Tax law is random. Don’t take it seriously.
Sometimes I get pretty incensed about the absurd results that tax law causes. This is especially true when an arbitrary or capricious law causes permanent financial ruin to a person or family. Watching these things happen, for instance, is why we detest voluntary disclosure cases.
Tax law is written by 10,000 authors of wildly varying intelligence and intention. Different pieces were written at different times — sometimes decades apart.
Sometimes the authors of the novel we call the Internal Revenue Code talk to each other. Sometimes they read what they wrote, but other times they just take someone’s assurance that the passage they just wrote is OK.
I’m talking about Congress of course. None of them read the laws they pass. If they did, do you think they would understand it? NFW. They listen to staffers and lobbyists and vote accordingly. I would wager that there are people in Chief Counsel’s office right now who have spent 20 years in a particular area who from time to time get handed some new law from The Hill and who can only look at it and utter “WTF is that?”
Sometimes a person is writing something that connects to a plot point in the novel that was written 50 years ago. Much of what we deal with is from the 1954 Code. And that, in turn, has its roots in the 1939 Code.
But it gets better than that. Allow me to delve into metaphor for a moment. God wrote the Holy Bible and then over the course of millennia monks and self-appointed holy men copies the text, added footnotes, explanations, and interpretations. Soon we took all of their stuff almost as seriously as the Bible itself. Hundreds of thousands of these people toiled. Some well-intentioned. Some with a deep feeling of malevolence toward the flock of believers entrusted to them. Some just showing up and punching the clock and waiting for retirement.
They, sitting in monasteries and the tax equivalent of monasteries and seminaries, pass along the word of God to the parish priests tending the flock. They move about the congregation to encourage all to follow the scriptures–as interpreted by the Pope and other luminaries, with the encouragement of the purifying fire for heretics, if necessary. Some of them sincerely try their best and comfort the afflicted in times of sickness, bereavement, and uncertainty. Others feel it is their appointed duty to wreak the vengeance of The Lord on unbelievers. And who, among the flock, is without sin?
That’s the way I understand the logic of tax law. Pre-Reformation Catholicism.
(True confessions. Someone–it might have been me–borrowed a copy of Will and Ariel Durant’s volume on The Reformation from his dad. It is simultaneously stultifying tedious and wildly interesting.) (It is a brick of a book.) (But I digress.)
Look up the identity of the House Ways & Means Committee when the 1954 Code was written. The 1954 Code contains the foundation of the international rules we deal with. Mr. Doughton was born during the Civil War. In his day international commerce was marked by the introduction of the steam ship and that remarkable new invention of that Italian man, Mr. Marconi–radio.
Yet we still wrestle with the intellectual underpinnings of his world view in international tax. How different is the world today from the world of a 21 year old Robert Doughton — in 1884?
This is the curse of the Internal Revenue Code. We must operate with the legacy of 100-year old “best practices.” Science, at least, casts aside clearly inadequate hypotheses. Not so with government.
In short, don’t take tax law too seriously. Gently laugh at the whole system and treat it as a game or an elaborately authored work of fiction.
Have a barbecue in the back yard with the family and look at the sunset. Tax law doesn’t make sense and it is not supposed to. Those hours spent gnawing angrily on the dry bone of injustice are hours you deliberately took from your life, never to be returned to you.
(Aside: the title of this post is a hat tip to Edsger Dijkstra’s seminal letter to the editor.)