale. But when Kathy started a couple of businesses in addition to Chile Today Hot Tamale, it all became too much for me. Do I put her businesses on a Schedule C or on a Schedule E? Do I file one form 4562 for her businesses, or do I file two? I don’t need the headache.

The aggravating thing is that, even though someone else does the taxes, I still have to collect the data that goes into the return. This means going through my tax filing system, which for many years now has been a King Cobra Premium Malt Liquor box (“twelve 32 fluid ounce bottles!”) that sits just to the right of my desk. All year long I toss receipts into the box, and once a year I have to pull them all out, cross reference them with the entries in my checkbook, and toss out the items that are useless for tax purposes.

I was encouraged by the recent tax reform bill, because it promised to increase the standard deduction to the point where many would no longer have to itemize their deductions. Deal me in! The problem is that the one itemized deduction that I have almost never been able to take advantage of may, this year, be significant enough to cause me to itemize. I refer to the deduction for medical and dental expenses.

For most of my working life, medical and dental expenses were deductible only to the extent that they exceeded 7.5% of adjusted gross income. Given that I’ve had pretty decent medical insurance up until this decade, and that I have generally been pretty healthy, I have not been able to claim any medical deduction. That was fine by me. The year before the so-called “Affordable” Care Act was passed, I had a gall bladder removed at an out-of-pocket cost of somewhere between $100 and $150. That seems to me to be a better deal than to pay full fare for the surgery, and deduct the expenses afterwards.

Just last year, eight years after passage of the so-called “Affordable” Care Act, I had a cataract removed, and my out-of-pocket expenses were several thousand dollars. This, mind you, came after the so-called “Affordable” Care Act mandated better insurance coverage than before. I have insurance that supposedly covers more, definitely charges more (about triple the pre-ACA premiums), and actually pays less than before. Given the astronomical deductibles associated with my insurance, I’m not sure that the insurance company paid anything at all.

Because of the cataract surgery for me and an outpatient procedure for Kathy, it is possible that I will need to itemize this year. And if I don’t need to itemize this year? I won’t know until the accountant looks at my itemized deductions. Catch-22.

So here I sit, slowly developing a resentment against a government that puts its citizens through this hassle so that it can spend $139,745 per second ($31, 234 of which will be borrowed).

Some years ago, Mark Levin, who served as chief of staff for Attorney General Ed Meese in the Reagan administration, published a book that outlined a set of constitutional amendments he would like to see added to the Constitution. I believe there were eleven in all. The one I liked most of all was an amendment that moved tax filing day from April 15 to the day before election day in November. I would add one item to that amendment: I would prohibit the withholding of taxes. Let every citizen sit down and figure out his or her taxes, write a check for the full amount, and mail them in just 24 hours before voting on the people who came up with this system.

If we had this amendment to the Constitution, we wouldn’t need term limits for Congress.