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    Why Taxes Are Annoying

    Fri, 04/15/2011 - 12:17 EDT - Mathew Yglesias
    • Comments
    • taxes
    • uncat

    I’m paying my taxes today, and it’s always worth making the point that the process doesn’t need to be nearly as annoying as it is.
    A very large share of the public has no income that hasn’t already been reported to the IRS by the payer and doesn’t itemize deductions. Under the circumstances, the sensible thing would be for the IRS to send everyone a sheet of paper that says “based on the income that’s been reported to us and your family status from last year, your taxes owed (or refund owed to you) is $X with standard deductions. If something’s changed, or if that income number is wrong, or if you want to itemize deductions, you should fill out forms blah blah blah. Otherwise, just send a check.” A lot of us would still need to wrestle with the forms and nobody likes to give up money, but this would be much more convenient for millions of people. We don’t do it because H&R Block and TurboTax don’t want to lose customers and, crucially, because the conservative movement wants taxes for ordinary people to be as annoying as possible. Rich people don’t care about this kind of simplification because they itemize their deductions and hire accountants. But they benefit from middle class people resenting the tax process because it helps them build the case for low tax rates.
    Speaking of tax rates, political entrepreneurs on the right will often try to convince you that reducing the progressivity of the tax code will somehow simplify the process. This is a nonsensical lie. The part of the process where you go from taxable income to taxes owed is quite simply notwithstanding the stepwise brackets. Indeed, in the age of cheap computing power there’s no reason the brackets couldn’t be replaced by infinitesimal increments. What’s complicated is the definition of taxable income, thanks to our predilection for adding deductions to the code and thank to the unfortunate habit of conducting too much social policy via tax credits instead of straightforward agency spending.


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