Five charts to start your day

What frustrates Americans about the tax system?

One of the things I’ve never been able to get my head around in the US tax system. It’s complicated, weird and I hope I never have to pay it. They price things in shops without sales tax included, you have to pay a property tax even if most of your house is mortgaged and the IRS will go on a multi-billion-dollar mission to the moon if an astronaut forgets to pay their tax bill.

This beautiful data visualisation from Visual Capitalist shows that I’m not alone. Many Americans feel frustrated with the complexity of the US tax system.

The dataset here is from Pew Research, illustrating the levels of frustration among respondents regarding general complaints about the American federal tax system. Bear in mind we are talking only about federal tax here and not about all those other weird taxes I mentioned.

The survey involved over 5,000 American adults and was carefully weighted to reflect the demographics of the entire US adult population, considering factors such as gender, race, ethnicity, partisan affiliation, education and others, just in case you ask.

So what's the takeaway here? The simpler and easier it is to pay taxes, the harder it is to avoid paying tax. This is what I learned in public economics when I was at university. Interestingly, the US was often used as a case study of a bad tax system that actually costs the US government tax revenue.

An ideal tax should minimise the burden on everyone, rich and poor, and maximise the revenue the government receives. If you make your tax system too complicated, the wealthy find loopholes not to pay, and the less wealthy have no incentive to earn more to pay more taxes. It’s not really rocket science.

Source: Visual Capitalist

Coming up:

• Rising tide of underwater home mortgages across the US

• The end of total bond returns

• A third of US Government revenue to be consumed by debt service

• US small business optimism hits an 11-Year nadir

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