July 18, 2019

Why Americans Are So Good at Paying Taxes

“If such a thing as American exceptionalism remains, maybe it can be found in this: Despite deep IRS budget cuts, an average audit rate that has plunged in recent years to just 0.6 percent, and a president who has bragged that dodging federal taxes is “smart,” most Americans still pay their income taxes every year. Even more remarkable, most of us feel obliged to pay. To quote the findings of a 2017 IRS survey: “The majority of Americans (88%) say it is not at all acceptable to cheat on taxes; this ethical attitude is not changing over time.”

True, tax crooks might not confess their real feelings in an IRS survey. But other data confirm that the U.S. is among the world’s leaders when it comes to what economists call the voluntary compliance rate (VCR). In recent decades, America’s VCR has consistently hovered between 81 and 84 percent. Most countries don’t calculate their VCR regularly, but when they do, they lag behind the U.S. One paper that gathered what comparative data were available reported that Germany, the top European Union economy, had a VCR of 68 percent.

Other countries score worse, among them Italy (62 percent), the site of a sprawling tax scandal in which about 1,000 citizens were charged last year with bilking the government out of 2.3 billion euros in tax revenue. The public didn’t seem terribly bothered; ex–Prime Minister Silvio Berlusconi, who was convicted of tax fraud in 2013, may have tapped a common sentiment when he said back then that “evasion of high taxes is a God-given right.””

Read more

JJ Editor's Daily Picks

"The likely successor to British Prime Minister Theresa May, Boris Johnson, has plans to subsume the government department overseeing development aid into the foreign office, effectively eliminating it. That will destroy a post-Brexit United..."

"Gerard Baker, editor-at-large at the Wall Street Journal (no reflexively anti-Trump publication) recently wrote a piece decrying Donald Trump and his foreign policy as a fount of erratic unpredictability. This essay will give the counter view...."

"On Wednesday, Congresswoman Ilhan Omar announced that she will be visiting Israel and the Palestinian territories in the coming weeks. Omar will be accompanied by Rep. Rashida Tlaib. The two freshman congresswomen have become a focal point of..."

"Netflix may have lost US subscribers for the first time since it began making its own shows, but that didn't stop the streaming giant from dropping new figures about how many people are sucked into its Adam Sandler vortex. (Spoiler: More than..."

"A few years ago, Amy Balliett, CEO of a Seattle-based design and marketing firm, noticed that as the work week slogged on, her employees’ energy and productivity wilted. “That would slump to such an extent that the same task on Monday would..."

"Over the last few days the #faceappchallenge has taken over social media. This “challenge” involves downloading a selfie-editing tool called FaceApp and using one of its filters to digitally age your face. You then post the photo of your wizened..."

"Although there are plenty of irrational aspects to life in modern America, few rival the odd fixation on lawns. Fertilizing, mowing, watering — these are all-American activities that, on their face, seem reasonable enough. But to spend hundreds..."

"Can a book change the way we think? I don’t mean that in the sense of a reader’s opinion or ideology shifting—of course the right literary work can do that. But can a book rewire the brain itself, literally changing the way one particular mind..."

"It’s our job to let kids know we see and hear them, but we’re not necessarily going to solve siblings’ conflicts for them (or else they never get the practice). When squabbles start, imagine you’re a sportscaster and describe what you see in..."

"Magali Trejo-Martinez, a 22-year-old living in Salem, Oregon, recently went on a date that was rather uninspiring. “I had dinner, had a couple margaritas, and then went home,” is how she recapped the evening. This outcome wasn’t entirely..."

"The first lunar landing was many things — a D-Day-like feat of planning and logistics, a testament to the power of man's will, an ostensible propaganda coup for NATO. It was also, I think, one of the most misunderstood events in the history of..."

"THE FIRST TIME Bernie Sanders ran for president, he didn’t talk much about being Jewish. In fact, he didn’t talk much about himself at all. His 2016 primary campaign, like his whole political career, was relentlessly focused on one topic: income..."