The Tax Man Approacheth

This year I waited far too long to do my taxes.

But as I was wading through the questions and forms of my e-file website, a thought occurred to me.  My employer submitted to the government the exact same information that they gave me on my W-2.  And my bank sent the government the same information that they sent me on my 1099s.

I also noticed that each daycare service for my kid, and charitable organization I gave money to, and my employer, and my wife's employer, and my kid's college savings fund -- all of them -- have identification numbers on all of their paperwork.

And the little light inside my head turned on.

Essentially all I do when I file my income taxes is give the state and federal governments information about my finances that they already have.  And if they don't have all of the information, it wouldn't be too big a leap to make it possible in the Internet Age.

If each charitable organization, brokerage, retirement savings plan manager, employer, welfare agency, bank, church, and so on, simply rolled up all of the information for everyone they had dealings with and gave that information to the government (they have all of this information on hand anyway, and they have ID numbers registered with Big Brother), then I wouldn't have to file taxes at all.  They probably do this to some extent anyway as a part of their mid-April tax dance.  The government would only have to feed all that information into the Great Big Number-Crunching Tax Machine, and spit out a refund or a bill.

At best, filing income tax allows a person to attempt to lower their tax burden by claiming that they did things that can't be proven.  You can claim expenses on office supplies if you work out of your own basement, and so on.  But if you run your own business, which means you have one of those magic ID numbers, all of that is supposed to get reported anyway.  Anything beyond that smacks of potential fraud.  Or the potential for mistakes.

We should take the next step in streamlining the tax process and let the state and federal governments do the heavy lifting in April.  Loopholes would be closed, everyone would be accounted for, it would all be done on time -- well, maybe by August -- and I wouldn't have to spend all this time reporting things the government already knows.

The folks at H&R Block might have to find a new angle though.