David Bouchier: The Enchanted World Of Tax Accountancy
This year we benefit (if that's the right word) from a three-day extension of the tax deadline, apparently to allow people in Washington, D. C. to celebrate Emancipation Day on the 15th, although I am not quite sure how they did this. But now the deadline has arrived, and there is no emancipation for ordinary tax payers. If you are very rich you can ship your fortune offshore, as revealed in the so-called Panama Papers, and forget about taxes for the rest of your life. But we must face up to the tax man and his Byzantine code of regulations every April without fail.
There is an old saying, attributed to Honoré de Balzac, that behind every great fortune there lies a great crime. It would be equally true to say that behind every great fortune lies a meticulous attention to the tax code and an office full of high-powered accountants.
To be fair it’s not only the wealthy who need to work so hard and so imaginatively at their tax returns. Tax time is a nightmare for many people who work for cash. Many contractors we deal with - plumbers, roofers, lawn care persons, and handymen - expect to be paid in cash, as if credit and checks had never been invented. "It saves on paperwork" they say. It must be incredibly hard to keep track of all those almost identical green notes. A careless or amnesiac record-keeper could easily forget quite large amounts of income. So, this must be an anxious time for the hordes of cash-only workers, as they struggle to figure out their fair share.
This annual chore of "doing the taxes" is a ritual of intimidation and humiliation, a kind of economic hazing designed to expose our weaknesses. If proper records have not been kept, if income if any has not been recorded, if expenses have not been noted, and if we still can't remember the difference between a dividend and a capital gain, we’re in trouble.
A lot of intelligent people take pride in their literacy. But the dark side of literacy is all too often innumeracy, or mathematical incompetence. These liberal arts types – and I have to include myself among them - are destined never to be rich because they don’t understand the basic rules of accounting, or indeed care about them. It's no consolation to be reminded that money can't buy a whole lot of desirable things such as immortality, better government, a cleaner environment or a good night's sleep - in short that money can’t buy happiness.
This may be true, I hope it is, but I would love to have a chance to check it out for myself by becoming fabulously rich. That’s not going to happen, and it serves me right for not paying more attention to numbers in school. The financial alchemy of the tax wizards is as miraculous to me as anything in Harry Potter. Is it real magic, or is it just a conjuring trick? And it’s not only about money. Money is the least of it. We live in a mathematical world, as Newton and Einstein demonstrated. There’s no reason to be proud of not understanding the mysteries of the universe, or the even deeper mysteries of the tax code. On the other hand if we actually understood it we might want to do something about it and that way, as Senator Sanders might say, lies a revolution.
Copyright: David Bouchier