Taxation Transparency

You know what I’d like to see on my tax return? A box that has me calculate the percentage of my income I paid in taxes. And right next to that calculation I’d like to see a little table that showed the average percentages paid last year by people at different income levels and the percentage of overall tax revenues paid by that income level. The table would be split out by people below the poverty line, two or three categories for the working poor and the middle class and then a category for people that earn more than $500,000 a year.

The information is out there already somewhere, but you have to look for it. Tax filing time would be the perfect time for the government to put this information in front of people – it’s the one time of year almost everyone is paying attention to what government costs them. The private sector has developed sophisticated strategies for getting information in front of consumers when they are most open to it – why shouldn’t the government do the same?

To my mind, a role of government is to give people the tools they need to take control of their lives. This covers a lot of areas, from insuring a good public education to requiring lenders to disclose the full cost of taking out a loan. However it’s not limited to the private sector – part of taking control of one’s life is also taking control of one’s government. Our federal government should give us the information we need to understand what government does, how much it costs and how much we contribute towards that cost. Government should provide the same transparency it requires of lenders. An informed consumer, whether of big screen TVs or of government, is a better consumer.

It’s an eye opening experience to see how much of one’s paycheck actually goes to pay for the government services we consume. It would also change the political debate in our country. Every four years politicians talk about taxation in a highly charged atmosphere, with both sides selectively pulling out figures to support their biases. I’m tired of right-wingers complaining about high tax rates – most wealthy people pay a lower percentage of their income in taxes than the middle class. And I’m tired of left-wingers complaining about the wealthy not doing their part – even at a lower percentage rate, most of the taxes collected come from the upper income levels. Showing every tax payer every year what percentage they pay and how that compares to people at their income level and different income levels won’t by itself change anything, but at the very least it will make for a much more informed discussion about our tax code.

Sometimes we get caught up in thinking about the grand changes that government can implement to impact society. Occasionally there are changes that have a significant impact – mandating seatbelts in cars led to a significant decline in the number of people dying in traffic accidents. But change happens on a smaller scale too. Every year thousands of street and highway departments evaluate accident rates and make adjustments in speed limits, signage and lighting to reduce accidents at a particular intersection. These thousands of small decisions save hundreds of lives every year. This is the reality of government – most change comes from the cumulative effect of thousands of small decisions, small actions.

Adding tax percentage information to our tax returns is one of those small actions. It won’t change the world overnight, but it will, over time, lead to a more sophisticated citizenship. Our country is based on the premise that each individual has an equal right to participate in our government. Creating a more informed population needs to be a constant goal – we must give our citizens transparency into government, in as many ways as possible, to help them take better control of their government.

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