A Few Thoughts on the Paying of Taxes

It's April 15th, and procrastinating Americans everywhere are rushing to get their tax returns in the mail (or frenetically trying to e-file). The normal spectacle of long lines at post offices that stay open until midnight for the occasion is being displaced today by the "tea parties" being held around the country to protest...something.

Taxes, I guess, although Barack Obama has yet to raise anything other than the cigarette tax (unless one considers deficit spending to be an increase in future taxes, in which case it's worth asking why these groups weren't teabagging the Bush White House). Some pundits have argued that the Republican brand is so tarnished that the party's fight against "socialism" has made socialism more popular (see Harold Meyerson). I wouldn't be surprised if a healthy percentage of Americans were relishing the opportunity to pay their taxes today, simply to thumb their noses at the Dick Armeys of the world.

In any event, a few thoughts on the paying of taxes. In this country, those who pay a lot in taxes are generally considered to be pretty fortunate (they've earned a lot of money), but in the midst of recession those paying a lot to the government are even more fortunate. This is a very blue collar recession, with job losses heavily concentrated in manufacturing and construction, while professionals -- and even financial workers -- have done pretty well. As Ed Glaeser recently wrote, the story of the ruined millionaire gets press coverage because it's rare, and therefore interesting; for the most part white collar professionals are still working, and still cutting checks to the IRS.

Another funny thing is the extent to which the American government goes out of its way to make paying taxes a real hassle. The government has (for the most part) your earnings information, and could send you a return (PDF) already filled out, which you could accept, sign, and mail back immediately if you didn't want to itemize or otherwise complicate your filing. And as the inevitable stories of tax cheats circulate this week it's worth observing that the Europeans do quite well raising revenue via the difficult-to-avoid, easy-for-citizens to pay VAT.

If there's one thing about the tax system that I find particularly galling, however, it's the government's failure to raise revenues in ways that would also serve to improve social welfare -- by taxing "bads" instead of "goods."

Next time you're sitting in traffic, contemplate how congestion pricing could raise a lot of revenue and get rid of the traffic. Worried about obesity? Why not tax particularly unhealthy foods or drinks? It would raise money and save on health expenses, and it's less intrusive than outright bans on fatty foods or fast food chains. Something for Paul Volcker to consider while he's rewriting the tax code.

Comments

[Tony Petroski:]

"I wouldn't be surprised if a healthy percentage of Americans were relishing the opportunity to pay their taxes today, simply to thumb their noses at the Dick Armeys of the world."

To the author: Go to town. Pay your taxes with relish, and in order to get even with Dick Armey, pay twice or three times what you owe.

Apr 15 07:42 PM

[John Polomny:]

"If there's one thing about the tax system that I find particularly galling, however, it's the government's failure to raise revenues in ways that would also serve to improve social welfare -- by taxing "bads" instead of "goods."

As Milton Freidman said many times to many world improvers and do gooders like this author, "Where are we going to find all of these angels to reorder society for us, I dont even trust myself to do that".

This author is a statist that believes that it is possible to live for free off his neighbor. Taxation is theft. This is simple to understand in that people are threatened with violence if they do not pay. No difference between the government and a mugger on the street.

Apr 15 11:47 PM

[jpiretti:]

When you get off the can this morning and flush your waste material to the local municipal/county facilities, think about what you taxes pay for. If you don't want to pay your taxes, feel free to bury your crap in your front lawn...and please...stay off of "our" roads.


On Apr 15 11:47 PM John Polomny wrote:

> "If there's one thing about the tax system that I find particularly
> galling, however, it's the government's failure to raise revenues
> in ways that would also serve to improve social welfare -- by taxing
> "bads" instead of "goods."
>
> As Milton Freidman said many times to many world improvers and do
> gooders like this author, "Where are we going to find all of these
> angels to reorder society for us, I dont even trust myself to do
> that".
>
> This author is a statist that believes that it is possible to live
> for free off his neighbor. Taxation is theft. This is simple to understand
> in that people are threatened with violence if they do not pay. No
> difference between the government and a mugger on the street.

Apr 16 09:45 AM

[a. palmer jr.:]

Taxes are a necessary thing if we want to get things like sewage, roads, police, military, etc. It's the unnecessary taxes that I have issue with. Some of the money given for studies of mating habits of certain animals, the endowments for the arts, sporting arenas, and other things that should be paid by someone like me. I don't go to ball games so why should my taxes go to pay for sporting arenas? I don't have a kid in school so why should my tax money go for schools?
I know why sports teams want taxpayers to pay for their arenas but that certainly doesn't mean that we should do it.
I understand why on the schools but I think families with children in school should foot more of the burden than those who do not. The National Endowment for the Arts is a joke in my opinion. It is an entirely unnecessary thing for government to be involved in.

Apr 16 10:24 AM

[jpiretti:]

Well I can't argue with you on NEA funding even though I might be more willing to have my tax dollars support the arts, but I will disagree with you on public education. I believe we have a societal/economic obligation to educate the next generation's work force....forget the public policy argument, it's good economics.


On Apr 16 10:24 AM a. palmer jr. wrote:

> Taxes are a necessary thing if we want to get things like sewage,
> roads, police, military, etc. It's the unnecessary taxes that I have
> issue with. Some of the money given for studies of mating habits
> of certain animals, the endowments for the arts, sporting arenas,
> and other things that should be paid by someone like me. I don't
> go to ball games so why should my taxes go to pay for sporting arenas?
> I don't have a kid in school so why should my tax money go for schools?
>
> I know why sports teams want taxpayers to pay for their arenas but
> that certainly doesn't mean that we should do it.
> I understand why on the schools but I think families with children
> in school should foot more of the burden than those who do not. The
> National Endowment for the Arts is a joke in my opinion. It is an
> entirely unnecessary thing for government to be involved in.

Apr 16 10:51 AM

[JK Corcoran:]

I am more than willing to pay a fair tax on my success. I become unhappy with taxes when they are used to subsidize failure. If you buy beyond your means, leverage your business beyond reason, or get so drunk on your size and power that you need the government to "save" you so you don't drag us all down with you...that's when I feel my taxes are going to a bad end. Remember Japan, they have had 19 "stimulus" injections from the government and they are still in recession. What are they doing? More "stimulus" courtesy of the successful. This does not work. Tread lightly congress people, we will remember this when you come up for re-election...

Apr 16 11:03 AM

[jpiretti:]

While I won't pretend to be an expert on the Japanese economy, I will point out clear distinctions to our infrastructure needs. Japan made the mistake in the 80's of backloading their stimulus dollars and underfunding the effort relative to their GDP. Also, the Japanese infrastructure was in good condition in the 80's (they duplicated many bridges/roads not needed) as opposed to ours, which is an embarrasement. Consider only 10 years ago, we were the envy of the technological world and now we have a 3rd world broadband network. Of course we know the condition of our roads/bridges, but consider the lost $ with our inefficient power grid...staggering!!!


On Apr 16 11:03 AM JK Corcoran wrote:

> I am more than willing to pay a fair tax on my success. I become
> unhappy with taxes when they are used to subsidize failure. If you
> buy beyond your means, leverage your business beyond reason, or get
> so drunk on your size and power that you need the government to "save"
> you so you don't drag us all down with you...that's when I feel my
> taxes are going to a bad end. Remember Japan, they have had 19 "stimulus"
> injections from the government and they are still in recession. What
> are they doing? More "stimulus" courtesy of the successful. This
> does not work. Tread lightly congress people, we will remember this
> when you come up for re-election...

Apr 16 11:21 AM

[oldfolkdancer:]

Taxing the rich never brings in enough revenue. The working stiffs in the middle get hit by the taxes on utilities, sales taxes, higher prices on goods to offset taxes on corporations as well as payroll taxes. It wouldn't be so bad if there was good value received but there isn't.

Apr 16 11:57 AM

[User 338123:]

Income taxes don't pay for local roads, schools,police,fire,et... Those are generally paid for through property or user taxes at the local level. Interstate highways are paid through excise taxes at the federal level. The constitution makes a distiction between direct and indirect taxes that has sadly been lost absent any ammendment directly repealing such a disitinction. The current tax on 'income' (whatever that is) is purely a social engineering tax and a vote buying, influence peddling tax imposed in a totalitarian manner. The engineers, in this case, are the geniuses in DC. Who are these guys? Do you really want a society engineered by the likes of the big 'O', Barney Frank and Chris Dodd among all the rest?

Apr 16 12:15 PM

[Pstoneki:]

Funny. I never think of taxation as theft. I figure it's the price we all pay for civilization. Without taxes I wouldn't have a meaningful job because I wouldn't have received any form of education. If I somehow had a job I would have a difficult time getting there with no roads. I could walk across the open countryside but, because there is no taxes and therefore no law enforcement, I could be robbed and killed by highwaymen. My job would probably be some menial labor because the public investment in stability and a financial system would not allow real companies to exist. I'd probably be speaking Japanese, German, or Russian since we would not have a military to protect us. I wouldn't have freedom of speech or religion because some warlord with a fanatical religious base would have stepped into the power vacume and taken over. I'd be lucky to have survived childhood because tax-funded basic medical research and care would never have happened. Starting to sound a lot like the tax-free haven of Somolia.

I could go on and on but that is enough for me. I'm glad I pay taxes. Heck - if I thought more taxes would get me up to the same standard of living that the Dutch, Germans, Swedes, or Norwegians enjoy, I'd pay that too. But that would be too much to hope for.


On Apr 15 11:47 PM John Polomny wrote:

> "If there's one thing about the tax system that I find particularly
> galling, however, it's the government's failure to raise revenues
> in ways that would also serve to improve social welfare -- by taxing
> "bads" instead of "goods."
>
> As Milton Freidman said many times to many world improvers and do
> gooders like this author, "Where are we going to find all of these
> angels to reorder society for us, I dont even trust myself to do
> that".
>
> This author is a statist that believes that it is possible to live
> for free off his neighbor. Taxation is theft. This is simple to understand
> in that people are threatened with violence if they do not pay. No
> difference between the government and a mugger on the street.

Apr 16 03:22 PM

[TCK:]

Government has increased involvement in most aspects of society over the last 40 years mainly to expand and experiment in social engineering High school grads lecture parents on global warming but can't make change for a dollar. The current education system produces an expanding crop of marching morons who can't answer basic civics questions. A new generation of dependency class is created, all willing to hand over their lives to politicians.

The most patriotic act for any individual is to pay as little tax as legally possible.

Apr 17 07:52 AM

[Pstoneki:]

"A new generation of dependency class is created, all willing to hand over their lives to politicians. "

I would agree. Hoever, that doesn't have anything to do with age, or generation. That has everything to do with mind set. If you are self motivated then you will do for yourself. If not, (and apparently most people in this country are in this bucket, given the support), you fall back on government. The Department of Homeland (in)Security is a case in point. Help! Protect us from every evil in the world! Take away our freedoms but make us safe!

That point has nothing to do with taxes. It has everything to do with a scared populace that is unwilling to stand up on it's own and say 'enough'.

Apr 17 08:53 AM