Wednesday, April 15th marks the last day Americans can file federal income taxes without an extension. Some overachievers file taxes well in advance of the date, but for many it's a contest that goes right down to the wire.
Recently Last Week Tonight host John Oliver discussed the annual US ritual. (Clip contains explicit language.)
Oliver hoped to convince viewers the IRS isn't all bad. In fact, Oliver pointed out its employees are beleaguered this time of year because the agency has lost nearly 20 percent of its funding in recent years.
The IRS does a difficult, thankless, almost dangerously boring job, and that job has actually been getting even more difficult. [...] You can't lose nearly 20 percent of what you are and be as effective. It's like pretending Zayn leaving One Direction doesn't tear the heart out of that band. He was 20 percent of that band, but he was 99 percent of the soul.
While Oliver was joking, he did highlight real problems with the agency. Low funding levels have been compounded by staff cuts to create massive workloads for agents who are still carrying out normal, day-to-day duties.
The other side of the coin is that Americans take a relatively dim view of the organization. Any entity that annually seizes money from its citizenry is bound to be unpopular. Michael Norton, a professor of business administration at Harvard University, said this is a distinctly American phenomenon.
"Everyone in every country hates taxes. Nobody really likes to give up their money, but it turns out Americans really seem to hate taxes quite a bit, even more than people in other countries," Norton said Tuesday on Boston Public Radio.
Norton said US taxpayers feel cut off ("decoupled") from the ways the government uses tax revenue. Most people want to see immediate results — purchases, improvements, debt payments — but the use of tax dollars is an opaque process. The other reason for our tax phobia is control.
"People hate this idea that they don't have any control over the taxes," Norton said. "I can't choose my tax rate, and that really bothers me. We really like to have choice and agency with what we do with our money."
In 2013, Norton and co-author Elizabeth Dunn conducted research around taxes and reached some surprising conclusions. Norton and Dunn found that in countries with comparatively high income tax rates, people were surprisingly happier. They wrote in the New York Times:
Countries that have the happiest citizens tend to tax the rich more heavily. In a study of more than 50 countries, those with more progressive tax rates had happier citizens on average, even when controlling for overall wealth. The United States does not have a particularly progressive tax system.
Armed with that knowledge, Norton and Dunn concluded that a few simple changes would improve morale. They recommended giving people a choice in how their tax dollars were spent — whether a certain percentage went to defense, to the National Endowment for the Arts, or other places.
They also recommended doing what the city of Boston chose to do during the terrible 2014-2015 winter: maintain a site where citizen taxpayers can track the progress of work like plowing and snow removal.
There's no magic switch to flip to make tax-paying fun. But maybe, in the near future, Americans can make peace with the annual process.