Wednesday, April 16, 2008

Hatred of the IRS and Taxes

Stan Collender posits that Republicans resist efforts to modernize the IRS because an awful tax-paying experience leads people to favor tax cuts:

Few Republicans in general (and expecially the Bush White House) want to do anything that will make the tax paying experience easier, simpler, and more pleasurable because IRS is more efficient. The result of all of the issues mentioned above is that paying taxes is more difficult, time-consuming, and infuriating. That decreases support for paying taxes and increases the likelihood that tax cuts will be seen by a larger group of people as preferable.
I don't think that's right. People still have to pay taxes after a tax cut. You obviously have to pay less in taxes after your taxes are cut, but you still have to go through the experience of paying taxes. One might argue that a tax cut reduces the time you have to spend paying taxes, but I'm not sure this argument holds water. The only real effect that a reduction in the income tax has on the tax-paying experience is to shuffle around the numbers on the IRS forms. It doesn't change your exposure to the tax-paying experience. Moreover, if people invest the extra money they gain from a tax cut, or use the extra money in any way that requires them to fill out additional IRS forms, then the tax cut will have actually increased their exposure to the tax-paying experience. I don't doubt that some people irrationally believe "lower taxes" means "less time spent paying taxes." But most people have gone through the tax-paying experience enough times to know better. Of course, there's always the possibility that it's the politicians opposing IRS modernization who irrationally believe that "lower taxes" equals "less time spent paying taxes." But that's a different story.


Anonymous said...

I'm not convinced. It seems like a pretty good idea to cause people to associate taxes with an all around awful experience if your party is identified with the crusade against paying them.

Compare it to the use of chips in casinos. Gamblers wager more because the experience of wagering is almost unnoticeable.