STEVE CHIOTAKIS: Today, millions of Americans are in a race against the clock — taking those last minute complicated tax returns to the mailbox or post office.
Even Fortune magazine’s Allan Sloan, who gets paid to write about this stuff — business and taxes — can’t figure this stuff out. And he’s here to commiserate. Good morning Allan.
ALLAN SLOAN: Good morning Steve. And Happy Tax Day to you!
CHIOTAKIS: All right, so I’m curious — taxes have become so complicated. I even read Albert Einstein, way back in the day, despised doing his taxes because he said they were so complicated.
SLOAN: If Albert were alive now, he’d blow a brain gasket because unless you’re taking the standard deduction, there is no way on God’s earth you could fill out your tax return without software — in some cases — including might even with it.
CHIOTAKIS: Why have taxes become so complicated? How did we get here?
SLOAN: Well, you have to think of it as an arms race. People keep finding ways to avoid taxes. The government and the legislators keep changing the rules to make them pay. Plus, as a bonus you have the alternative minimum tax, which used to be targeted at a handful of people, but as now effects millions of people in the middle and upper middle classes, which requires a whole other set of calculations with different assumptions.
CHIOTAKIS: So the AMT, that’s where you have to multiply by 2 and divide be 16 and all of this — yeah.
SLOAN: Right, and it’s something to do with the lunar cycle. And your body fat mass. And I have something — I have a $38 credit carry forward to 2011. And I have no idea what that means or what it’s for. I also have a minimum foreign tax credit on exclusion items of $53. I have no idea what that means.
CHIOTAKIS: You know, Allan, President Obama, like many of his predecessors, has promised to reform the tax code. Make it simpler. Is he going to succeed in that?
SLOAN: Of course not. Because no one ever succeeds. 25 years ago, they supposedly simplified it. But in the 25 years since it’s gotten more and more complicated. Everyone piles on those special things — allowances for this, credits for that. I think the entire thing frankly is a plot by the software companies to make it impossible to do your own income tax without software and maybe they’re the people should be looking at next.
CHIOTAKIS: Fortune magazine’s Allan Sloan on this tax day. Allan, thanks.
SLOAN: You’re welcome Steve.
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