May 19, 2024

Economix: ‘The Pale King’: Battling Tax Boredom in Peoria

President Ronald Reagan began a radio speech 25 years ago by reading from “a very famous U.S. government document.” It wasn’t the Declaration of Independence or Lincoln’s Second Inaugural, but a notoriously tangled sentence from Section 509(a) of the Internal Revenue Code:

“For purposes of Paragraph (3), an organization described in Paragraph (2) shall be deemed to include an organization described in Section 501(c) (4), (5), or (6) which would be described in Paragraph (2) if it were an organization described in Section 509(a)(3).”

Reagan’s speech helped win passage of the bipartisan Tax Reform Act of 1986, which lowered marginal tax rates and eliminated many tax shelters. But it also may have helped inspire “The Pale King,” David Foster Wallace’s posthumous unfinished novel about a group of I.R.S. agents battling extreme boredom at a tax processing center in Peoria, Ill., in the years just before the 1986 reforms.

“The Pale King,” which is officially published on April 15, has drawn praise from literary critics for its powerful and often hilarious portrait of the bureaucratized American soul. But Mr. Wallace was interested in the I.R.S. as more than just a metaphor. In an article in Sunday’s Book Review, I write about the extraordinary research Mr. Wallace, who died in 2008, did on the tax system. Lots of novelists contemplate how much they can deduct for their home office. How many sign up for accounting classes and plow through I.R.S. white papers on how to deduct foreign tax payments?

Mr. Wallace also corresponded with several tax accountants, including Stephen Lacy of Evanston, Ill., a former philosophy student (as Mr. Wallace was) who could talk Wittgenstein and Derrida as fluently as NOLs and Schedule Cs. Mr. Lacy answered questions about the “tax gap” and exotic tax shelters like “the Silver Butterfly.” He may have also given Mr. Wallace ballast for one crucial conceit of “The Pale King”: that the soul-crushing boredom of tax work can lead to transcendent bliss, “a second-by-second joy and gratitude at the gift of being alive.”

In a letter written in September 2005 and now held in the Wallace archive at the Harry Ransom Center at the University of Texas, Mr. Lacy sent Mr. Wallace a copy of that sentence from section509(a) and described his reaction.

“I find that although I can never quite understand what it says, after I read it several times and concentrate, I can actually get into a kind of weird Zen-type meditation high!” he wrote, adding: “Then again sometimes it provokes a profound anxiety attack.”

Reagan clearly sympathized with that second reaction — not that it ultimately mattered. In an irony Mr. Wallace surely would have appreciated, the sentence in Reagan’s speech is still in the tax code.

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