Americans Don’t Hate Taxes, They Hate Paying Taxes

Abstract:     
This Article recommends reforming the way Americans pay taxes with a plan that eases the burden for taxpayers and paid preparers, and communicates with taxpayer-citizens in a more responsive, dialogic fashion. By leveraging technology and exploiting the government’s core competency for maximizing efficiencies in filing taxes, the plan slashes costs (monetary as well as psychological), and offers a consumer friendly, secure, and educational tax-filing portal.

The proposed “data retrieval” platform allows taxpayers and preparers to view, access, and download tax information from a secure database maintained by the government. Rather than having to gather this information from employers, financial institutions, and third parties, taxpayers and their advisors rely on a centralized clearinghouse. Taxpayers with sophisticated returns may still need to input certain information, such as charitable contributions and some capital gains, but data retrieval can simplify filing for all 145 million taxpayers. It also offers an opportunity to communicate with taxpayers and preparers, listen to concerns, meet needs, and improve the system through a dialogue that enhances fiscal literacy and tax consciousness.

Finally, the government - not the private sector - is uniquely positioned to lead this reform. Data retrieval leverages the government’s competitive advantage and core competency in the area of tax filing. Under current taxpayer confidentiality laws, the private sector is prohibited from providing a comparable service for maintaining and updating a centralized database that contains sensitive tax account information. Only the government can bring these efficiencies to the filing process, and ease the filing burden for all taxpayers and their advisors.

Number of Pages in PDF File: 56

Accepted Paper Series