April 15 is just around the corner, and while most working Americans have some sense of how much of their income the government taxes, far fewer know how much they really pay in other taxes on a daily basis. That makes it difficult to have productive conversations about tax reform and the necessary amount of government oversight.
A recent Job Creators Network/Scott Rasmussen poll found Americans underestimate the amount of taxes charged on ordinary purchases. An airplane ticket, for instance, is made up of roughly 20 percent taxes, but 57 percent of Americans underestimate that number. And only 20 percent of Americans know that 15 percent of a cellphone bill goes to taxes.
The same could no doubt be said of fuel, alcohol or health-related goods, all of which are subject to the federal excise tax. Americans may have an inkling that some portion of the end price goes to Uncle Sam, but exactly how much never seems to reach the consumer.
The concern isn’t that the federal government collects taxes on sundry items — government oversight requires revenue. But the amount of oversight should be open for debate, as should the larger concern that consumers have so little knowledge of how much of their money goes where.
Those who budget and carefully track their spending are more likely to regularly adjust their money habits because they are acutely aware of fluctuations in personal income, immediate needs and plans for the future. But what incentive do consumers or agencies have to change their behavior if they don’t know how costs break down?
That information is crucial to having the right tax conversations in what is a space already fraught with political landmines. Utah lawmakers had a taste of that pressure last week as plans for tax reform dissolved when the small details emerged and dissidents voiced their concerns. They’re now likely to give the matter more attention in a special session later this year, and it’s an illustrative example of how what sounds good in theory is often coated in complexity.
The same principle functions on the national level. The deficit is ballooning, and the debt has surpassed $22 trillion. If reining in those amounts is the goal — which it ought to be — everyone needs as much information as possible. Ignorance isn’t always bliss in the policy realm.14 comments on this story
Even a simple report issued by the government at the end of the year could go a long way to shaping the future of tax policies. In addition to the total taken from their income, taxpayers would see how much they paid in federal excise taxes and elsewhere.
That understanding would help drive a more focused conversation about how much government people are willing to pay for. It would not only curb ballooning spending, but it would spark a debate about what federal and state programs are nice and which are truly necessary. Good governance requires good public policy, transparency and knowledge of the present reality.
This should be one more opportunity to educate the average American and use that information as a check against bloated bureaucracy.