Zelenak celebrates return-based mass taxation in new book

February 1, 2013Duke Law News

Professor Lawrence Zelenak

Tax day is a focal point for cultural phenomena ranging from water cooler complaints, to sitcom tropes, to strident protest.  In his forthcoming book, Learning to Love Form 1040: Two Cheers for the Return-Based Mass Income Tax (University of Chicago Press, 2013), Professor Lawrence Zelenak outlines the full spectrum of political and cultural significance unique to the American income tax.

“It’s a tax that forces people to pay attention in a way that payroll taxes and retail sales taxes and various other less in-your-face forms of taxation don’t,” says Zelenak, the Pamela B. Gann Professor of Law. “The book argues that having that sort of a tax system can be a good thing, because it promotes the virtues of fiscal citizenship.  The two great obligations of citizenship are voting and paying taxes, and just as there is a ceremonial aspect to voting, there ought to be — and in the case of return-based taxation there is — a ceremony of fiscal citizenship through filing your tax return.”

Since the return-based income tax became a mass tax during WWII, the federal income tax has been the focal point of the American public’s perception of taxes, Zelenak says.  “The federal income tax raises only about 25 percent of the tax revenue in the U.S., but if you were to judge by popular culture you would think it raised 100 percent. That’s because of the return-based nature of the tax.”

Zelenak examines depictions of tax day in radio and TV sitcoms and New Yorker cartoons in his book, due out in March. He also analyzes the effects of a system requiring substantial taxpayer participation.

“This sort of taxation makes it easier for people to cheat than other forms of taxation,” Zelenak says. “I argue that, although there’s an obvious bad aspect to that, there may be some good too. It may make people feel less at the mercy of Leviathan, that the federal government can’t just reach into their pockets and take their money; it requires their cooperation.”

Return-based mass taxation enables protest as well as cheating, Zelenak says. “The tax protest movement depends on return-based mass taxation. If there is a tax that doesn’t depend on you doing anything, such as the payroll tax, it’s hard for people to protest effectively . With the income tax you can protest effectively, and that may serve as an important safety valve. It gives people a nonviolent way to enact a meaningful protest.”

The book notes that the concept of paying income tax as the key to fiscal citizenship played a role in the recent presidential campaign.  Republican presidential nominee Mitt Romney’s complaint about the 47 percent of Americans who pay no income tax was based on the implicit assumption that the income tax was the only relevant tax.  “The percentage of people who don’t pay taxes overall is much lower than the percentage who don’t pay income tax,” Zelenak remarks.  “But the other taxes tend to get lost in the glare of the return-based income tax.”

The return-based federal income tax reaches its centennial in 2013 (although the tax did not become a mass tax until WWII).  Zelenak notes that despite all the current talk of tax reform, there is no serious discussion of abandoning return-based mass taxation: “They may be celebrating the bicentennial in 2113.”

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