Economics

One Good Reason to Keep Income Tax Returns as Totally Freaking Annoying as Possible.

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Over at the Wall Street Journal, Reason alum Ryan Sager writes about the connection between ease-of-payment and increased levels of taxation.

If our priority is to experience as little pain from taxes as possible, we could go down the road California is on with its ReadyReturn program, available to people with income only from wages and only one employer. From the 60,000 people who used it to file prefilled returns in the 2008 tax year, it got Saddam Hussein levels of support: 99% said they'd use it again.

If our goal is to hold onto a little more of our money, though, remember: Swearing's been shown to alleviate pain. So, bear down, swear away, and don't get plucked any more than absolutely necessary.

Whole thing, which summarizes research on the matter, here.

Reason.tv flashback as April 15 approacheth like a Leviathan waking hungry from a long slumber (if sea monsters do in fact sleep), take a coupla minutes to remember some "tax facts to make your head explode":

NEXT: Reason.tv: Advice Goddess Amy Alkon Wants to Beat Manners Into Rude People

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  1. Props on rockin’ Battles.

  2. Everyone knows sea monsters spend aeons sleeping, waking only when the stars align to devour the feeble minds of men.

  3. Everyone knows sea monsters spend aeons sleeping, waking only when the stars align to devour the feeble minds of men.

  4. The toll data is true, but also remember that tolls are designed to reduce congestion by increasing the cost to travel. If you eliminate part of the pain of traveling, the time of slowing down and paying the toll and having to hunt for change, then the implicit cost of the toll has decreased.

    It only makes sense that the explicit charge would increase. Without it, traffic would become more congested.

  5. That’s the dumbest argument ever. Does this mean that the flat tax with no deductions is a bad idea because it’s easy and harder to evade?

  6. “It’s time to be patriotic.”

    Change Election Day to April 16.

    1. If newspapers were worth anything, they’d print “The Top Fifty Things Your Government Did to Fuck You This Year” immediately before elections. For each level of government, of course.

    2. If I were God-King for a day, one of the few changes I would make would be to have tax day be the day before election day.

      Another would be to do away with withholding altogether, so everybody would have to write a big check right before they voted.

      1. I especially agree with your last statement. I think if people actually had to pay the taxes, instead of them mysteriously disappearing between their pay stub and pay check, they’d be a lot more cognizant of just how much they’re paying.

        1. I too am sick of the morons who act like the government is giving them $2000 or whatever when they get their refund checks back, but the reality is that if we didn’t have withholding, those same idiots wouldn’t be able to pay their taxes when they were due because they would have spent all their wages.

          1. Which would make them tax rebels.

          2. What’s your point? I thought it was only the statists who thought citizens were stupid & we know better than them.

            Besides – anybody that stupid would probably be getting a “credit” under our current policy.

      2. If I was God-King for a day, those fucks would be in so much trouble…

  7. Good theory, but shown to fail in pracatice.

    If making taxes annoying somehow made them go away, why aren’t we in a tax-free world now? Expensive is bad enough, but U.S. tax law is expensive AND insanely complicated, but annoying as well.

    Actually, complexity makes it worse, because it makes those who find ways to game complexity dogged supporters of the system.

  8. Honestly, complicated tax regimes employ IRS workers and H&R Block, both loathsome entities that the world would be better (and richer!) without.

    1. This is correct. The more complicated it is, the more likely you are to outsource to a professional. How many of us represent ourselves in court? We have so many sharks lawyers because of the complexity of the law. The same would go for accountants, and already partly does.

      1. I’ve wondered how much money would be saved if we eliminated or dramatically simplified income taxes–both individual and corporate. $50 billion a year? That’s probably too conservative. All the affected lawyers and accountants could shift into other specialties–they’re mostly smart people.

        1. It would be huge. The amount of productive time saved alone would just be staggering. Then there are all the costs of compliance, processing the returns, etc.

          1. You’re right–$100 billion.

        2. It’s not like the $50 million (or whatever the amount is) just vanishes from the economy. True, there would be some efficiency gains by having accountants and such working at more necessary jobs, but those gains wouldn’t be worth the full amount you posit.

          1. It’s not like the $50 million (or whatever the amount is) just vanishes from the economy. True, there would be some efficiency gains by having accountants and such working at more necessary jobs, but those gains wouldn’t be worth the full amount you posit.

            Well, look who’s in favor of Keynesian stimulus packages and multipliers now!

            If it’s a wholly unnecessary task, then it vanishes from the economy. Any sort of multiplier effect would be obtained by doing something else, plus we’d have $50 million of useful stuff.

          2. I should clarify my meaning. It’s not an extra anything. It’s shifting money from paper pushers to others. Given the scale, I think that money would be better invested in more productive activities.

            Now an even better move would be to dramatically reduce the amount of money the government could spend or the debt it could incur.

  9. Get rid of withholding and move “April 15th” to the 1st of November. Everything else is boiling the frog solely.

    And I don’t care about Milton Friedman, so don’t bring him up. If the government was properly limited then it wouldn’t be collecting income taxes in the first pace, rendering withholding moot. Making a bad system more efficient only makes it a worse system.

    1. Slowly. I need a drink.

    2. I love boiled frog esp with a nice chianti & some fava beans slurrp

  10. If I were God-King for a day, one of the few changes I would make would be to have tax day be the day before election day.

    Another would be to do away with withholding altogether, so everybody would have to write a big check right before they voted.

    I’ve used these exact same phrases in conversation sooo many times, dude. GET OUT OF MY BRAIN

  11. No other subject gets my blood boiling faster than tax withholding. Making it “easy” is the whole point – it’s insidious and by design.

    1.) People don’t know how much they’re paying (or at least get used to the pain and don’t even realie that what they’re missing); and

    2.) Politicians are less accountable and less responsible because the money is going to be there no matter what they decide to do with it.

    The devious nature of tax withholding is the is the entire reason why Congress instructs the IRS to try and classify as many people as possible as W2 employees – if they’re employees they’re subject to withholding and that makes life easier for Congress and the IRS.

    It turns the whole process on its head by putting the burden of proof on the worker to try and get his money back – interest free – once a year, rather than requiring the government to justify why it needs to spend as much as it wants to spend.

    Making people write checks – monthly, quarterly, annually – is the only way to fix this. Don’t believe big brother apologists who say that withholding is the only way the government can function on a day to day basis, either. Plenty of businesses have to manage cash flow uncertainties, too, and it’s a lot harder and more expensive for them to borrow short term than it is for the federal government.

    If you want to see the root of big government evil and its voracious growth, the “painless” withholding system is it.

  12. This seems like a good place to mention that I heard on the news this morning that states are going to try to keep our money longer so they can squeeze every drop of interest out of it….

  13. I was unaware of the underpayment penalty until this year because I filled out my W4 last year answering all questions honestly and then noticed an underpayment penalty on my turbo tax. What the fuck?! I am still paying my taxes by 4/15. It shouldn’t matter that I make scheduled withholding payments. This is why motherfuckers fly planes into IRS buildings. First they rape you, then they make you pay for it. Isn’t it fucking voluntary, Joe?!

  14. “Does this mean that the flat tax with no deductions is a bad idea because it’s easy and harder to evade?”

    Yes, at least if you’re basically anti-government (hence not interested in making government work better).

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