Taxing Ourselves: A Citizen's Guide to the Great Debate over Tax Reform

by Joel B. Slemrod, Jon M. Bakija

Who should pay taxes, how should they be collected, and how do they affect the economy? Should the income tax be tinkered with, replaced with a flat tax, or left alone? Cutting through the academic jargon and self-serving Washington-speak, Joel Slemrod and Jon Bakija bring together all of the data, analytical insight, and related material bearing on tax reform to explore the fundamental questions and choices inherent in tax policy making.
Taxing Ourselves begins with a concise overview of the U.S. tax system as it exists today, offering historical and international perspectives on taxation. It examines the criteria that should serve as guides for tax policy - fairness, the promotion of economic prosperity, and simplicity - and explores the controversies and difficulties related to each one. Crucial questions about how the burden of our tax system is actually distributed and the economic effects of taxation are addressed.
Slemrod and Bakija review the key elements of fundamental tax reform proposals, including a single rate, a clean base, and a consumption base. Finally they take a detailed look at the major alternatives for tax reform, providing concise guidelines that will make clear the choices involved in tax policy.

Genres: Economics, Politics, Nonfiction, Taxation, Public Policy, Accounting

299 pages, Hardcover

First published January 1, 1996

About the author

Joel B. Slemrod (born July 14, 1951) is a Professor of Economics at the University of Michigan and the Paul W. McCracken Collegiate Professor of Business Economics and Public Policy at the Stephen M. Ross School of Business at the University of Michigan.

He received his B.A. degree from Princeton University in 1973 and a Ph.D. in economics from Harvard University in 1980. He has been at Michigan since 1987 and does research on taxation, with a focus on taxation of personal income. He is co-author with Jon Bakija of Taxing Ourselves: A Citizen's Guide to the Great Debate over Tax Reform and is editor of Does Atlas Shrug? The Economic Consequences of Taxing the Rich. He is currently the chair of the Economics department at the University of Michigan. Dr. Slemrod also serves as Director of the Office of Tax Policy Research, which is a research center at the University of Michigan on matters of tax policy.

In 2001, Slemrod shared an Ig Nobel Prize with Wojciech Kopczuk, of Columbia University, for a paper concluding that people find a way to postpone their deaths if that would qualify them for a lower rate on the inheritance tax. In 2012, Slemrod was awarded the Daniel M. Holland Medal by the National Tax Association.

Reviews

[Austin Matthews]

This book is a great primer on how taxes work, why they are arranged as they are and who benefits from varying tax regimes. It's fairly informative and attemptedly unbiased.

However, this book is incredibly boring. As someone who loves to talk about taxes for fun and professionally, I thought the details were drab and elementary. If you didn't like the topic or have a firm mind, you might get lost after Ch. 3.

Overall, it's not a bad book. Taxes are boring as hell and the book provided the highest enjoyment of grueling tax information I've received.

[Gabe Reyes]

I would like to thank my professors for giving me to this after I finished her class, she described it as not the most textbook like book. I disagree, it was sort of dense lol. It's a really important topic that I know most people know very little about, including other economists. I can't imagine normal people picking this up and reading it, but they should!

[Izzy]

Can’t believe I’m finishing my last semester…

[Bethany]

I read the fourth edition published in 2008. This book was surprisingly easy to digest. These two gentlemen advise us that the best overhaul for the US tax system is to start fresh with a VAT and wage tax or some form of consumption tax rather than an income tax. It gets complicated with economic models and shit. What is unreal and I can’t believe I’m going to put in writing is that Trumps tax plan really wasn’t so bad. It was ballsy actually and is putting us on the path toward an improved tax system. Bleh. Bad taste in my mouth. I’m not looking forward to sweeping tax changes (as an accountant) but I think it’ll be for the best. I prefer we get it right rather than continue to put bandaids on a bleeding artery. Here’s to the future.

[Shabbir Hamid]

I didn't read this whole book, but just parts of it. It has some very good discussions that I think every American citizen should read.

[Nir Haramati]

Any text that talks about taxation without emphasizing it social benefits and its egalitarian necessity is not worth the time spent on reading it, and, in general, any economic text that fail to place at its center the impact of its promotions on real people and their interactions outside its formulae is inherently biased against broad based relevance.
To claim that taxes make us poorer is to ignore how infrastructure, R&d, public education, essential services, police, military, and so on, enrich our lives.
To claim that taxes infringe on innovation is to ignore the evidence showing that when taxation was at its highest in the US, productivity and growth achieved rates 50% higher than with lower taxes (between late '40 and early '70 of the 20th century, tax rates were 91% and both growth and productivity at ~3%; since, taxes were lowered to about 35%, and both growth and productivity are hovering around 2%).
As to the arguments for consumption taxes, try to imagine the potential havoc and civic unrest that would be unleashed by taxing every corner store purchase by 30%-50% tax, every time you buy bread, milk, or a chocolate bar, every day of the year: if people consider evasion when faced with government might, consider the length they would go to when faced with a store teller. The amount of policing expanses required for enforcing such a tax alone would eat up any advantage such taxation might have had. In addition, since the rich have access to means of production that the poor do not, taxation on consumption would actually exacerbate class distinction and tensions.

All in all, despite the length to which the book exposes problems with current taxation scheme in the US, because of its misrepresentation and avoidance of some important related issues, such as the positive aspects of tax collection in a democratic context, this book can be left unread except as a cautionary tale with respect to how NOT to design a tax system, or economic policies in general.

[Brenda]

"Taxing Ourselves: A Citizen's Guide to the Debate Over Taxes" by Joel Slemrod and Jon Bakija covers the many different tax regimes from sales tax, to the Value Added Tax (VAT), to a flat tax, progressive tax, and regressive tax, and also looks at hybrids between them. This book was definitely not for me. I found it incredibly dense and a little bit boring to read, but I slogged my way through. The book mainly focuses on the application of taxes, not on how they are utilized. From the title I think I was expecting something a little bit more high level - for the ordinary "citizen", ranging from the high school drop out to the multiple degree graduate student. The big take aways that I gleamed was the importance on reading between the lines on tax policy proposals and understanding future impacts - for example, the impacts of transitioning to an all sales tax policy on the retired who based their savings on an income tax based policy. Also to look at the trickle down effect of proposed tax policies and potential tax shifting. The book provides an excellent example of tax shifting that includes two highways (Highway A and Highway B) where one (Highway B) is converted to a toll road and the common thought that this will only impact the drivers of Highway B as they now have to include this cost in their finances. The unintended consequence is that drivers may now switch to utilizing Highway A, impacting original Highway A drivers with more congestion and potential delays. This really stuck with me and I wish the book held more of these simple examples. Another high point that stuck with me is the potential administrative costs that should be considered for each new tax policy, as well as the complexity and implications to filing.
Overall, the book provided a lot to think about.

[Meghan]

This should be required reading, but maybe I think this because I love tax policy... it should at least be required reading for people who have opinions on tax policy and like to vote, and also for people who make tax policy (worst review ever).

[JimZ]

Outstanding tax policy volume by America's leading expert on taxes (Joel Slemrod) and co-author Jon Bakija. Intended for the non-technical reader, it is nevertheless full of well-explained concepts and facts.

[valerie]

if you needed any additional evidence of my abject dorkiness, here you go: this book is awesome.

[Katherine]

The best book on taxes. Ever. And it's totally understandable if you don't have background in the subject.

[Melissa]

This is a great introduction to the basics of tax policy. Covers a lot of the economic aspects necessary for consideration in proposing reform. Don't bother if you've taken a class on revenue theory.

[H2]

A good hard read, but worth the effort

[Cindy]

had to read this book for a class, but it was very informative and easy to understand!

[Amber]

Very good. I'd be interested to read an updated version that accounted for ACA and recent changes in the tax code.