The voices of Tax Policy Center's researchers and staff
We spent the better part of a beautiful, sunny weekend working on our taxes. We were among friends, if social media offers any indication: So many Facebook posts, so many sad or angry emojis expressing resignation or frustration.
If Facebook could define our relationship status with taxes, it'd be much like the revenue code itself: “It's complicated.” It might even be “bad.” The tax code's complexity and lack of transparency can confuse taxpayers and make them feel helpless, angry, or worse, victimized.
If the tax code were a friend’s significant other, I'd recommend a break-up. But, we Americans are, in spite of our rocky relationship, proud to pay our taxes. And the tax code may be going through a sort of mid-life crisis given all the current talk of tax reform. How can we make this ever-changing relationship work?
Maybe we can adjust our expectations. We may never love the tax code, but maybe we could learn a bit more about it. I invite you, average taxpayer, to consider a study guide (with useful links), inspired in no small part by lessons in How to Win Friends and Influence People by Dale Carnegie.
If you think you have it bad, imagine—and appreciate—the IRS. According to the National Taxpayer Advocate, Congress has made more than 5,900 changes to the code since 2001, essentially more than one change a day. And the agency had to administer those revisions with 27 percent fewer full-time staff than it had in 1995. TPC’s Eric Toder explains that there’s plenty of room for the IRS to improve—assuming Congress commits necessary resources. Will it? TPC’s Howard Gleckman notes that President Trump wants to cut the agency’s budget by another 2 percent this year.
Avoid condemning the impact of the income tax code with incomplete information. Remember back in 2012, when presidential candidate Mitt Romney stated that “47 percent pay no federal income taxes?” TPC’s Bill Gale and Donald Marron wrote a myth-busting paper to counter the impression that tax breaks and loopholes allowed people to shirk their taxpaying duties. As you can see in the 2016 update on the issue by TPC’s Bob Williams, reality remains… complicated.
Be empathetic: It could change how we feel. According to the latest study by TPC’s Vanessa Williamson with Vox, if we think about the taxes that other people pay, we might end up feeling differently about the amount of taxes we pay. The study raises many questions worthy of further research, and they’ll be explored this week.
Acknowledge our own weaknesses. My colleague Howard Gleckman said something about Vanessa’s findings that should raise an alarm among average taxpayers. “People’s views about the tax code can be manipulated by presenting them with ‘facts,’ whether real or alternative.” Indeed, framing—or the words policymakers use to describe tax policies or changes—matters. A lot. There’s a reason the proponents of estate tax repeal marketed the levy as a “death tax” instead of an "anti-dynasty tax."
Encourage the tax code to talk about itself (through the work of TPC researchers). I might be a little biased, but this one’s important. Some big changes, whether comprehensive tax reform or tax cuts, may become reality in the not too distant future. Do we want to remain confused, angry, or vulnerable? Before you answer, just know that we don’t have to be. Start with the basics: Here’s a citizen’s guide to the fascinating elements of our tax system. And if you’re intrigued: These TPC briefs, part of an ongoing series on key tax policy issues, will help you navigate the current tax reform debate.
- How federal income tax rates work, by Richard Auxier
- What are itemized deductions? by Chenxi Lu
- Refundable Credits: The Earned Income Tax Credit and the Child Tax Credit, by Elaine Maag
- Capital Gains, by Robert McClelland
- Repeal of the State and Local Tax Deduction, by Frank Sammartino
- Affordable Care Act Taxes, by Gordon Mermin
- What is the Difference Between Corporate Income Tax and the Destination-Based Cash Flow Tax? by Eric Toder
Tax Day is almost here. Don’t get mad. Get curious.
The Tax Hound, publishing the first Wednesday of every month, helps make sense of tax policy for those outside the tax world and connects tax issues to everyday concerns.
Posts and comments are solely the opinion of the author and not that of the Tax Policy Center, Urban Institute, or Brookings Institution.
There was a steady stream of post office customers dropping off mail including their tax forms at the Pembroke Pines, Fla., Tuesday, April 15, 2014. The post office placed signs on the mail boxes to inform patrons about times. (AP Photo/J Pat Carter)