Tax Day Roundup
Some of my favorite Tax Day reads.
Happy Tax Day to those who celebrate!
As someone who does tax policy for a living, I often find myself explaining to people why I find the topic so engaging. Sometimes I slip and say: I love taxes! It’s actually the intersection of taxes with just about every policy area and economic sector that I love—there’s just always something new to learn. Paying taxes, on the other hand, I hate.
In the spirit of April 15, my annual update of “five charts for Tax Day” is here. I cover where revenue comes from, who pays and how much, and why the US’s relatively low tax burden compared to Europe is not sustainable without meaningful spending restraint. Cutting spending is the only way out of this mess.
I’m also on the newest episode of the Cato Podcast, talking taxes with Chris Edwards.
Here are a few of my favorite Tax Day reads from this season:
America’s Other Tax Day is April 16th
Jared Walczak, Tax Foundation (Subscribe to his Substack, The SALT Road)
Walczak reminds us that collectively, Americans work 106 days just to pay our total tax bill across all levels of government. That puts “Tax Freedom Day” on April 16—just one day after Tax Day this year. It’s mostly a coincidence that the days are back-to-back, but starting tomorrow, you’ll be working for yourself again rather than the government.
Correcting the Top 10 Tax Myths
Jessica Riedl, Brookings Institution
Riedl updates her 2024 piece with Freakonomics, dispelling persistent misconceptions in tax policy:
Tax cuts pay for themselves
Tax cuts will starve the beast
The middle class pays higher tax rates than the rich
Those old 91% tax rates raised large revenues
Europe raises more revenue by taxing the rich more
Tax cuts for the rich drive deficits
Taxing millionaires and corporations can eliminate the deficit
Most of the 2017 tax cuts went to corporations and the wealthy
Repealing all post-1980 tax cuts would painlessly reduce deficits
US corporate taxes are far below international norms
Simplifying the Tax Code Is a Pro-Growth Policy
Jack Salmon, Mercatus Center
Salmon estimates that tax compliance costs total roughly $546 billion annually (nearly 2 percent of GDP). That’s more than just paperwork. It’s time, legal complexity, and economic manipulation. These costs are a symptom of deeper structural flaws in the tax code that would be fixed if Congress pursued true structural tax reform.
Bitcoin Taxes Make No Sense
Nicholas Anthony, Cato Institute
We’ve established that the tax code is complicated. One small corner of that complexity is the taxation of cryptocurrencies. Anthony shares his tax return, noting that it runs more than 70 pages long because he’s required by the IRS to detail a capital gain and loss for every one of his Bitcoin transactions.
Think April 15 Is the Deadline? Maybe Not.
Joe Bishop-Henchman, National Taxpayers Union Foundation
A reminder that the tax code isn’t just complex, it’s occasionally absurd. Electronic payments must be scheduled by 8 p.m. ET on April 14 to count as timely (hope no one is waiting until the last minute to hit send on that tax payment!). A check mailed on April 15 (and arriving days later) still qualifies. “This is outdated and dumb.”
What the IRS Data Is Showing This Filing Season
Erica York, Tax Foundation
Early IRS data show average refunds are up almost 11 percent year-over-year, reaching $3,571, or $350 dollars more than last year. Much of this increase reflects changes from the One Big Beautiful Bill Act. But remember, bigger refunds are not a gift! It’s the government returning the hard-earned money they over-collected from you throughout the year. And they return it without interest.
US Tax Reform Timeline, 1945-Present
Fredrick Hernandez and Andrew Lautz, Bipartisan Policy Center
A comprehensive timeline of major tax changes since World War II. Hernandez and Lautz provide a useful reminder that the tax system we live with today isn’t the product of any single, coherent design, but a hodgepodge of discrete provisions shaped by decades of political dealmaking, interest-group pressure, and growing partisanship.
Occasional marketing appeal: If you enjoy this newsletter, please share it with a friend or colleague. Help me grow the community of people who hate taxes, but love tax policy!