Tuesday, April 17, 2012

Tax Day, Not a Holiday, But Not a Normal Day Either

I was going to skip my blog today, on the theory that most of my readers are too busy with their U.S. income tax filings to notice whether I write anything or not. But then the thought occurred to me that it might be worthwhile to point out what a strange day tax day is. You could tell there was something strange going on with just a glance at the traffic this afternoon and evening. Traffic was unusually light, for a business day. People were in strange moods too, not quite like a business day or a weekday, but somewhere in between a holiday and the preparations for a weather disaster. In spite of the summer-like weather, I saw hardly anyone on the beach for most of the afternoon.

The income tax is equally strange in a macroeconomic sense. To say that tax day is overshadowed by income tax work would be understating the impact. In all, about one percent of all the work done in the United States, an average of more than two days per worker each year, goes into the paperwork associated with federal and state income taxes. Even those who hire professionals to do their tax forms must do hours of work just receiving and keeping track of the required papers. It is a huge time sink, roughly the equivalent of football season but without the same entertainment value. My guess is that the tax day experience leaves most people thinking that income taxes ought to be simpler somehow. And when you look at the purpose of income taxes, the process certainly could be a great deal simpler.