This time of year is tax time here in the USA. What this means is that pretty much everyone who worked and earned money in 2008 has to file a tax return. Not filing a tax return can lead to serious consequences, such as interest on money owed and financial  penalties for not actually filing a return.

I always thought this method of organizing a tax system to be bizarre to say the least. In the UK and Europe, we have a system called PAYE or Pay As You Earn. Under this system the tax authorities look at your salary or wage and calculate to the penny how much to take from your paycheck in taxes. This system works very well and, if there is a problem, it is usually fixed pretty quickly. In the USA, the tax law is so complex that I don’t think anyone understands how it works. There are so many deductions for one thing or another, plus you can ask your employer to take out less money in taxes (you will owe the tax authorities money at the end of the year), or you can choose to have them take out too much (they will owe you each year).

In addition, you have to file both a federal and state tax return. Of course, I have looked at the forms and paperwork and, I have to confess, I have no idea how any of it works. Fortunately for me, Irene can pretty much figure it out, but, if it was left to me, I could not do it. In that situation, our taxes would not be filed because I cannot understand the forms.

As for the forms, each year we get them in the mail and with the accompanying instructions the whole thing is as long as a telephone directory. The whole annual event of filing taxes is just ludicrous and an entire industry has evolved to help people file their taxes. May be that is the reason why the current system exists.