An Ode (of sorts) to the Income Tax

“Anticipation is makin’ me late… keepin’ me waitin’…” The IRS has until April 23 to provide President Trump’s tax returns to the House Ways & Means Committee. Panel chairman Richard Neal wrote a second letter to the IRS Commissioner Charles Rettig requesting the past six years of the president’s returns. He wrote that Treasury’s concerns about the legality of his first request—which had an April 10 deadline—lacked merit. What happens if the April 23 deadline passes like the first? Said Christopher Rizek, a tax litigator and former Treasury official, “for lawmakers, there’s no real effective remedy except to say bad things about them or not take their phone calls.” Of course, they could also go to court.

“Yeah I’m free…. Free filing…” Democratic legislators reintroduce a bill to direct the IRS to create a free online filing service. The lawmakers, including Sens. Elizabeth Warren, Bernie Sanders and Cory Booker and Reps. Brad Sherman, Tim Ryan, Alexandria Ocasio-Cortez and Katie Hill, made the move in response to the House-passed IRS modernization bill that codifies the agreement the IRS has with tax prep companies for them to offer free software (“Free File”) to low- and middle-income taxpayers. As part of that arrangement, the IRS agrees not to offer its own free filing services. Their bill, reintroduced last week, would instead direct the IRS to create a free, online tax-preparation and filing service. It would prevent the IRS from entering into agreements that would restrict its ability to offer such a service.

“Easy like Sunday morning.” TPC’s Bill Gale writes that “by providing ‘one-stop shopping’ for a wide range of public programs, the income tax simplifies citizens’ interaction with government.” With each annual income tax return, taxpayers can access a range of financial supports for essential needs such as childcare, college, retirement savings, healthcare or energy efficiency. The alternative? Signing up separately for each program providing assistance for a specific need—an administrative nightmare, both for individuals and the government. The income tax makes life simpler. Really!

“You think you know me well… But you don’t know me (no you don’t know me).” Will the public’s tax attitudes affect the 2020 elections? The American Enterprise Institute’s Karlyn Bowman reviews recent polls and finds stability in some tax attitudes and changes in certain other views. General opposition among the public to the Tax Cuts and Jobs Act has been stable, but it’s not clear to Bowman from the polling whether Americans think the TCJA makes a person pay more or less in taxes. Notably, the polling data show Bowman that “Republicans have lost some ground on [tax policy], and the Democrats may be gaining ground by hammering away on higher taxes on the rich.”

“If not now, then when? If not today, then why make your promises?” The University of Pittsburgh’s Anthony C. Infanti argues that US tax laws “reinforce the social and economic marginalization of women, racial and ethnic minorities, the poor, members of the LGBTQ community, immigrants and people with disabilities…. True tax reform takes time and should entail discussions among the electorate and with politicians regarding the role that the tax laws play in exacerbating social and economic inequality.”

Congress is not in session from April 15 through April 26. The Daily Deduction will post April 15 and April 22 and return to its regular schedule on April 29.

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