Category: Life

In my new work we deal with a lot of taxes. In fairness, I do very little with the actual taxes. No, I have fun building the spreadsheets that calculate them–which I can say is rather nerve racking as the Federal Government is not very forgiving when mistakes are made–but I digress.

One of our most frequent taxes is called the International Fuel Tax Agree (or IFTA). It applies to the United States and most of Canada and was developed as a way to avoid the old method of making a truck register for fuel taxes in each state they would be traveling through. So, in general, IFTA was a really good idea all around.

One day my boss asked if I could make a diagram that explains how IFTA works so our clients could better understand it.

I said, “Sure… How does it work?” In defense of my question, I knew how it worked because I reviewed the formulas that make up the calculations that determine the taxes we report. I was really hoping for exactly what my boss gave me: an oral version of the formulas, which follow:

Total miles / Total gallons = MPG
State miles / MPG = Taxable gallons
Taxable gallons – Gallons bought in the State = Net taxable gallons
Net taxable gallons * Tax rate = Tax due

It is no wonder to me that people get confused on how the tax works. After a few minutes, it hit me: IFTA is actually very simple. Instead of thinking about the formulas we use to generate taxes amounts, I just had to think about what the tax was actually taxing (the key is in the MPG calculations). Thus, the grand conclusion is that IFTA is a calculation of fuel consumed while traveling through the state. In other words, how much fuel would you have needed to buy to operate in a given state. Sure, there is some averaging in there, but that is just to make it calculate easier.

It felt good to take something as complicated as the robust formulas and summarize it in a handful of words.

IFTA: A tax on the fuel you used in a state.

(Okay, two handfuls and a toe, but it is still much less complicated than the original formulas. A copy of the diagram is attached for amusement.)

How IFTA is Calculated. ©2012, used by permission. Details available upon request.

Note: I wrote this back when I was an intern for a certain government research facility. I wrote it on the long the (2 hour) bus ride from “the site” and edited the next day on the same, long bus ride. I have included some additional thought in italics.

Working for a government contractor (basically the government) has been an interesting experience. Of course there have the normal “we can’t do that” and “we have to submit the change for approval” (it took more than 5 months to get approval to change minor wording on a post-training survey) but there has also been an interesting transition as they have been cutting staff.

The need and want to cut cost is present in every company I can think of and has the oblivious benefit of making the company more profitable. There is, however, an interesting and unfortunate side effect to these cost cutting efforts: innovation is stifled.

Time and again, there is a clear pattern of disparate entities getting together and sparking evolutionary or revolutionary changes seemingly based on their proximity alone. (Duncan Hines revolutionary invention of cake mix came when a baking guy was having lunch with a powdered soap guy and they developed a method of creating the liquid mix and then spraying it onto screen for powdering like the soap guys did; Post-it notes’ evolutionary invention came about when one inventor created the weak, reusable glue and the other found a use for it; and many more, if you do some digging.) Ideas that otherwise would have taken a long time to come about, if they ever emerged. Which then confuses me as to why you would be stripping away most of the opportunities for new, innovative ideas by saddling down employees with so much work (by cutting down the help for those tasks) that they have no chance to interact with others. It would seem that instead of cutting everything down, companies should set more people free: free to interact with and learn about other departments, free to dream, free to bear those dreams into reality, free to create new revenue streams.

But then, what do I know about “the real world,” I am just an intern who created a website in a week that took other departments several months to do.

P.S. Can I mention that because the web programmer (namely me) was working with “the site” management while hanging out with the Training department instructors and cavorting with the PR people, he was able to completely redesign their daily internal publication in a way that greatly improved the appeal and readability of the content? How? By asking why people never read the publication. No magic, just someone who could do something being around people with good ideas.