A harp is a piano after tax

In America April is the cruellest month. On April the 14th the entire country is in the grip of an essay crisis. Cable TV resonates with last minute advice.

Accountants burn the midnight oil, charge panic rates and the Cold War between the Federal Government and the individual reaches boiling point.

Although the victor is never in question. All that because April 15th is tax day, judgement day when the American citizen settles his debts with uncle Sam.

Unlike in the UK the vast majority of people do not have their income taxes deducted at source. They pay them at the end of the year after a calculation so complicated and nerve teasing it makes the rules of Quidditch seem simple by comparison. Preparations for the big day are like planning for a wedding with only the daunting sense of commitment but none of the joy.

I sit down with my charming accountant in his sumptuous office in the genteel neighbourhood of Old Town Alexandria. He has the bedside manner of a kind confessor combined with a surgeon forced to break bad news.

There are deductions – for mortgage interest and charitable contributions, for instance- that the UK does not permit. But there are also additional tax rates, like the alternative minimum tax, that make no sense and hurt all the more. The final tax bill is a cocktail of federal, state and property taxes as well as a levy on your global income.

So the interest on your UK savings bank account, if you have one, or your silent stake in that pig farm in Patagonia are all put into the mix. It is far more complicated than in the UK but ultimately less punitive. The overall tax on your combined income rarely exceeds 37 per cent. (If you are Mitt Romney and only pay tax on your dividends you get away with 15 per cent.)

Read more: Budget 2012 – do small businesses want a cut in 50p tax rate?

There are significant differences in corporate, property or consumption taxes between the states. Needless to say Americans are upset even though their rates are lower than the British ones. But then they also get angry about four dollars for a gallon of petrol, when we in the UK put up with twice as much without grumbling.

In a country founded on ideals of freedom, the myth of the frontier spirit and the entitlement of the individual to bear arms, speak his mind and be the master of his own destiny the notion of taxation was never going to go down well.

It rubs against the very DNA of America. In the UK tax is dominated by one question: what is the correct sliding scale for income tax. How much more should the rich contribute to society? What number should be attached to fairness.

In the US the debate is more existential because there is far less agreement about the very concept of society, about the relationship between the individual and the collective. This question is as open today as it was a century ago.

The debate is also tribal. Dozens of Republican Congressmen have signed a pledge with America’s most famous “flat tax” crusader -ie one rate for all, rich or poor- Grover Norquist. Grover looks like a monk, sits in a tiny office crammed full of papers under a portrait of his hero Ronald Reagan and makes sure that Republican candidates don’t break their promises. If they do, Grover picks up the phone to Fox News.

The fact that any politician would allow themselves to be shackled like this over taxes indicates just how onerous taxation is considered by much of the Grand Old Party these days. Ever since George H Bush famously promised no new taxes “read my lips” only to raise them, get punished at the polls and lose re-election despite winning the Gulf War, every Republican fears the peril of tax hikes.

The Democrats are in general more tolerant of higher taxes because they expect the government to do more for them. So when the House of Representatives, which controls the budget is dominated by Republicans and a Democrat is President you can expect at best a lively debate about taxation and at worse logjam.

Congressman Paul Ryan, the Republican chairman of the House Budget Committee announced today that he would like to lower the top federal tax rate to 25 per cent. The Democrats will howl with indignation and the President will threaten to veto anything as radical as this when the country is already sinking under a mountain of debt and needs more not less revenue. Logjam it is then.

The debate is perennial, bruising and inconclusive. Its confusion and acrimony shows how little consensus there is over the big questions governing America today. Google reveals hundreds of jokes and one liners about the burden of tax. As we inch towards deadline day on April 15th they congest the airwaves. My favourite is this quirky and not particularly funny one from Arkansas: “a harp is a piano after tax.” Get it?

Follow Matt Frei on Twitter @mattfrei