Fun with the U.S. Tax Code
America’s tax code is a 74,000-page unintentional comedy.


Deroy Murdock

The Tax Code is highly precise about what constitutes luxury cars. According to Section 280F(a)(1)(A)(iii), for bonus depreciation, a “luxury automobile” must cost at least $24,935. Willis had to use algebra to calculate this figure!

Under Section 1.170A-12(e)(2), the Treasury explains the “special factor” used for “the valuation of a remainder interest following two lives”:

The Tax Code is a museum of run-on sentences. Just the first sentence of Section 509(a) — on private foundations — contains one period, three semi-colons, six dashes, nine parentheticals, and 25 commas. Professor Willis sees 327 words in that sentence. I find 373, using Microsoft Word’s word-count function. Perhaps it depends on what the meaning of the word “word” is. Word considers “170(b)(1)(A)” a word. I would call it something else — although that word fails me.

Now, take a deep breath and try to read this sentence aloud without fainting:

For purposes of this title, the term “private foundation” means a domestic or foreign organization described in section 501(c)(3) other than–

(1) an organization described in section 170(b)(1)(A) (other than in clauses (vii) and (viii)); (2) an organization which –

(A) normally receives more than one-third of its support in each taxable year from any combination of –

(i) gifts, grants, contributions, or membership fees, and (ii) gross receipts from admissions, sales of merchandise, performance of services, or furnishing of facilities, in an activity which is not an unrelated trade or business (within the meaning of section 513), not including such receipts from any person, or from any bureau or similar agency of a governmental unit (as described in section 170(c)(1)), in any taxable year to the extent such receipts exceed the greater of $5,000 or 1 percent of the organization’s support in such taxable year,

from persons other than disqualified persons (as defined in section 4946) with respect to the organization, from governmental units described in section 170(c)(1), or from organizations described in section 170(b)(1)(A) (other than in clauses (vii) and (viii)), and (B) normally receives not more than one-third of its support in each taxable year from the sum of –

(i) gross investment income (as defined in subsection (e)) and (ii) the excess (if any) of the amount of the unrelated business taxable income (as defined in section 512) over the amount of the tax imposed by section 511;

(3) an organization which –

(A) is organized, and at all times thereafter is operated, exclusively for the benefit of, to perform the functions of, or to carry out the purposes of one or more specified organizations described in paragraph (1) or (2), (B) is –

(i) operated, supervised, or controlled by one or more organizations described in paragraph (1) or (2), (ii) supervised or controlled in connection with one or more such organizations, or (iii) operated in connection with one or more such organizations, and

(C) is not controlled directly or indirectly by one or more disqualified persons (as defined in section 4946) other than foundation managers and other than one or more organizations described in paragraph (1) or (2); and 

(4) an organization which is organized and operated exclusively for testing for public safety.

A 373-word sentence is a mere monosyllable compared to the totality of the U.S. Tax Code. The CCH Standard Federal Tax Reporter includes every page of the Code, plus the swarm of regulations, decisions, and other fine print that govern federal taxes. CCH estimates that the Tax Code spanned just 400 pages when Congress imposed the income tax in 1913. By 1984, as Ronald Reagan chopped rates and streamlined the tax thicket, it stretched to 26,300 pages. Today, the U.S. Tax Code runs 73,954 pages. That equals 57 copies of Vintage Classics’ 1,296-page edition of War and Peace. And the only thing more hilarious than Tolstoy’s saga is 57 copies of it, standing side by side.

America needs a universal 10 percent flat tax with no deductions. This would be far less knee-slapping than the status quo. However, shutting every loophole, macheteing rates, and requiring every American to have some skin in the game and pay the same fair share would replace today’s vaudeville act with a tax code worthy of Earth’s sole surviving superpower.

Meanwhile, the Tax Foundation reports that Tax Freedom Day will fall on Thursday, April 18. That is five days later than last year. So, the biggest joke of all is that if you pay your taxes on April 15, you still must pay your taxes. You will owe Uncle Sam three more days of hard labor in 2013 before you start working for yourself.

— Deroy Murdock is a Fox News contributor, a nationally syndicated columnist with the Scripps Howard News Service, and a media fellow with the Hoover Institution on War, Revolution, and Peace at Stanford University.