Theory: Simplify the Tax Code and You’ll Wind Up Paying More in Taxes

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The idea is that it’s actually good for taxpayers to be frustrated with how absurdly complicated it is to do their taxes. Why? Supposedly because that anger is channeled into efforts to curb government spending.

Here’s the gist of the argument, presented by Casey Mulligan in the NY Times’ Economix blog:

Millions of Americans are spending hours of their time this week completing their personal income tax returns. Economists believe a simpler tax code would eliminate such burdens, not to mention the burdens to the economy created by various kinds of tax-sheltering behavior that would make little economic sense with a simpler tax code.

But it’s easy to overlook an important side effect of tax complexity burdens — and the taxpayer anger created by them. Such aggravation helps sustain the sizable and energetic group of Americans who want their government to get by with less.

The theory isn’t exactly convincing, based on some of the comments, like:

Truly a bizarre argument, and one that is not convincing at all. The key feature of the federal income tax that makes taxpayers aware of it, and angry about it, is that they are obliged, once a year, to tote up the amount of tax they are paying. In contrast, Social Security and Medicare taxes are collected (for most taxpayers) out of every paycheck, and play almost no role in the annual tax calculation, and are also directly connected to a specific end that most Americans value — old age income and health security.

Even if Mulligan’s argument does identify real incremental aggravation created by the byzantine Federal tax code, the conclusion that such aggravation should be welcomed because it makes taxpayers more willing to resist increases in the overall tax rate is equally perverse.


This argument makes absolutely no sense. For one thing, there are a host of reasons why people could object to the income tax, and ‘they’re just too complex’ wouldn’t be the first on my list.


Is this even for real?