When the Tax System Makes Kids Dumber

When the Tax System Makes Kids Dumber

Why you should care

Because now there’s another reason to complain about the tax system.

Think your taxes are too complicated? Join the club. The frustration bubbled up to candidates on the presidential stage this year. Ted Cruz promised to make taxes simple enough to fill out on a postcard. Rand Paul had a simpler solution: Take a chainsaw to the tax code. And here’s another reason to hate government’s grossly complex revenue-churning machine:

Complex property tax laws in Oregon have been shown to lower math scores by 5 percent.

That was the finding of a study by University of Oregon economics students, who discovered that local school districts saw a drop in 8th-grade math scores in the first year of budget cycles that included tax compression — a local property tax system so labyrinthine that principals can’t predict how much funding they’ll receive, and often get less than they expected, disrupting planning, teacher assignments and high school prep. “It makes it very difficult for school districts to plan,” says coauthor Joe Stone, professor emeritus, who supervised the research. What starts out arcane and abstract winds up with results as concrete as a sad kid with a bad report card.

It’s not just teachers getting snookered, and even if you don’t live in the Beaver State, you have every reason to gripe about the financial roulette of tax season. Americans face almost $1 trillion in hidden tax-compliance costs each year, says Jason Fichtner, a senior research fellow at George Mason University — that’s about $3,125 out of the average person’s wallet. And if you consider that time is money, the cost is even higher, to the tune of six billion hours spent complying with the IRS in 2011 (for the same price, the national workforce could have added another 3.4 million jobs). That time has a monetary cost, Fichtner says. “The main thing I hear from people who aren’t tax economists: ‘Well, isn’t the whole goal to raise money for government to fund the benefits and institutions we support and enjoy?’ ” He says the answer is yes — but couldn’t it happen more simply?

As is the case with any research, there are coulda-woulda-shouldas. The Oregon study used state school data from 2006 to 2012, which only represented three budget cycles, and Stone would have liked more data. Given more time, his students could have quantified how budget uncertainty affected a school district’s scores throughout the year. It would have been much better to have a full decade of data, Stone says, but the spirit of the study holds true: “You have a complex tax system and a state education-financing system that’s quite complex, and those two are interacting in complex ways.” Again, put more simply: It might be time to start revving up the paper shredder.

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