Tax returns should not be made public information

That is the topic of my latest Bloomberg column, here is an excerpt:

This idea has been suggested recently by Binyamin Appelbaum of The New York Times and also Matt Yglesias of Vox. In Norway it has been policy since 1814 and Finland does something similar.

I’m afraid, though, that universal tax transparency would boost U.S. economic inequality, take away second chances and devastate privacy.

And:

Or think about the dating market. Tax transparency would give high-earning men and women a bigger advantage and hurt their lower-earning competitors. Do we really wish to do that in an age of growing income inequality and diminished upward mobility?

Is it better if your parents and all your friends can see how well your new job is going or how much in royalties your last book earned? As it stands, we exist in a slightly more comfortable social equilibrium where your close associates assume the best or at least give you the benefit of the doubt. Transparency of earnings would increase stress and make failure and disappointment all too publicly evident. Or entrepreneurs with long-term projects which are going to make it — but not right away — might face too many social or family pressures to quit.

Snooping through the tax system would definitely happen. Evidence from Norway indicates that in 2007, 40 percent of Norwegian adults checked somebody’s tax information online, higher than the penetration of Facebook in Norway. Anonymity of the snooper was removed in 2014, and visits fell dramatically (88 percent by one measure), but still you can imagine paying others to snoop for you or the information eventually getting out over time.

The result of tax-record publication was that “this game of income comparisons negatively affected the well-being of poorer Norwegians while at the same time boosting the self-esteem of the rich,” according to Ricardo Perez-Truglia, a UCLA economics professor writing last week in VoxEU. There’s even a smartphone app that creates income leaderboards from the data on your Facebook friends.

Just as personal freedom and economic freedom are not so easily separable, the same is true for personal privacy and financial privacy.  Are there actually people out there worried about Facebook privacy violations who wish to make all tax returns public and on-line?

Comments

Think of the children!

Seeing the magnitude of tax evasion by the Pillars of Society!*

Rhetorical Q: What's not to like re: complete transparency?

* Chuck Koch

You will never see tax evasion in any records

Tax avoidance is easily discerned, however.

And fully legal.

Which just might lead to changes in the tax code, assuming one had data at hand.

Aren't you the guy who downloads pirated IP?

Didn't he also work in fundraising for GMU or somebody for a time? Gee....I wonder why someone might make a large donation to a public university.

I have never worked in 'fundraising' but in PR. And this shows you have no idea how most people contribute where I used to work, as this is inaccurate - 'I wonder why someone might make a large donation to a public university.'

People generally contribute to the GMU Foundation, precisely to keep their donations - and any attached conditions - completely out of the public eye. A point worth repeating, noted in this ongoing court case - 'Members of student group Transparent GMU went Tuesday, Feb. 12 to Richmond to have their case against the GMU Foundation and Mason considered by a writ panel of the Virginia Supreme Court.

The case centers around whether the GMU Foundation, a private entity that processes donations to Mason, is subject to the Freedom of Information Act (FOIA). If so, it would require them to release information related to currently private agreements between donors and Mason.' http://gmufourthestate.com/2019/02/18/mason-donor-transparency-case-comes-before-writ-panel/

Don't worry, that conflation between a public university and a private entity is intentional - and now spans a generation.

A distinction without a difference. The point is, you were a direct beneficiary of tax avoidance schemes you're now pretending to be scandalized by, at least before you got shitcanned.

'A distinction without a difference.'

Depends on your viewpoint - or which department you work in, and who pays you.

'you were a direct beneficiary of tax avoidance schemes'

Tax avoidance is legal, of course. This would be like saying that an employee paid by a company that earned profits (which also describes one of the jobs I had at GMU) is a direct beneficiary of a profit scheme.

And it is fascinating how many people seem have a need to believe in a fantasy of my being fired. Almost makes me want to quote from the recommendation letter written by the person who last employed me at GMU.

Read it again. They probably just wanted you to leave.

Yep, a fascinating need.

In what sense? This is going to be hard to imagine, but the rules outside of the U.S. are different.

But if you mean have I been recording various streams for more than 15 years, yep, I have been pirating 'IP.' Why do you think I've used youtube-dl, basically since its first version? https://ytdl-org.github.io/youtube-dl/index.html - great way to avoid all the youtube ads, comments, next video, etc - along with always having a copy available to watch whenever I wish.

And this might be equally hard to imagine, but bittorrent is used for considerably more than 'piracy' - I generally torrent from archive.org, for example. Like this example of unpirated content - 'Stop Making Sense, the seminal Talking Heads concert movie.' There is so much 'IP' out there, why bother pirating IP trash from Disney? https://archive.org/details/Stop.Making.Sense.1984

So, short answer, Yes.

Or the short answer is No. I do not break the DMCA when playing a DVD on my Linux laptop, for example, as that is fully legal in Europe.

I have actually chatted about this broad subject with Alan Cox, who said years ago that he will never travel to the U.S., for fear that his fully legal work in Europe would be used to arrest him in the U.S. The conversation occurred after this incident - 'Some of us who regularly write about intellectual property issues jokingly refer to publishers as the "copyright police," and contemplate being thrown into "copyright jail" for "violating" fair-use laws. Despite this imagined scenario, I never really expected that a civilian would be arrested and criminally prosecuted by the U.S. government.

Leading Up to Action, Arrest
On July 16, 2001, Dmitry Sklyarov, a Russian programmer, was arrested by the FBI as the copyright holder of a software program that circumvents the technology that protects against the unauthorized copying of Adobe Systems' eBook format. Sklyarov's arrest was preceded by several events. On June 22, his company, ElcomSoft (http://www.elcomsoft.com), posted a press release announcing the sale of a software program called Advanced eBook Processor (AEBPR), which removes encryption coding from Adobe Acrobat PDF files and Adobe Acrobat eBook Reader software. In part, the press release stated:

Advanced eBook Processor lets users make backup copies of eBooks that are protected with passwords, security plug-ins, various DRM (Digital Rights Management) schemes like EBX and WebBuy, enabling them to be readable with any PDF viewer, without additional plug-ins. In addition, the program makes it easy to decrypt eBooks and load them onto PalmPilots and other small, portable devices. This gives users—especially users who read on airplanes or in hotels—a more convenient option than using larger notebooks with limited battery power to read their eBooks.

PDF protection can prevent users from changing or printing information, adding or changing annotations and form fields, or even selecting and copying text or graphics. With Advanced eBook Processor, these PDF files can be decrypted, opened, and used without any of these restrictions. Once protection has been removed, PDF files created with Adobe's Acrobat program can be opened in any PDF viewer, including Adobe's Acrobat Reader.' http://www.infotoday.com/it/nov01/ardito.htm

Don't know what Cox thinks these days, with Assange facing a warrant for 'hacking.'

And for the daring using VideoLAN on linux - https://www.videolan.org/developers/libdvdcss.html

Warning - Americans are apparently breaking the law by playing legally purchased DVDs using this library. 'The Digital Millennium Copyright Act (DMCA) makes unlocking cell phones, ripping DVDs, removing eBook DRM, and jailbreaking tablets illegal in the USA. However, there’s another surprise: simply watching a DVD on Linux is also illegal.

This is why Ubuntu and other Linux distributions don’t include out-of-the-box DVD support, forcing you to run a command that downloads and installs libdvdcss from elsewhere – not the Linux distribution’s software repositories, or they would get in trouble.

If you are an American who’s watched a DVD on Linux, there’s a good chance the DMCA makes you a criminal.' https://www.howtogeek.com/138969/why-watching-dvds-on-linux-is-illegal-in-the-usa/

It's amazing the walls of text you will throw up to avoid the point.

" do not break the DMCA when playing a DVD on my Linux laptop, "

No one asked you that.

Do you pirate songs or movies?

This isn't novel. The corrupt and incompetent Clintons and Barack Hussein Obama used the IRS as political weapon.

No Russia collusion? Orange Man Bad! Chuck Koch Bad! Chick-fil-A Bad!

If you think the IRS didn't go over Trump's 1040's, you may be interested in this old thorn I have to sale. It's taken Christ's crown of thorns.

Seriously, brings up some sour points. They needed to amend the Constitution to allow the big-state to confiscate your income/substance. With that amendment, they cancelled your Constitutional rights, e.g., your are required to incriminate yourself by filing a 1040. Then, they use it against you in tax court, which is more arbitrary than the Spanish Inquisition.

The typical congressman/senator can't handle the tax returns. They' re too fucking stupid.

One trick pony stumbles through its one trick one more time.

mebbe before david brooks & nyt.com etal
starts going through our tax returns the nyt times could explain the difference between surveillance and spying? we think they
are mostly the same.
cnn they make the pissy face and say there is a difference between
surveillance and spying but they don't/cant explain the difference.
we think this is why cnn is making the pissy face!
vaya con juevos

Easy compromise: make tax returns public in 75 years so that they're available for study on a systematic basis but do not have the downsides of impacting today's inequality.

And anonymize them

There's no evidence it would impact inequality and Tyler knows that. And if you read Tyler's stuff he's not actually much worried about inequality. So his mention of it is just a convenient talking point I'm afraid.

'Tax returns should not be made public information'

Yet, due to one of the more obvious examples of corruption involving administration malfeasance, Congress has the explicit right to require the tax returns of any American citizen so as to provide a check on corruption.

Whether this explicit and unconditional legal right, designed to prevent the circumstances surrounding the infamous Teapot Dome scandal recurring, is the same as making tax returns public information is left up to the reader's mood affiliation? virtue signalling? imagination.

'In Norway it has been policy since 1814 and Finland does something similar.'

Seem you forgot Sweden. Possibly this gives some insight into that lack - 'These policies are rooted in cultural traditions. The Swedish concept of the “law of jante”, which means no one is special or should stand out, underscores how individuals can threaten the Nordic region’s core collectivism.

In Sweden, whose system of cradle-to-grave welfare paid for by high taxes relies on voters’ faith in its fairness, the tax agency consistently polls as the most respected state institution.

“Trust is the foundation for Scandinavian openness about taxes,” said Gert Tinggard Svendsen, political science professor at Aarhus University in Denmark.

“The welfare systems we have in Norway, Sweden and Denmark are basically a collective insurance ... you trust that all the other people will work and pay taxes. That trust in other people gets an extreme expression in the publication of taxes.”

He said surveys show Scandinavians top international rankings for expressing trust in other people.' https://www.reuters.com/article/us-panama-tax-nordics-idUSKCN0X91QE

'the same is true for personal privacy and financial privacy'

Odd just how easily accessible any American's financial information is to anyone with merchant access to a company like Equifax or Experian or TransUnion. You know, like a used car dealer who just happens to be curious about a 'prospective' customer.

Here is what Equifax says - 'Permissible purpose is actually a good thing. It determines who gets the green light to access your credit reports, including your Equifax credit report. Fortunately, the list of those who can access your Equifax credit report isn't very long, and some of these third parties still require your permission first. Here are some examples:

● Lenders and creditors you are applying for credit with

● Lenders who wish to prequalify you for credit or insurance

● Existing creditors you have a relationship with

● Debt collection companies to use in collecting payment

● Insurance companies, to underwrite insurance involving you

● Employers or prospective employers (with your permission)

● Rental companies/landlords, phone and utility companies

● Certain government agencies' https://www.equifax.com/personal/education/credit/report/who-is-allowed-to-access-your-credit-report/

Yep, sure sounds like B-B is involved in a good thing, doing its best to make money by keeping your private data in only those hands that pay to access it.

"Odd just how easily accessible any American's financial information is to anyone with merchant access to a company like Equifax or Experian or TransUnion. You know, like a used car dealer who just happens to be curious about a 'prospective' customer."

But of course that is quite different than all your neighbors and Facebook friends being able to freely look up your income (which the credit report doesn't actually include). And if you don't want any organization checking your credit score, you can prevent that by putting a freeze on your credit reports and opting out of pre-screened credit offers:

https://www.consumer.ftc.gov/articles/0497-credit-freeze-faqs

After you've done that, who can access your credit score?

Certain entities still will have access to it.

- your report can be released to your existing creditors or to debt collectors acting on their behalf.

- government agencies may have access in response to a court or administrative order, a subpoena, or a search warrant.

'But of course that is quite different than all your neighbors and Facebook friends being able to freely look up your income '

Sure, though income is always an interesting term. However, the salaries of employees of the Commonwealth of Virginia can be looked up right now - https://www.bizjournals.com/washington/news/2018/09/30/public-paycheckswho-earns-the-biggest-state.html Somehow, being able to instantly access the income information of professors at GMU does not seem to have led to any of the problems discussed by Prof. Cowen.

As noted below, 'After you've done that, who can access your credit score?' includes 'For our affiliates’ everyday business purposes. Information about your transactions and experiences.' That is, you can not opt out of your information being shared with an insurance company that is a 'business affiliate.'

Note, the link below is not about a credit score or credit report, it is about actual balance information at your credit union.

"As noted below"

Below where? Not on the credit-freeze page I linked.

So what? A bunch of businesses know my social security number, that doesn't make it "public" information.

As this blog has pointed out, Sweden has very high levels of wealth inequality. The social contract seems to be that the rich kept their fortunes, while the working class pays half of its income to the state. Keeps everyone neatly in their place.

"unconditional legal right"

No legal right is "unconditional".

Plenty of case law that legislative information requests must have a legitimate legislative purpose.

If you are referring to Trump personally, it may violate the constitutional separation of powers to compel an obvious fishing episode.

When I think of Swedish transparency, I think of IKEA, the firm known far and wide for its openness and commitment to paying its full share of taxes to help fund Sweden's cradle-to-grave nanny state.

You really can't be this stupid. No one is suggesting that every tax return be made public. But for a position of public trust and ridiculous power in our system asking for financial transparency is literally the least we can do. Also, if you were aware of the history behind this, the law in question was passed because of an incredibly corrupt President, and the custom of Presidential candidates disclosing their tax returns started because Nixon was indeed a crook and was trying to disguise that fact. It turned out that Nixon was a tax cheat and owed ~$500K (equivalent to ~$2.5 million today). His VP was also a tax cheat who didn't disclose his income from bribes, which fortunately led to his resignation.

And really, it's just common sense. People who fight this hard to violate norms are hiding something. Stop enabling them.

'But for a position of public trust and ridiculous power in our system asking for financial transparency is literally the least we can do.'

And it is the law, of course, as noted in this article from 2017 - 'Eventually, Congress decided that tax information should remain confidential except in two situations. First, it authorized the president to determine whether any tax information could be disclosed. And, in 1924, it gave the same power to certain congressional committees.

Congress’s right to reveal tax information independent of the president’s authority proved extremely important in 1973 and 1974, when President Richard Nixon became entangled in a controversy involving his claim of a sizable charitable deduction for giving his official papers to the National Archives. Nixon initially stonewalled the inquiries, including making his famous statement that “I am not a crook.” https://www.washingtonpost.com/opinions/congress-has-the-power-to-obtain-and-release-trumps-tax-returns/2017/02/07/aa53254c-ea63-11e6-80c2-30e57e57e05d_story.html?utm_term=.f86c8631900a">https://www.washingtonpost.com/opinions/congress-has-the-power-to-obtain-and-release-trumps-tax-returns/2017/02/07/aa53254c-ea63-11e6-80c2-30e57e57e05d_story.html?utm_term=.f86c8631900a

I'm sure that Prof. Cowen merely forgot that the president also has the legal right to reveal any tax return he wants, after having apparently gotten over his doubts about a vindictive president wielding his powers in an attempt to get revenge on his opponents.

Yeah, the current conversation is whether the POTUS should release his tax return as has been standing tradition for 50 years. I'm surprised we don't have all politicians do so. This could keep corruption down. We should also keep tabs on former presidents too to prevent backpayments for services rendered.

Exactly. We need to make a sweeping change to our long-standing national tax regime and understanding of personal privacy because Trump is violating political norms.

You really can't be this stupid. No one is suggesting that every tax return be made public.

Did you read ANY of the column or post? In the very. first. sentence. he links to a NY Times column entitled Everyone’s Income Taxes Should Be Public. Obviously *someone* is suggesting every return be made public and that someone had their opinion piece published in the not-entirely-obscure NY Times. He also links to someone else on the not-entirely-obscure Vox website arguing that the US should make all tax returns public as Norway does.

Tyler is not going to comment on the obvious charade of trying to publicize Trump's tax returns. The fact that the Dems seamlessly turned to this "issue" after the Three Year Mueller Report blew up in their faces tells you all you need to know.

And for all you dopes out there saying this practice will "expose corruption": Yeah, right, everybody reports bribes on their income taxes. And sure, all the foreign donations to the Clinton Foundation somehow showed up on Bill's 1040. You are wall-to-wall idiots, each and every one of you.

+1

These Einsteins should be hired for top positions at the Fed.

It never disappoints. I read comments for my post doctoral, field work in proctology and for evidence of the higher education apocalypse.

1. Publish or publicize a silly op-ed that helps to obfuscate the actual current problem by making it into a theoretical threat against everyone

2. Watch the dimwits come out and try to make the stupid general idea seem to be the result of dealing with the specific problem that actually is an issue

3. Hope everyone throws up their hands and conclude "It's too complicated".

4. Rinse and repeat for every specific problem that needs to be dealt with.

"Are there actually people out there worried about Facebook privacy violations who wish to make all tax returns public and on-line?"

Thanks. Not that pointing out hypocrisy does much to stop it...

Are there actually people who are worried about making their tax returns private who wish to make their Facebook public and on-line?

"Calling for more disclosure may seem discordant at a time of growing concern about privacy. But income taxation is an act of government, not an aspect of private life."

If this is true, then a lot more information should be published by the federal government. For example, "the payment of welfare benefits is an act of government, not an aspect of private life". Should the total amount of such benefits and the names of recipients be disclosed annually? This would certainly decrease fraud. And, the payment by the federal government of a woman's abortion costs "is an act of government, not an aspect of individual privacy". There are, in fact, a lot of things that simultaneously entail both. But, in the simplistic opinion of a New York Times journalist, it must be one or the other.

Yes, also, mental health is a vital matter of public interest. For the public to be properly informed about the state of our mental health system, every mental health patient's records should be made available for public examination.

Every telemarketer, advertiser, and wannabe price discriminator ---airlines, drug companies, software firms, TV and music providers, Amazon, Uber, just about every company actually --- knowing your income and ability-to-pay --- what's the problem?

'what's the problem?'

Apparently none, as that describes the current reality of the U.S., thanks to the B_B supergourp trio of Equifax, Experian, and TransUnion.

And as noted above, Prof. Cowen was apparently unaware that insurers can already access your financial information, and are performing as much price discrimination as one would expect from shark-like legal entities devoted to commercial profit when he wrote 'Your insurers will be interested in this information as well. It’s already the case that residents in poor zip codes pay higher premiums, even after adjusting for their level of risk. If insurers had data on everyone’s exact level of income, these kinds of discrimination might become worse yet.'

I think, if I’m understanding your claim correctly, that you’re under a bit of a misapprehension. As a regular user of such data, I can tell you that none of the “Big Three” CRAs has good data on your income. They obviously have a great deal of data on your level of debt, recent payment history, and public records including the existence of bankruptcy filings, but the income data is usually self-reported and badly out of date if it is available at all. They *can* provide a modeled income (for instance, TU’s TIE), but in practice the models have huge amounts of uncertainty.

'has good data on your income'

Depends on how one defines income, and what paperwork you have filed with your credit institution(s) in terms of selling/sharing data.

Here is an example - 'The types of personal information we collect and share depend on the product or service you have with us. This information can include: Name, address, Social Security Number, Account balances and payment history, Credit history. When you are no longer our member, we continue to share your information as described in this notice.' Do note the 'account balances' - how often is your salary paid, and how often is that information shared? https://www.elevationscu.com/privacy-notice

It is an illusion to think that regular deposits into your account from an employer are magically hidden from the credit reporting trio. That you may not have access to that information in the free data they provide consumers is another discussion.

So why do you think that's a bigger problem than, as prior says, knowing your balance of current debt and consumer behaviour? What are the negatives?

Fixing prices to fit known, rather than inferred, income doesn't seem like it's clearly got bad consequences.

One provides much greater detail than the other. All my credit report says is that I pay my visa on time. It provides no hint whatsoever of my income.

'It provides no hint whatsoever of my income.'

That is the data they provide you - do you think that is all the data they have? Not even close, in case you were ever in any doubt, by the way. And how they sell the data they collect is not under your control - 'In one notable exchange, Sen. Catherine Cortez Masto (D-Nev.) asked the interim chief executive officer of Equifax, Paulino do Rego Barros, why consumers do not have a say in opting in or out of the company's data collection.

“This is part of the way the economy works,” Barros said. But he was swiftly interrupted. “The consumer doesn't have a choice, sir. The consumer does not have a choice on the data that you’re collecting,” Masto said.' https://www.washingtonpost.com/news/the-switch/wp/2017/11/08/equifax-says-it-owns-all-its-data-about-you/

Leading to this logical conclusion on the part of B-B - 'After confirming with Barros that it is Equifax, and not consumers, that owns all the granular data collected about them, and that consumers cannot request to exit the company's files, Sen. Cory Gardner (R-Col.) asked the current Equifax chief if it was right that the company maintains that arrangement. “I think it’s not my perspective to say it's right or wrong,” Barros said.'

Your credit report, your store cards, your amazon, etc. Cumulatively can build quite a picture.

But thats not so important; the question I posed was why it is that sellers targeting your income is even sure to have negative effects for you, rather than say better seller to buyer price and product matching. More than 8 hours later I see no reasoned argument forthcoming.....

"Every telemarketer, advertiser, and wannabe price discriminator...knowing your income and ability-to-pay --- what's the problem?"

But they don't. Your income tax information is not included in your credit score and if you want, you can block access to your credit report and that will exclude lookups by everybody except for lenders you're already doing business with.

I think BC is implying the same thing. that currently they don't and it would be a problem if they had access.

We should make tax returns public so my soon-to-be startup can use AI and machine learning to profit from the information of other people like Equifax or Facebook. Profit is king, yes?

I kinda like the idea of everyone's tax payments being right there under the Facebook profile picture. Make people proud to pay taxes! Dating apps already ask about income, but taxes aren't just income. They're about what you contribute to the community. People who pay big taxes arguably don't get enough respect, and people who dodge paying taxes certainly get too much.

Does that go above or below the person’s record of arrests and convictions?

'the person’s record of arrests and convictions'

You do know that is public information already available, right?

Definitely above their prior marriage history and charitable contributions.

And Mental health records should be at the very top of the list.

Firstly, As it stands, we exist in a slightly more comfortable social equilibrium where your close associates assume the best or at least give you the benefit of the doubt.

What kind of world are you living in Tyler where people "assume the best"?

Secondly, Or entrepreneurs with long-term projects which are going to make it — but not right away — might face too many social or family pressures to quit.

Or maybe that'd attract them more funding or support?

You can argue about privacy from a rights perspective, but consequential and harm based arguments that non-disclosure is socially protective are lame.

Perhaps our privacy rights on tax necessitate hoarding information (against the advantages of so much more information to fix tax loopholes - we need to know where to harvest the rich who are milking everyone else), but preserving bad institutions like 'face' about income (it is ridiculous that anyone should ever have pride about how much money they make or face social sanction for it), and preserving the ability of fabulists and liars to build up their businesses and careers and the tax they pay to more than they are.

Of course, random or politically motivated invasion of privacy on a ad hoc, inconsistent case by case basis is bad ("We've gotta get politican X at all costs!"), but transparency for all is a more debatable issue.

Another note to add: "The result of tax-record publication was that “this game of income comparisons negatively affected the well-being of poorer Norwegians while at the same time boosting the self-esteem of the rich,” - ostensibly worrying about the self esteem of poorer citizens seems a bit bloody rich as a justification when combined with also taking the stance in other arguments that poorer individuals should face up to 'reality' and their place in the 'meritocracy' and that they need to quiet down and accept it.

"Or think about the dating market. Tax transparency would give high-earning men and women a bigger advantage."

If high income really gives an advantage, people would tell you their income when you meet them. Indeed, some kind of people already boasts about income, house size, car model or whatever in order to attract nicer partners.

However, to boast about being rich you don't need to be rich at all: con artists, fraudsters, hip-hop singers, etc. At any given time the amount of people claiming to be rich is much larger than the amount of truly rich people. Tax transparency would just uncover most of bluffers while giving the young and pretty better information to choose =)

I am disappointed by this column. How can you miss the most important reason to make tax records public: increase the social pressure to make people pay their taxes. Instead you choose to focus on "psycological effects" which while not unimportant are really of a smaller concern. I suspect that for Trump we would find out that he is a lot poorer than what he says he is, but in general, isn't it a good thing that we are able to check whether people have as much money as they claim?

"increase the social pressure to make people pay their taxes."

It won't work. People pay as little as they can get away with. You think people are going to not take advantage of tax loopholes to impress their friends?

But if you see your neighbor claimed little income but has a new truck and boat you might be willing to rat him out.

Or if you *know* he's earning and its pure bullshit that he's not paying, and this isnt some remote figute you can explain away, you'll support the IRS in tax reforming away those little loopholes. If it wasn't a threat, They wouldnt worry.

For a different view, here's David Brooks on Five Lies Our Culture Tells Us: https://www.nytimes.com/2019/04/15/opinion/cultural-revolution-meritocracy.html

Here a good reason for tax returns to be public: "Amazon. Delta Air Lines. Chevron. IBM. General Motors. Molson Coors. Eli Lilly. What do these companies have in common? They paid no federal taxes last year. Thanks to President Trump’s 2017 tax law, the number of Fortune 500 companies that pay no federal taxes roughly doubled last year, to 60, according to an analysis by the Institute on Taxation and Economic Policy, a research group. Some of them effectively paid negative taxes, because they received a refund. . . . Altogether, the law led to a 31 percent decline in corporate-tax revenue last year. That decline has helped cause an increase in the deficit. As the law professors Rebecca Kysar and Linda Sugin have written, the Trump tax cut is financed “on the backs of future generations.”' https://www.nytimes.com/2019/04/15/opinion/corporation-taxes-cohen-russia.html

The fact that some corporations pay zero taxes while under a regime of tax-return transparency leads you to conclude what exactly about the value of transparency?

How about insisting that even the bank statements of certain citizens (or residents) be public knowledge? I'm thinking of politicians, civil servants, judges, policemen, and the like.

Unnecessary if you have the other disclosure. The argument you are making is to try to extend disclosure so far that NO disclosure occurs.

Let's focus on what is necessary AND sufficient.

Would disclosure of tax returns improve tax compliance and trigger tax reform that closed preferences (loopholes) exploited by the wealthy? Or would disclosure so enrage the public that tax evasion would spread across the land like flood waters in the spring? Our host has chosen the contrarian's path for reasons that are unclear to me - his body of work at Bloomberg and here at MR is an archive of contrarian opinion. With every column and blog post I am reminded of the scene from The Princess Bride when the Man in Black tricks Vizzini to drink from the poison cup. Is Cowen the Man in Black? Here's a puzzler: Is Donald Trump another Man in Black, his China-bashing encouraging economic reform and thereby making China an even stronger competitor of the U.S. and making Trump China's savior? https://www.nytimes.com/2019/04/16/business/trump-china.html

I think it is pretty simple. The tax returns of elected officials should be public. This would be less important if the IRS had effective enforcement mechanisms.

Dodging taxes is unpatriotic and increases the burden on honest people. To have known tax cheats in positions of status and power sends the message that avoiding taxes is acceptable.

Simple yes or no question: do you try to minimize your tax burden?

I don't really optimize my taxes, but sure, like everyone else, I take advantage of tax breaks. Many tax laws are designed to change behavior.

However, you seem to be claiming there is no difference between minimizing ones tax burden and dodging taxes. It is a convenient viewpoint for tax cheats to take because then they can ignore their lack of patriotism and ethics. Just because you can get away with something, doesn't make it right. Honorable people do they right thing even if, and especially when they won't get caught. Tax cheats should be prosecuted when they break the law and shamed when they dodge taxes legally.

Dodging taxes is as American as apple pie.

Government is wasteful and spend stupidly.

You have that backwards. Tax compliance rates in the US are very high compared to other countries. Do you want lower compliance rates?

Nobody is happy with how the government spends money. The inefficiency of government in no way justifies dodging taxes (call your congressman instead). By cheating, you are not reducing government spending or making it less stupid. You are simply stealing money from the wallets of honest and patriotic Americans.

Everyone, just for the hell of it, can find out Tyler's salary as an employee of the State of Virginia. You can find it.

Every federal and state employee, if you know their classification, has a salary that you can find.

If you are a partner in a law firm, you know what your other partners make. It's not the end of the world, and it keeps everyone honest.

By the way, the source reports also outside income in addition to state income. Must be a requirement of state employee disclosure.

"The U.S. has one of the most complicated tax systems in the world"

Yes. So make all tax returns public and harness the resulting dischord to simplify the tax system. Why are we taxing income anyway? Tax consumption. Or would that be too much for a FANG fetishist like Cowen? After all Alphabet's business model would be wrecked over night if marketers could just get their data straight from the government and not have to pay an internet data monopolist for proxy data. And with actual financial information people in the marriage market would not have to accept inferior substitute proxies like Ivy League degrees.

Professor Cowen makes a very strong case for making all tax returns public.

I find it interesting that the discussion focuses on income, but the issue is taxes paid.

It doesn't take much research to find executive compensation ... It's often reported .... in fact, there are public comparison charts of what people make...so, that's not the issue.

The issues is taxes.

Now, if you want to protect disclosure of income, you can simply report what percentage of income was paid in taxes. There. You do not know the income, but you do know what percentage they paid (or not), so you can judge.

Ask yourself this question: What percentage of discretionary income is paid by a poor person (include sales taxes) compared to a rich person.

+1.
may be the best solution. keep the numbers confidential but lets know the % of Income paid as taxes. Of courrse for bribe-takers , they can still show a god percentage of the non-bribe income, but still that's a start.

"Or think about the dating market. Tax transparency would give high-earning men and women a bigger advantage and hurt their lower-earning competitors. Do we really wish to do that in an age of growing income inequality and diminished upward mobility?"

I'm not sure this is really a good case. Some might play the old school rich marry rich, marriage for wealth or business relationships -- think modern family ties like the old feudal era (or even modern Chaebol in ROK).

But many might also choose partners from a different income level for security reasons -- fear or rejection and abandonment is not all that rare. It's why some will gladly and happily parther/marry those that are not fitting the standard image of beauty (and many hopefully come to realize they start seeing with new eyes as time passes).

That said I would find it hard to see any good argument for such a policy of financial transparency outside a business entity such as a modern public stock corporation.

Side question here though -- given the reporting requirements one might ask what impact that has on both the EPS "management" activities as well as the lobbying related to various options for accounting of income (do these help remove the attempted regulatory transparency)?

I thought Tyler's argument was humorous about the dating market effects. As if a female date will not have an idea about the other persons income, as revealed from where they eat out or are entertained, or where the person lives or went to school, or what job that person has,,,ad infinitum of information.

Just a silly argument that extends beyond the normal insight.

The interesting question would be:

Would tax disclosure increase compliance, and would that, in turn, reduce your taxes, or would having low taxes be a badge of honor.

I didn't come into this with any strong opinion either way, but it seems to me that rich people are more likely to want to tell everyone how much they make than to hide it.

Didn't both Trump and Wilbur Ross contact Forbes and plead to be on their list? Maybe they are atypical and there are more secret billionaires than I know.

Anyway, still without a strong opinion, I would lean towards the idea because I think it would encourage serious discussion about tax rate and to discourage tax cheating.

Donald Trump wants to be on the Forbes 400, but he doesn't want you to know the details of how. That's actually kind of suspicious.

Donald trump is obviously lying about his wealth.

The solution to that is not to give the entire world access to my household income information. It’s a total non-sequitur.

Trump is a big liar? Maybe we should all support Bill Weld!

(Tragic network effects. More people would support Weld if they were sure everyone else would.)

Sure, you can write in whomever you want.

But publishing income information is a terrible idea.

Tax returns say very little about wealth.

Supposedly the CEO of twitter was paid $1.40 last year. Apparently Twitter does not issue dividends on stock so unless he sold some of his 16 million shares, his stock produced no income.

Is he wealthy or not?

As a counterpoint, it would give identity thieves a lot more to work with.

Finland was voted the happiest country in the world last year so these social concerns might be a bit overblown.

From the Department of Giving the Devil His Due:

the Rolling Stones' 1974 contribution "Fingerprint File" retains with its melodic rhythms concluding prescient lyrics apropos of so many of our contemporary internet topicalities and realities:

"these days, it's all secrecy, NO privacy . . ."

Forty-five years old and counting: how prescient might pop lyrics in the interim have become?

I remember reading in Schoeck's "Envy: A Theory of Social Behavior" that tax returns were public in Wisconsin in the first half of the 20th century. Can't find any info on that by googling though.

In Finland we indeed have the possibility to check the records of anyone's taxed income at any time. However, hardly anyone does this for the simple reason that you would have to go to an office of the FInnish tax authority to check them (the records are not available on the internet).

I don't know, in general it seems to me that if in the US something is technically possible, someone will always turn it into a big business or a civil movement or something. In Finland, no-one cares enough.

'someone will always turn it into a big business or a civil movement or something'

George Carlin, American comedian - 'Where ideas are concerned, America can be counted on doing one of two things: take a good idea and run it completely into the ground, or take a bad idea and run it completely into the ground.'

@Anonyymi:

Elegant username that sounds Finnish!

1) People would mostly be interested not in taxes but in what their co-workers make. Workplace chaos would ensue.

2) Property taxes are the big nut for many people, and somehow seem to escape notice in these discussions. How would "transparency" work for that?

1. There is a separate literature on public salaries.

2. Property tax appraisals are already public.

It remains interesting how many people seem unaware of how much information is public in the U.S.

" People would mostly be interested not in taxes but in what their co-workers make. Workplace chaos would ensue."

Really? Workplace chaos would ensue?

#2 Property records are bit trickier to read. A person may have a more expensive house than you because their spouse has income yours doesn't, because they inherited money, or they took on more debt than you.

Seems to me you could make the same argument about criminal records.

And of course everyone's assessed property values are available on line too... unless you can try and hide behind an LLC.

Criminal records need a logical expungement method if one doesn’t exist already. Probably varies state to state.

The argument for public records in this area are also about holding the state accountable. We need records to see if the police are harassing a particular group. We need to be able to demonstrate if an AG or DA is going after political opponents etc. Remember the Wisconsin debacle?

Private income information should remain private since the area lacks the same accountability concerns. OTOH, the political norm regarding tax returns should be enforced via the ballot box.

By that logic you could say the same for tax returns. They they hold the state accountable for fair treatment, enforcing its own rules, not abusing audits, etc.

Think of all the economic research one could do if tax returns were public?

Does that political campaign investment in Wisconsin Governor Scott Walker pay off with lower taxes. You bet you could prove it.

Here is an example from Wiki, using the Koch Brothers as an example:

"Under the new law, Charles and David Koch could pay about $1.5 billion in taxes each on their business income, versus the nearly $2 billion they would have owed under previous law. These two provisions alone could save them about $500 million each, or $1 billion in total"

Looks like political contributions are good investments....

Cui bono? Who has the most to lose with publication?

Cheaters; hypocrites; liars; criminals; corrupt officials; self-dealing legislators; abusers of tax shelters; those paying very low effective tax rates; deadbeat dads; those who hide behind corporate veils; those who exploit the limited ability of the IRS to compare returns, follow leads, and connect dots; ...

Anyone with complex taxes that can be spun by media as "UNFAIR!" or "cheating!"

People here need to wake up and realize the media just spent 2 years on a bullshit claim.

You really want to allow a media that could string out complete garbage for 2 years to run with your tax information?

Imagine a world beyond Trump. "Get Trump" is fine, but anything you do to achieve that will remain afterwards. Be wary.

Still not sure why this one aspect of life is special. Absence of tax data has not stopped the media from being the media, identity thieves from thieving, the economy from being inequal, or Presidents from being obstinate.

Let's test Tyler's silly dating hypothesis.

Anyone care to compare Norwegian mobility with American mobility? Do you see the effect that Tyler posits?

I think a more interesting story would be how people who don't pay taxes can acquire Time Magazine and publish an economiststo write about why executives are not overcompensated.

Do you believe that Before the Koch brothers acquired Time you would have seen that article.

Transparency, Yes. I hope to live long enough to witness the invention of the Truth Detector, a device which detects lies in spoken or recorded speech with 100% accuracy.
The day after the invention is announced there will be multiple bills introduced by politicians banning the sale, use or reference to Truth results including criminal penalties.

Another benefit of tax disclosure is that it would deter fraud...fraud not just on the government, but on others who rely upon accurate information about income.

Just ask Donald Trump's insurance company if they would have been able to detect fraud had they had his income tax statements or the detailed analysis that would have accompanied the disclosure.

I think this is a weird article, as it is framed as being contrarian (as if people in general think it is a good idea for tax returns to be public), but really it is just Applebaum and Yglesias having a dumb idea. The mainstream issue is whether we should continue the norm of serious presidential candidates basically required to release their returns so that we don't elect people with major conflicts of interest, records of obvious fraud, etc., and it is annoying (and frankly beneath TC) to not consider this part. I realize that TC will likely say that he is quite clear on what he is focusing on, but it would be obtuse to not recognize that this article's tone will be read by many people as pushing back against the idea that Trump should release his returns.

In general, I am a fan of TC's writing, but I hope the above criticism is read.

"Tax transparency would give high-earning men and women a bigger advantage and hurt their lower-earning competitors. "
True for high-earning men, but false for high-earning women.

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