Tax Reality

Today is income tax day. There will be more than 750 tea parties around the country. But the Center for Budget and Policy Priorities (I am not always a fan of their stuff) published a graph (which is actually from the Tax Policy Center) using Treasury data which shows the tax burden for median income families. A couple of comments are in order. First, notice that the highest burden was in the late 1970s. Second, there has been a lot of work in the Congress on equity issues and those policies seem to have reduced the burden on median income families significantly. Third, a comparable chart for those below the median would have an even more significant drop. We now have a large number of "taxpayers" who do not pay federal income taxes. In my mind the closest analogy to that was in the very early years of the income tax where the threshold for taxes was high - excluding most citizens.

By the way, the tax compliance cost to us all (how much it costs for us to file our taxes) has been estimated by Joel Slemrod at a cool $85 billion.