The bad reason: Lobbying by intuit and parties to prevent easy tax preparation. Their ROI on regulatory capture is very very good.
That’s only a good reason if you’re opposed to the actual programs and/or outcomes. If you favor those programs and outcomes, making people “painfully aware” of their cost almost certainly undermines them. Which...
> The bad reason: Lobbying by intuit and parties to prevent easy tax preparation. Their ROI on regulatory capture is very very good.
Tax prep companies certainly don’t have this kind of power, and only one of the parties has that platform. That’s who’s invested in making taxation feel painful. Not just in terms of awareness but in policy too.
You'd be surprised.
Most of the people that philosophically opposed to easy taxes, are philosophically opposed to taxes in general and by extension most of the programs the taxes fund.
I am one of those people, doubly so for income based taxation which IMO is unethical. I prefer a Henry George Style single tax system for public finance but that is beyond the scope of this thread
Not at all. I support bigger government providing more services. I’d happily pay a lot more taxes. But I also support forcing people to grapple with the cost of government once a year. They should be making the informed decision to pay more or less taxes, not acquiescing to it merely because the government automatically takes their money and makes it so they never have to think about how much.
My brother in law, who is 20 and just starting to have to pay taxes, called my wife and I to complain. It’s an easy form for him to fill out, but he had to write a check because his employers didn’t withhold enough. I felt like it was an excellent learning experience.
But that's one-sided: people do not have the same requirement to "grapple" with the benefits of government once a year. That feeds right into known cognitive biases, where we underweight small but steady effects and overweight concentrated effects.
If you had a "yearly day of reckoning" with your partner where you re-hashed every argument, fight, or disagreement from the previous year without commensurate attention to the benefits, I daresay it would not be good for your relationship.
Moreover, this approach doesn't even seem to be effective at instruction. In particular, many people don't seem to understand the difference between marginal and average tax rates (link: https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5724773/), which is a precondition for understanding the system as a whole.
Presumably you experience that every day. Moreover, politicians spend tons of time talking about those benefits.
That’s the kind of thing that becomes invisible when contrasted with a major personal economic event.
The current system feels more calibrated so that people have a negative association with the IRS, rather than being well-informed about how much they're paying.
Your argument seems to be that if you pay more taxes, then you get good programs and services.
In a similar vein, you should give your kid lots of lunch money to take to school, because he would have a more nutritious lunch. :)
One thing that confounds me is how do taxes tend to increase as a percentage (and will it only end because of mathematical limitations like the laffer curve?)
In reality, people are painfully aware of how annoying filing taxes is and hopeful that they will get some money back later. The system is so convoluted, most people pay someone else to take care of it for them. Not to mention, most people barely understand what's happening when they are filing their taxes.
Having the filing process be complicated or tedious doesn't really do much to give people a more accurate perspective on the financial burden of taxation to them. If you could get your tax forms filled out automatically in 10 seconds but the result was "you have to send the IRS a check for $10,000", that would have a far greater awareness-building effect than having to spend 4-6 hours dealing with forms and paperwork only to conclude that "you don't owe any taxes" (because the money was already withheld as you earned it over the course of the year).
Of course, this change would also cause a lot of hardship because quite a lot of people would find it difficult, for various reasons, to save up money to pay taxes if they weren't having someone else do it for them automatically. And I'd expect that this hardship would probably lead more in the direction of political pressure to reinstitute W-2 deductions rather than pressure to reduce or eliminate income taxes.
Having worked on W-2 (salary with automatic deduction from each paycheck) for my whole life until last year, when I switched to 1099 (making quarterly estimated tax payments and sending the tax authorities a check), I really had the "wow, I never quite noticed how much I was paying in taxes before!" experience.
[1] Note that the Norwegian tax system is progressive, so median wage earners don't pay as much as that.
I listened to a couple of episodes of Planet Money a while back that others might find relevant. They address how some state / local governments raise money in regions where opposition to taxes is high.
The Liberty City (https://www.npr.org/2019/10/18/771371881/episode-945-the-lib...)
Fine and Punishment (https://www.npr.org/2021/02/12/967260423/planet-money-fine-a...)
Essentially, the subjects of each episode use the justice system to raise funds from speeding tickets, court / prison fees, etc.
They do allow installments the following year, so you can replicate the monthly deductions, but it’s plainly apparent how much you’re paying since you need to pay it separately each month.