Tax Day Could Be a Breeze

Today is tax day, and like many readers, I have spent much of my free time over the last several weeks figuring out my various returns. Because both my wife and I have more than one source of income, our federal and state returns are quite complicated, and because we live in Pennsylvania—which apparently never learned the lesson of Antoine Lavoisier and therefore relies on private tax farmers to collect local taxes—I had to file an entirely additional return at the city level.

I find the whole experience almost indescribably unpleasant. It’s tedious, hyper-complicated, easy to make a costly error, and tends to reinforce the false Reaganite notion that “wealth is privately produced and then appropriated by a quasi-illegitimate state, through taxation,” to quote the economist Yanis Varoufakis.

More from Ryan Cooper

But it doesn’t have to be this way. Paying taxes can and should be easy, not least because Americans are going to have to do a lot more of it in the near future.

Some years ago, I traveled to the Faroe Islands, an autonomous territory of Denmark, to report on their tax authority, which is arguably the best in the world. There, all normal wages are routed through a central government database, which automatically keeps track of how much you are making, and what benefit programs you are eligible for.

While this computerized system is quite sophisticated and required a lot of initial investment, it is incredibly easy to operate. For an ordinary worker, what you owe automatically comes out of the paycheck, and any benefit payments automatically go right into your bank account. Ordinary employees don’t have to file their taxes or any enrollment paperwork (if they have a child and become eligible for the Faroese child allowance, for instance, the money just starts showing up), while employers don’t have to hire a payroll processor to handle their tax payments.

In America, by contrast, we have to file our taxes ourselves (or hire an accountant), and it’s a huge pain in the neck for individuals, businesses, and the IRS itself. And while taxes are much lower than in Nordic countries, that is more than counterbalanced by all the necessary expenses we have to fund out of pocket. I pay taxes for Medicare, Medicaid, CHIP, and so on, and then many thousands of dollars on top of that for my own insurance, thousands more for day care, and so on.

All this is why I find it maddening that so many Democrats, like Sens. Cory Booker of New Jersey and Chris Van Hollen of Maryland, California gubernatorial candidate Katie Porter, and Georgia gubernatorial candidate Keisha Lance Bottoms, have openly embraced the Reaganite frame by proposing various large tax cuts. We as a people can’t have nice things in large part because of this notion that taxes are a burden, and cutting them a “relief” check, rather than embracing one of the most important ways by which societies achieve collective goals. I, for one, would much rather pay for my son’s day care over my whole working life, rather than all at once when he is enrolled.

Moreover, thanks to repeated rounds of Republican tax cuts, the national debt is skyrocketing. Just President Trump’s Big Beautiful Bill alone will add about $3.4 trillion to the pile. And while heavy borrowing is all fine and good during a recession, the economy—at least for the moment—is near full employment. Worse still, the debt created by cutting taxes on the rich is largely bought up by the same rich people as an asset, who are then paid a large ongoing coupon for doing so. Inequality increases both coming and going.

So yes, filing your taxes in this country is an appalling waste of time. But it doesn’t have to be, and we don’t have to reach a Faroes standard of performance to see a huge improvement. The IRS had a free “Direct File” system going under President Biden that was popular; naturally, Trump—under pressure from the corrupt parasites at Intuit, who lobby to keep taxes complicated so people are forced to pay them to do it—abolished it. New York City has had free tax prep assistance for years for families making less than $97,000, and individuals making less than $68,000.

Direct File should be brought back. New York’s program could be copied and expanded all across the country. For a reach goal, the tax code could be radically simplified, with all the various tax subsidies administered more efficiently as welfare programs.

But as a general matter, Americans should demand much more from their taxes and their tax system. In government as in capitalism, you tend to get what you pay for.

The post Tax Day Could Be a Breeze appeared first on The American Prospect.