Taxes in the United States: History, Fairness, and Current Political Issues by Brian Roach A GDAE Teaching Module on Social and Environmental Issues in Economics Global Development And Environment Institute Tufts University Medford, MA 02155 http://ase.tufts.edu/gdae Copyright © 2010 Global Development And Environment Institute, Tufts University. Copyright release is hereby granted for instructors to copy this module for instructional purposes. Students may also download the module directly from http://ase.tufts.edu/gdae. Comments and feedback from course use are welcomed: Tufts University Global Development And Environment Institute Tufts University Medford, MA 02155 http://ase.tufts.edu/gdae E-mail:
[email protected] I. INTRODUCTION “The hardest thing in the world to understand is income tax!” – Albert Einstein Taxes are complicated. The U.S. federal tax code contains over three million words – about 6,000 pages. A casual browsing of the tax code’s table of contents offers a glimpse into the vast complexity of federal taxation. Entire sections of the tax code apply specifically to the taxation of vaccines (Sec. 4131-4132), shipowners' mutual protection and indemnity associations (Sec. 526), specially sweetened natural wines (Sec. 5385), and life insurance companies (Sec. 801-818). Annual changes to the tax code imply that taxes will continue to become more complex even as politicians tout tax simplification. Taxes levied by other jurisdictions, such as states and cities, add further complexity to taxation in the U.S. Americans spend billions of hours each year working on their taxes, not to mention the costs of accountants and tax preparers. Fortunately, one needn’t comprehend the imposing complexity of the tax code to understand the crucial role of taxes in American society.