No one likes to file their tax return. The process is tedious and confusing – unless you hire someone to do it, in which case it’s expensive. And even when we outsource the misery in April, we still have to collect and organize tax-related documents all year long.
It’s a drag. And at least some commentators think it should stay that way.
Conservatives are the most ardent fans of making taxes painful. When he was governor of California, Ronald Reagan opposed a plan to simplify filing, arguing that “taxes should hurt.”
That attitude makes sense, if you think America needs a tax cut: Painful taxes are a good way to recruit allies. Which is one reason why conservatives – who should actually welcome the relative efficiency of broad-based, low-friction consumption taxes like a VAT – actually prefer less efficient alternatives like the old-fashioned, irritating personal income tax.
In a recent piece for Reason.com, Veronique de Rugy, a senior research fellow at the Mercatus Center at George Mason University, makes a solid conservative case for tax discomfort. Tax day, she points out, is “the one time during which many taxpayers are confronted with just how much of their earnings are captured by the government.”
De Rugy opposes efforts to minimize the misery of filing a return, specifically proposals that would require the IRS to send taxpayers a pre-filled return to double check and return to the agency. She’s also not a big fan of withholding, since it, too, tends to separate taxpayers from the actual process of paying their tax bills.
“We don't need taxpayers less involved in funding the government,“ de Rugy writes. “For those with the goal of shrinking government and reducing taxes, the aim should be the opposite: to make the costs of big government clearer to those who carry the burden of funding it.”
Actually, I think there’s a good case to be made that fans of big government should also be wary of making taxes less visible. For most of the last 40 years, liberals have been unwilling (or unable) to make a persuasive, straightforward case for adequate taxation. On the defensive since Reagan recast American politics in 1980, they’ve tried to build activist government on the sly, using tax expenditures or narrowly targeted tax hikes on the rich.
That’s fine, as long as you harbor narrow, Clintonian notions of what constitutes progressive government. But grander ambitions require broader, more visible forms of taxation.
If liberals want to build a new majority, they have to make the case not just for spending, but also for the taxes that pay for it. Failing to make that link does serious damage to the progressive cause, devaluing government and conceding a central conservative point: Big government is great, as long as someone else (or no one else) is paying for it.
To be fair, the liberal reticence regarding taxes has begun to change, thanks in no small part to Sen. Bernie Sanders, whose presidential campaign didn’t shrink from asking people to pay for new spending.
But Democrats still have a long way to go. Ringing calls for higher taxes on the rich are nice and all, but when divorced from any sort of fiscal sacrifice further down the economic ladder, they actually weaken the case for progressive government.
But what about the pain of the taxpaying process? Is our annual April misery a necessary part of progressive state building? I don’t think so. There are ways to preserve the visibility of taxpaying and still make the process a little less irritating, at least for many taxpayers.
In a great NPR feature this week, Stanford law professor Joe Bankman made the case – as he has for years – that pre-filled returns would be a godsend to taxpayers. Such returns would be low on misery but still offer taxpayers a snapshot of their fiscal citizenship.
Sure, that snapshot wouldn’t be as memorable without the hours of preparation misery that taxpayers now tolerate. But it would still offer taxpayers a chance to check over their fiscal contribution – and provide an incentive for them to look carefully, since real dollars would still be on the line.
In defending low-friction returns, Bankman makes an impassioned case rooted in the sort of fiscal citizenship that Democrats sorely need. His vision includes a vital element of reciprocity between the taxpayer and the state.
“Filing taxes is one of the most important interactions you’ve got with your government. How do you feel about government if [doing your taxes] makes you feel pissed?” he asks. “So changing that would affect the way we think about government and our joint undertakings. It would show that government cares about you.”
To my ear, that sounds like a recipe for progressive victory. Or at least the first ingredient.