Perhaps you will find it of small comfort Monday, especially if you’re straining to file taxes online or standing at the Post Office, but even 100 years ago newspapers were filled with stories about the income tax.
Perhaps misery loves company, even if that company is found on only a genealogy chart.
Among the biggest issues debated back then, in addition to all the many vagaries about what actually constituted income, was whether everyone’s return should be considered a public record.
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“Certainly, publish everything,” a New York Times editorial said. “All privacy is scandalous. These are the scriptural days when there is nothing covered which shall not be revealed and nothing hid that shall not be known. … Every man ought prove that he is or is not taxable.”
Once you get past the shock of reading scriptural references on the Times editorial page, you might be able to see some wisdom in that old argument.
Of course, the Internet wasn’t even a distant glimmer in Al Gore’s ancestors’ eyes in 1916. It’s one thing to know anyone can visit the IRS and look up a tax return; quite another to be able to sit on the train during your morning commute looking up your neighbors’ incomes and tax liabilities on your smart phone.
It would be like … well, like living in Norway, where people actually can do such a thing. Websites that offer search engines for this have become popular in that country.
An economics blog by Timothy Taylor, managing editor of the Journal of Economic Perspectives, cited a study of the Norwegian policy that calculated about a 3 percent increase in reported income in Norway because of the “shaming effect” of public disclosure.
I’m not much for public shaming, but there may be other benefits to this idea. Maybe if we could see everyone’s returns, the complexity and unfairness of the system would be so apparent we would clamor for real reform.
Your tax returns may be due Monday, but if you were to take your entire yearly tax liability — federal, state and local — and do nothing but pay all your earnings toward it beginning Jan. 1, it would take longer than April 18 for you to pay it all.
The Tax Foundation, a Washington-based research group, calculates “Tax Freedom Day” every year, based on this notion. This year, national freedom day is April 24th. If you add in the federal deficit, it’s May 10th. Because each state is different, Utah’s freedom date is April 21st. To keep things in perspective, in 1916 it was Jan. 24.
What has changed? Certainly, government provides a lot of necessary infrastructure and oversight today that many people recognize as important. But, as the Tax Foundation notes, Americans now spend more collectively on taxes than on food, clothing, and housing combined.
Way back in 1898, President Benjamin Harrison said, “Each citizen has a personal interest, a pecuniary interest in the tax return of his neighbor. We are members of a great partnership, and it is the right of each to know what every other member is contributing to the partnership and what he is taking from it.”
That last part, about knowing what people are “taking from it,” could tell us a lot about tax fairness at both ends of the income scale.
OK, now for the reality check. Few agencies on earth know more about our lives than the IRS. It would be foolish, in an age of rampant identity theft, to make everything we put on our returns public.
In 1934, Congress toyed with the idea of making everyone file a “pink slip” with their returns that included only gross and net income, deductions and taxes paid, with the intent of making this public. But lawmakers soon abandoned the plan for fear it would provide a virtual roadmap for kidnappers and thieves.
Criminals ruin a lot of good ideas and take the air out of many sound philosophies.
My guess is most people wouldn’t stand for making incomes and taxes public. Still, it may be nice to dream about shedding light on everyone else if you’re crunching numbers tomorrow.