Taxes

In their book Freakonomics, Steven D. Levitt and Stephen J. Dubner explain how a simple change to U. S. tax rules in 1987 exposed the depth of the public's willingness to deceive for financial gain:

In the 1980s, an I.R.S. research officer in Washington named John Szilagyi had seen enough random audits to know that some taxpayers were incorrectly claiming dependants for the sake of exemption. Sometimes it was a genuine mistake (a divorced wife and husband making duplicate claims on their children), and sometimes the claims were comically fraudulent (Szilagyi recalls at least one dependent's name listed as Fluffy, who was quite obviously a pet rather than a child).

Szilagyi decided that the most efficient way to clean up this mess was to simply require taxpayers to list their children's Social Security numbers… The idea never made its way out of the agency.

A few years later, however, with Congress clamoring for more tax revenue, Szilagyi's idea was dug up, rushed forward, and put into law for tax year 1986. When the returns started coming in the following April, Szilagyi recalls, he and his bosses were shocked: seven million dependents had suddenly vanished from the tax rolls, some incalculable combination of real pets and phantom children. Szilagyi's clever twist generated nearly $3 billion in revenues in a single year.

Freakonomics is a fascinating book by economist Steven Levitt that turns conventional wisdom on its head. On the subject of cheating, Levitt calls it "a prominent feature in just about every human endeavor." Although he doesn't declare it part of human nature, Levitt notes the prevalence of cheating among ordinary schoolteachers, wait staff, and payroll managers. While evidence for cheating is often hard to uncover, at times it is overwhelming.

Consider what happened one spring evening at midnight in 1987: seven million American children suddenly disappeared. The worst kidnapping wave in history? Hardly. It was the night of April 15, and the Internal Revenue Service had just changed a rule. Instead of merely listing the name of each dependent child, tax filers were now required to provide a Social Security number. Suddenly, seven million children—children who had existed only as phantom exemptions on the previous year's 1040 forms—vanished, representing about one in ten of all dependent children in the United States.

Few things in life are as inevitable as taxes. ... But taxes aren't limited to the funds we pay the government to keep itself running. Sometimes we levy heavy taxes on ourselves. When we make ourselves keep paying and paying for some mistake, when we expect perfection, when we are unwilling to forgive our failures, we pay a higher tax for being human than anyone, even God, expects. We all have a price to pay for being human, but we don't have to become self-extortionists, expecting more of ourselves than we can possibly pay.

I picked up the tax package sent by our CPA. For once, I'd surprise my husband Henry and get our tax information in early. As I scanned the lines, I noticed Henry had filled in some lines. To the question, "Did your marital status change ...?" he had circled "Yes." As far as I knew, we weren't considering separation or divorce. In fact, we'd soon celebrate our 50th anniversary--unless he had other plans. I moved my hand to uncover the next two words: "Older ... better." I liked that change in status!

Gary Thomas writes in Christianity Today:

Thinking about eternity helps us retrieve [perspective]. I'm reminded of this every year when I figure my taxes. During the year, I rejoice at the paychecks and extra income, and sometimes I flinch when I write out the tithe and offering. I do my best to be a joyful giver, but I confess it is not always easy, especially when there are other perceived needs and wants. At the end of the year, however, all of that changes. As I'm figuring my tax liability, I wince at every source of income and rejoice with every tithe and offering check--more income means more tax, but every offering and tithe means less tax. Everything is turned upside down, or perhaps, more appropriately, right-side up. I suspect judgment day will be like that.