By now, you’ve probably been bombarded with messages from eager candidates promising you the world if you’ll just vote for them. But keep in mind that Election Day is only half the equation when it comes to formulating a desirable government. The first Tuesday in November may be the day we select our officeholders, but the invoice for our choices arrives almost half a year away on April 15 — tax-filing day.
While most consumers are required to pay for purchases upon delivery, voters don’t see the direct personal cost of who they elect until the following year. And now, amid a swirl of hyper-emotional campaign ads, the very real distress and financial hardship caused by filing and paying taxes tend to fade into the background.
The passage of time between when we dutifully vote and when we curse the IRS actually serves as a comfortable buffer zone for politicians against an onslaught of public discontent. It’s the ultimate “buy now, pay later” scheme.
As a result, taxpayers often end up with elected officials who give lip service to the idea of lower (or at least simpler) taxes, but who rarely have to deal with the immediate consequences of failing to back up words with deeds.
As a response to the disconnect, Rep. Roscoe Bartlett (R., Md.) has sponsored a bill that would move the deadline for federal income-tax returns from April 15 to the first Monday in November — conveniently, the day before Election Day. The cause is simple: strengthen the link between the politicians we elect and the taxes we pay for their services (or disservices).
While skeptics of re-designating tax-filing day note the permanence of April 15 in the minds of modern taxpayers, it isn’t historically set in stone. In fact, Congress has moved filing day from March 1 to March 15 to its current date. It can be moved again.
How would this change work? Let’s say the shift takes place between 2007 and 2008. Americans would pay 2006 taxes on April 15, 2007, and wait until November 3, 2008, (the first Monday in November that year) to pay 2007 taxes.
This move might even constitute a modest tax cut, since taxpayers owing money could earn interest on those funds for an extra seven months. Taxpayers expecting a refund could adjust their withholdings downward in order to see that money earlier than November.
Either way, the Treasury receives revenue on a fairly steady basis because of withholding and quarterly filings, in turn helping to prevent a shortage of funds (not that this has ever stopped the feds from financing their wish lists through deficits).
While Rep. Bartlett’s bill is a structural move, the shift also would lay a more solid foundation for substantive policy changes. Indeed, past examples have shown that the timing of tax due-dates can have an impact on translating ideas from rhetoric to reality. For example, for many motorists, Virginia’s much-despised car tax was (and still is) due October 5, and the proximity of its due date to Election Day has played a large part in the decision to cut the tax.
Conversely, the local government in Davidson County, Tennessee, has delayed sending out property-tax bills this year, and watchdogs have pointed out how conveniently this might postpone taxpayer resentment that could otherwise boost support for a local property-tax limit on the Nashville-area ballot.
Of course, the cost of moving tax-filing day should be considered. Given the size, scope, and complexity of filing and collection, putting a date-shift into practice would admittedly be a large undertaking. Yet it certainly would be less complicated than other governmental activities (like wiping out poverty through massive wealth transfers).
While no government organization has yet put out a public cost analysis of Rep. Bartlett’s proposal, it is possible to estimate some of the expected costs. For example, after Congress increased the child tax credit in 2003, the IRS sent notices and refunds to 25 million affected taxpayers at an estimated cost of $30 million. The average cost for postage, printing, programming, and answering customer calls was roughly $1.20 per taxpayer. Based on current tax-filing statistics, an equivalent notification and support system for all individual income-tax returnees would carry a price tag of just under $160 million, about one-half the price of the infamous “bridge to nowhere” in Gravina Island, Alaska.
Yes, shifting the date also would cause some headaches for private taxpayers and the business community. But doesn’t the very thought of April 15 already cause headaches, with the tax laws changing nearly every year? Doesn’t the U.S. Tax Code already rack up hundreds of billions of dollars in compliance costs? Might taxpayers be willing to put up with a transition year in return for future tax-policy changes that could make filing taxes more transparent and simple? Very possibly.
Moving tax-filing day closer to Election Day would highlight the relationship between what Americans pay to the federal government and what they receive, which just might have an impact on who they elect to serve in public office. In the meantime, don’t forget the anger and frustration you felt last April when you go to vote tomorrow.
– Kristina Rasmussen is senior government affairs manager for the National Taxpayers Union.