When gas was more than $4 a gallon, consuming more than 10% of some households' income, many people probably wished that those in Washington who represent us actually experienced life as we do.
Along similar lines, and given that we're in the thick of tax season, a recent Politico survey asked our senators a few questions about taxes. Interestingly, of the 58 who answered, only two said that they prepare their own taxes. The rest pay others to do so. This is probably because the average senator feels too busy to deal with tax returns. And many of them might have some complicated issues to address in their returns as well. Still, I wonder ... if they actually sat down and tried to prepare a tax return by hand -- perhaps a simple one for their child -- it might help them appreciate just how difficult and complicated tax forms have become.
As I explained in a recent article on our national taxpayer advocate, Nina Olson, our tax code includes nearly 4 million words, and preparing returns costs taxpayers about 7.6 billion hours and $193 billion each year.
See how that $193 billion dwarfs the amount spent on taxes by some well-known, massive companies:
|
Company |
Corporate tax paid during past 12 months |
|---|---|
|
ExxonMobil (NYSE:XOM) |
$36.5 billion |
|
Wal-Mart (NYSE:WMT) |
$7.1 billion |
|
Microsoft (NASDAQ:MSFT) |
$5.2 billion |
|
IBM (NYSE:IBM) |
$4.4 billion |
|
CVS Caremark (NYSE:CVS) |
$2.2 billion |
|
Boeing (NYSE:BA) |
$1.3 billion |
|
General Electric (NYSE:GE) |
$1.1 billion |
Source: Capital IQ, a division of Standard and Poor's.
In fact, that amount represents more than half of all corporate taxes collected by the government in its 2007 fiscal year.
I tried to prepare my own return by hand just once and was appalled at how tricky it is. If you need to change one number somewhere, you often then have to backtrack and change all the numbers it influences all over the return. It can get messy and confusing, quickly. Here's hoping that Congress listens to Olson's plea for simplification.
Oops
Meanwhile, you can aim to be more successful with your taxes than many government officials have been. Of the responding senators, 16% were aware of mistakes in their returns, and recent headlines have pointed out others' errors, from prospective cabinet members to former vice-presidential candidates.
So keep your eyes open while dealing with taxes, Fool. And good luck!
