The Pot Calling the Pot Black: Congress Points a Finger at the Internal Revenue Code (and Itself)

Excerpt from Practical US/Domestic Tax Strategies by Joseph B. Darby III (Greenberg Traurig LLP)

On April 10, 2008, the Small Business Committee of the U.S. House of Representatives released a Report stating that small businesses, which could otherwise help the U.S. economy get “back on track,” are burdened by a variety of barriers under the “remarkably outdated tax code.”

In the legendarily famous words of Homer Simpson himself, “Duh!”

What makes this Report newsworthy is not the content but rather the author. We are familiar in politics with the “pot calling the kettle black,” since, after all, finger-pointing and blame-shifting is pretty much what Congress does. However, since the primary party to blame for the tax code being “remarkably outdated” is Congress itself, Congress has, in effect, decided to point a finger at itself: This is the pot calling the pot black. Now that is news, indeed.

The funny thing is that the Report is absolutely dead-on accurate in its criticisms of the Code—so much so that it gives the reader a small hope that some of the changes might actually be enacted. Experience shows that when members of Congress are bickering and blaming each other, very little gets done. However, when Congress decides to look in a mirror and blame itself—well, almost anything seems possible.

Although the Report is concerned primarily with “small business” issues, the recommendations (if adopted) would benefit all tax-paying businesses, by simplifying the law and eliminating burdensome recordkeeping. Best of all, the Report might actually initiate a movement in Congress to consider the extraordinary burdens it places on U.S. taxpayers as part of the “voluntary” U.S. income tax system. In short, the Report is a surprisingly candid document that should be read by taxpayers of all sizes and stripes.

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