Why you should care
Because you could do your civic duty better next year.
Hey, have you done your taxes yet? We did ours! Woo-hoo! Good for us!
Now, we’re not certain we did them correctly — frankly, we’re still a bit confused about withholding on our W-2s — but we’re not going to worry about it for now because TurboTax tells us we are a very low audit risk. Plus we found ourselves writing a rather large check to the state of New York for a reason that remains obscure to us, so we figure we’ve fulfilled our civic duty for 2014.
In retrospect, though, we wonder why we so dreaded today’s tax deadline. Like most knee-jerk liberals, we are all for taxes. We like strong schools, decent sidewalks and an effective social welfare net. Theoretically, taxes should be a responsibility to take pride in. Why on earth are they such a pain?
Maybe next year we’ll take a different tack — filing our 1040s with a bunch of friends and a few bottles of wine. In Partying Like It’s Tax Time, Ashley Tate takes a look at the growing phenomenon of tax parties, in which friends gather at a house to do their taxes together. It lessens the physical pain of the cruelest month, they say, to be surrounded by nears and dears while you perform your civic business. Even professional tax preparers are getting in on the action, adding house calls to their list of services. Read more here.
Earlier this year, OZY’s Tracy Moran looked at one of the reasons we have income tax in the first place: Because states have tried all sorts of other methods to extract support from their citizens, to little avail. In Blame Dodgy Europeans for Your Tax Bill, Moran documents some of the crazier tax avoidance strategies employed by citizens through the ages, ranging from Lady Godiva’s nudity to reducing the number of windows in your house (to avoid Britain’s dreaded “window tax”). Our favorite technique: The residents of Alberobello, a town in southeastern Italy, built collapsible houses to avoid paying property tax.
Of course, tax avoidance leads to all sorts of problems, especially on the corporate level. A while back, OZY’s Pooja Bhatia wrote about a growing human rights movement against tax avoidance — the idea being that if multinational corporations just paid taxes in the developing world markets where they did business, they might help reduce poverty. More recently, and taking a somewhat different tack, OZY’s Steve Butler laid out the arguments for abolishing the corporate income tax. It’s a tax that has precipitated a slew of unintended consequences, he argues, including that it ends up hurting workers instead of shareholders. Read more here. And here.
We digress — back to the individual income tax. In Get Rid of Income Taxes, Butler makes a fine argument that the income tax isn’t working, either. If we moved toward a neutral tax system — one that didn’t try to incentivize homeownership, say — the results would be fairer and lead to more government revenue. In such a world, he notes, we could also “save hundreds of billions on tax preparation costs because — here’s the grand prize — we could just do away with individual tax filings. Sorry, H&R Block!” Sorry tax parties, too. Read more here.