The question of whether it should be easy or hard for people to pay their taxes is, to an extent most people don’t realize, an ideological one. Dating back to John Stuart Mill’s 1848 Principles of Political Economy, there has been an understanding that a less visible tax system may have a tendency to fuel the growth of government. The less the goose feels the plucking, after all, the more feathers the pluckers can collect.Government officials know this quite well. In 1942, discussing proposed changes to how the federal government collected taxes at a Senate hearing, treasury official Randolph Paul wondered aloud, regarding income tax withholding, whether “if we cut down the squawking under this method we could raise the individual tax rates?” Withholding was instituted, the squawking was cut down, and taxes indeed have risen as a share of GDP.The article even describes how toll booths that collect fees easier collect more fees. The more painful paying taxes is, the more we are willing to pay. There is even a good argument for moving election day closer to tax day; since it's currently as far away as it can get.
Sunday, March 21, 2010
Good Thing Paying Taxes is a Pain
I just got done filing my taxes for the year. It was more painful than I remember. Apparently, that's not a bad thing:
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Maybe its good to make paying taxes more difficult, but it's not exactly cost efficient. I find it interesting the the online programs available for filing taxes online also lobby congress to keep the process more difficult so that they have business. http://www.nytimes.com/2010/01/24/business/24digi.html
ReplyDeleteGood point Cheryl. I wonder where the line is for most inefficient, taxes or the pain those taxes create.
ReplyDeleteI think you're the first libertarian I've met who loves the complexity of the tax code.
ReplyDeleteLoves? Probably not. Appreciates the silver lining, yes.
ReplyDeleteThis is exactly why I think a move away from income tax would be good. Because a lot of taxes are capitalized in the price of goods, poor people often think they don't pay taxes when that is not really the case. Consequentially, they think they're getting a better deal from government than they really are.
ReplyDeleteI recently blogged about this here: http://rick-weber.com/blog/2010/07/a-tax-reform-proposal/
Good point Rick. But I wonder what type of taxes might be the most obvious (without being too wasteful to pay). Maybe a sales tax?
ReplyDeleteI'll be sure to check out your blog.