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Why Are Taxes So Complicated? (The Musical?)

2017-11-17 · explainer · Hank · 6:20 · watch on YouTube

Topic: US politics & society · mode: Explainer · tags: timely hook, song or performance

Partly in song, Hank explains why the US tax code is complicated: a head tax or flat tax would not work, so the code taxes value, corporations, capital gains, uses brackets, credits and fairness provisions, and adds rules against avoidance; every change affects real people.

What is said

The parts of the video and what is said in each (★ — how much it matters to the video).

00:00:00 — John was too sick to make a video; Hank introduces the tax code

  • ★★ Hank hopes John is feeling better: John missed a video for the first time in a long time because he was very sick, which Hank cannot hold against him. — 00:00:00 · John Green

00:00:13 — Everyone agrees it is too complicated; the head tax and why it fails ('tax jail')

  • ★★ Hank thinks everybody agrees the US tax code is too complicated, but nobody agrees on the best way to simplify it. (hedged) — 00:00:17 · United States
  • ★★ Hank says the simplest system is a head tax, everyone paying the same amount: about $12,000 a year each would pay the entire federal budget. (hedged) — 00:00:35 · United States
  • ★★ Hank says a head tax works for families like his but not for people without income, such as retirees or disabled people, or for those it would take all their earnings from. — 00:00:50

00:01:15 — Flat income tax at 50%; taxing value not money; corporations and the Republican plan

  • ★★★ Hank says that for a flat tax on individual income to fund the government, everyone would have to pay 50%, a little more in fact. — 00:01:21
  • ★★ Hank says the US tax code taxes value, not money: a car received for work is income, which matters when payment includes company stock. — 00:01:47 · United States
  • ★★ Hank says much US money is made by corporations, most of which are currently taxed like people: a gain in his businesses' accounts is taxed as his own income. — 00:02:13
  • ★★ Hank says Republicans in Congress want people like him to pay much less tax on money made by their corporations; he does not know why, since it is still income to him. (unsure) — 00:02:47 · Republican Party, United States Congress

00:03:09 — Capital gains; why low earners are taxed less and high earners more; brackets

  • ★★ Hank says taxing only ordinary income misses capital gains, buying something that rises in value and selling it, mostly real estate and stocks. — 00:03:09
  • ★★ Hank's first reason not to tax low earners: they spend almost all their income, save little, and with less money are likelier to need social services that cost the government. — 00:03:44
  • ★★ Hank's second reason: taxing low earners contributes little to the budget while being extremely impactful to them. — 00:03:59
  • ★★ Hank says high earners are taxed more because they can afford it and because raising their rate brings in far more money; hence brackets and more complexity. — 00:04:12

00:04:27 — Tax credits and write-offs to encourage behaviour; fairness provisions such as graduate tuition deferment

  • ★★ Hank says the government uses the code to encourage behaviour: credits for retirement saving, school and health-care saving, and mortgage write-offs for homeownership. — 00:04:27
  • ★★ Hank says the code has fairness provisions: a graduate student might earn about $10,000 a year in actual money while receiving tuition deferment. (hedged) — 00:04:45
  • ★★ Hank says the value of deferred tuition, perhaps $35,000, is technically income, but because taxing it would be a huge burden on graduate students it is not counted, at least at the moment; what Congress is planning, he says, is not this discussion. (hedged) — 00:05:00 · United States Congress

00:05:23 — Rules against tax avoidance; every change affects real people; sign-off song

  • ★★ Hank says the last reason is rich people avoiding taxes: annoying rules in his business taxes exist because someone used an underhanded trick and the government had to respond. (playful) — 00:05:23
  • ★★★ Hank says nobody likes the complexity, but he worries about simplification because every change to the tax code has real impacts on real people; that is why it is complicated. — 00:05:56

In the description and comments

  • ★ The description says Hank meant to make a tax-policy video and ended up singing a bunch and repeatedly falling out of his chair. (playful) — video description

Humor (significant)

  • A low earner cannot pay the head tax, so the government comes in and — 00:01:04

    “They just take you, they take you to tax jail.”

  • Hank explains that much US money is not made by humans — 00:02:13

    “It's made by these non-meat people called corporations.”

  • Hank tries to define what is taxed and breaks into song — 00:03:31

    “increase in value received by entities which make, make you unsurprised to see how there's complexity.”

  • The final reason taxes are so complicated is sung over guitar — 00:05:23

    “rich douchebags avoiding their taxes, so we've got to make up lots of rules to keep them paying their taxes.”

  • Hank thanks the anonymous tax avoider behind an annoying business-tax rule — 00:05:50

    “so that now everybody in the world has to deal with this new rule.”

Threads in this video

Where the stories that moved here went next

Mentioned

Central: tax

Also: Organizations: Republican Party · United States Congress

Concepts: capital gain · corporate tax · flat tax · mortgage loan · ordinary income · poll tax · stock market · tax avoidance · tax bracket · tax credit

Places: United States

Policies: Tax Cuts and Jobs Act

Also centred on tax: Clinton vs. Sanders: POLICY IS EXCITING! · Who Do Tax Breaks Benefit?

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