As the April 15 filing deadline approaches, Americans once again must wrestle with the country’s complicated tax code. The average taxpayer will spend 27.4 hours preparing their tax returns — about 5 percent will toil for a full 100 hours. In the end, a slight majority will abandon the effort to professionals (if 1997 figures hold steady). But even professionals get confused — and make mistakes. Is there a better way to run a tax system?
No matter how they figure their liability, many Americans wonder why such a large share of their income goes to Uncle Sam. In 1998, federal, state, and local taxes reached the highest level ever, comprising just less than a third of all income generated. That’s because the rich are getting richer, and due to 1990 and 1993 tax reforms, they pay higher rates. But, for the vast majority of families, taxes remain as low or lower than in any time during the past twenty to thirty years. A family of four can earn as much as $28,200 and pay no federal income taxes. So why do the Republicans clamor for tax cuts?
As Americans complete their form 1040s, three experts convened at Brookings will provide straightforward answers to the tangle of tax questions that reappear each year:
- Can and will taxes be simplified?
- Are Americans overtaxed?
- What are the prospects for across-the-board tax cuts?
- Should Congress adjust the marriage penalty or enact other targeted tax cuts?
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