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This chapter argues that nominative tax returns should not only be understood as pragmatic documents, which were created in response to a fiscal demand, but also as value-laden texts, which are revealing of how certain groups conceptualized society and the people within it. It demonstrates this with particular reference to the unmarried, female taxpayer in 1379, by analysing how the category ‘single woman’ is used in relation to other categories, such as ‘widow’, ‘daughter’, or an occupational status, including ‘servant’. The return for the borough of Bishop's Lynn in Norfolk is the main text, but it is also compared with other poll tax returns. The returns offer different and conflicting representations of the unmarried, female taxpayer and not all of these are ones necessitated by the tax criteria. There is a particularly telling intersection between work identity and widowhood or daughterhood.

In the century after 1563, the world of the copyholders of the manor of Whickham was utterly transformed by industrial development. Long before the mid-seventeenth century, however, most of the inhabitants of Whickham were not copyholders, and never had been. While one outstanding social consequence of industrial growth had been the dissolution of the agrarian community of the sixteenth century, there are two others that also demand attention: the emergence of a new industrial population, and the creation of a new social structure. Both of these processes were in train by the turn of the sixteenth century and they proceeded alongside, and were influenced by, the struggles of the copyholders to adapt to the dynamic of economic change. It is only in the 1660s, however, that we are able to take stock of these developments in the parish as a whole – the opportunity being provided by the hearth-tax returns of the Restoration era. This chapter presents an anatomy of the population of the parish in the reign of Charles II – a population that had emerged in the course of three generations of drastic change and which lived, in William Gray's telling phrase, ‘by the benefit of coals’.

This chapter examines the distribution and impact of the Hope Learning Credit (HLC) and Lifetime Learning Tax Credit (LLTC) on taxpayers, students, and institutions. By reviewing the literature and analyzing several data sets on tax returns, individual behavior, and institutional activities, the chapter examines three major questions. First, how have the tax credits been distributed by income? Although no program is likely to reach all eligible students, the higher education tax credits provide a new opportunity to test how effective it is to deliver college aid through the tax system. Second, how have the credits affected the college decisions of individuals? Have they prompted individuals to attend college who would not have otherwise? Have the credits encouraged students to choose more expensive colleges? The chapter also looks at how postsecondary institutions responded to the tax credits.

This chapter describes three major consequences of the federal government's reliance on a highly visible return-based mass tax. First, the return-based income tax, coupled with inexact withholding, has proven to be an enduring compromise between big-government proponents (who generally favor low-visibility, low-pain taxes, and for whom the ideal system might feature return-free exact withholding) and small-government proponents (who would prefer taxes to be as visible and as painful as possible, and for whom the ideal tax might be an income tax without withholding). Second, a return-based tax confers taxpayer status and a sense of fiscal citizenship in a way no retail sales tax, VAT, or return-free tax ever could. Third, the near-universal return-filing requirement, coupled with a tax return due date applicable to all individual taxpayers, has focused media attention on big-picture tax policy issues on and around every April 15.

This chapter considers the return-based mass tax as a vehicle for not paying taxes, in the case of tax protesters and tax cheaters. Income tax has been used extensively as a vehicle for protests by those at both ends of the political spectrum. A tax protest requires a tax that gives the taxpayer a choice as to whether to comply. The return-based mass tax gives that choice to almost everyone. Although there are obvious arguments against a tax system highly vulnerable to protests, the openness to protests may serve an important safety-valve function. The return-based tax is also susceptible to widespread small-scale cheating, by failing to report income and by overstating deductions. Again, although there are obvious arguments that this vulnerability to cheating is bad thing, there is also something to be said in its favor. From one perspective, it may create a sense that one is trusted by the government (within limits), which may foster a corresponding sense of trust in government. From another perspective, it gives the average person a sense of (again, limited) empowerment to resist Leviathan.

This chapter examines the relationship of corporate tax privacy and tax compliance from a new vantage point, which is called the “intercorporate perspective.” In the United States, all tax returns and return information of corporations are confidential. An unappreciated value of corporate tax privacy is that it can limit the pressure to pursue aggressive tax planning and reporting that corporate tax directors often face from significant shareholders, nontax managers, and even themselves. Corporate tax privacy provides the government with valuable strategic defenses by restraining the ability of a corporation’s stakeholders and agents to engage in “benchmarking” and “reverse engineering,” behaviors that would likely cause some tax directors to pursue more aggressive tax planning and reporting. Yet, at the same time, increased public access to certain corporate tax return information could enable the public to participate in informed debate and discussion of the corporate tax law and to question whether the governments is applying the tax law to corporate taxpayers effectively and fairly.

This chapter sets out the book's purpose, which is to defend tax returns from a very different perspective. It argues that tax returns serve important purposes apart from accommodating high degrees of complexity, one of which is raising the tax consciousness of the average citizen, compared with the low level of tax consciousness that would prevail under a federal retail sales tax, VAT, or return-free income tax. The book also makes the case for retaining a return-based mass income tax not because such a system can accommodate highly complex rules for determining tax liabilities, but because of the potential of a return-based system to promote fiscal citizenship. An overview of the subsequent chapters is also presented.

This chapter discusses the two wartime legislative decisions that resulted in the return-based mass income tax: (1) to finance the war with a mass income tax rather than a federal retail sales tax; and (2) to require all income taxpayers to file returns (rather than using a return-free system of exact withholding for most taxpayers). If not for the Roosevelt administration's aversion to a federal retail sales tax, the United States might have emerged from the war with a retail sales tax as the instrument of mass taxation and with an income tax applicable only to the economic elite.

This chapter urges Congress to simplify the substance of the tax law and the return-preparation process in order to enhance and preserve the benefits of return-based mass taxation. In particular, it endorses proposals to provide a tax agency reconciliation option (i.e., tentative returns prepared for taxpayers by the IRS) for taxpayers with relatively simple tax situations, and for the IRS to establish a secure online database from which all taxpayers could retrieve and download into their returns all their tax information reported to the IRS by third parties.

The Netherlands currently taxes capital income on the basis of a presumptive rate of return and leaves the actual returns on capital untaxed. This means that the Netherlands effectively levies a wealth tax instead of a capital-income tax. A tax on actual returns is more equitable and more efficient than the current tax. It would, moreover, be better for macro-economic stability. Thus, the Dutch government would be wise to move from a tax on presumptive returns to a tax on actual returns. Contrary to current policy, such a tax should ideally be levied on the returns on all forms of private wealth, including housing and pension wealth. Finally, it should, again ideally, tax capital gains on an accrual basis and tax above-normal returns at a higher rate than normal returns.

Tax-efficient asset management confronts investors with a traditional asset allocation problem—how much of each asset to hold—and also an asset location problem. The traditional asset allocation problem concerns how much you should put into bonds. But taking account of taxes means having to figure out how much of your bonds you put in tax-deferred accounts versus taxable ones. Taxes also affect asset prices, a fact that can be exploited by a savvy tax-exempt investor.

This chapter presents arguments for protecting American workers from a tax increase. To avoid a significant shift in the tax burden away from those at the top down the income scale, it proposes to retain tax on inherited wealth and an income tax on income over $100,000. The chapter suggests that the income tax be imposed at a low rate, in the range of 20 percent to 25 percent. The only reason to collect a consumption tax from individuals rather than from businesses is to allow exemptions or to impose progressive tax rates. The chapter also argues that the task of protecting low- and moderate-income families from a tax increase must take a different approach in consumption tax proposals, such as a common credit-method VAT or a retail sales tax, which would eliminate the requirement for individuals to file any tax returns.

Numerous studies have found that the distribution of income in the United States has become increasingly unequal—in particular, the share of income accruing to the highest-income households has increased, whereas the share accruing to other households has declined. The primary source for information on the income distribution in the United States is the Annual Social and Economic Supplement to the Census Bureau’s Current Population Survey (CPS). In an influential paper, Thomas Piketty and Emmanuel Saez employed an alternative method, using data from tax returns to examine market income inequality in the United States over almost a century. Each of those data sources has strengths and limitations. This paper presents estimates of the distribution of household income in the United States, derived from a statistical combination of data from the Current Population Survey and from samples of income tax returns. This combined series overcomes some limitations of estimates produced from either the CPS or the income tax data alone: it covers the full population while maintaining the richness at the top of the income distribution, and can yield comprehensive estimates of the effect of the tax and transfer system on the full income distribution.

The traditional corporate tax regime creates costly distortions via a preference for debt over equity and possibilities to shift profits to low-tax countries. To overcome these problems, fundamental reforms towards a comprehensive business income tax (CBIT) or an allowance for corporate equity (ACE) have been proposed. A pure CBIT is undesirable—while reducing debt bias and profit shifting, it exacerbates investment distortions. However, a pure ACE is undesirable as well. Although the ACE would both remove debt bias and no longer distort firms’ investment decisions, it would strengthen profit shifting. Because the world features multiple distortions that cannot be simultaneously eliminated, tax policy should not aim to fully remove all finance distortions to contain investment distortions and profit shifting. Therefore, the current system should be amended by a stripping rule that restricts deductibility of interest expenses and royalty payments to a certain threshold of earnings before interest, taxes, depreciation, and amortization (EBITDA).

This chapter introduces the subject by focusing on the tax reporting process—in particular how time-consuming it is and how it fails to make use of new technology. This chapter confirms what is understood by most tax professionals who are analytical about the current system—that the income tax is fraught with serious problems. However, the chapter explains that the biggest and most important problems are structural and endemic to any income tax, although far worse in the current US income tax than need be.

On 4 April 1996, the Supreme Court issued a ruling on the case of Common Cause v Union of India, arguing that the Election Commission (EC) has the power to require political parties to submit the expenses they and their candidates had incurred during the elections. The Court also ruled that every political party is required to file income tax returns and to maintain audited accounts in order to claim tax exemption under Section 13-A of the Income Tax Act 1961. However, state aid to political parties for elections, whether in money or in kind, is useless if party bosses will just usurp it to enrich themselves. This chapter examines Germany's law on state funding of political parties' election expenses and how India can learn from it to address decadent political culture.

Investment in intangibles does not increase the volume of the capital stock nor is it designed to do so. The aim is to increase the efficiency of tangible investment. The volume of the capital stock must therefore be represented by tangible capital; intangible assets such as those that arise from investment in research and development and other forms of intellectual products must be excluded. A large tax credit in the US for R&D was introduced in 1981. Before that private sector spending on IP averaged 12 per cent of total investment and has since risen to over 30 per cent. Over the same period TFP, as measured by either the consensus model or mine, has deteriorated, investment in R&D is either ineffective or mismeasured. Measuring the volume of capital exclusively in terms of tangible assets thus has the additional advantage of excluding data of dubious accuracy.