Taxing Ourselves, 4th Edition: A Citizen's Guide to the Debate over Taxes fourth edition

I've always enjoyed public finance economics (we're undoubtedly a small group) and Professor Slemrod's (with John Bakija) 4th edition of "Taxing Ourselves" is a very comprehensive, fair-minded, and clear presentation of the issues involved with our current income tax system and proposals for new tax systems. Given that the authors are economists, the analysis focuses on issues of economic efficiency and prosperity, and not so much on political or legal issues, and is clearly-written and devoid of jargon and thus should be accessible to anyone interested in the most efficient and fairest manner our government should finance itself. The authors recognize that for many taxpayers, any "reformed" tax system is evaluated by how it will affect the taxes due for those taxpayers, but they assume their readers, being public policy-oriented, are more interested in how various tax systems would affect our nation, our economy, and our society. They also acknowledge that as economists, while they can help ascertain the costs, efficiency, impact on taxpayer behavior, and overall effects on economic prosperity and growth, the issue of fairness, e.g., proportional tax vs. progressive tax, capital income taxed at the same rate or a lower rate than income from labor, is an issue that economists have no special insight and that the issue of fairness is ultimately one of political, social, and economic values.The authors evaluate our current income tax system (both personal income tax and corporate income tax) and review its strengths and weaknesses. They later, in much detail, evaluate proposals for different tax systems including the more consumption-based national sales tax and value-added tax, as well as the "flat tax." There seems to be a trend, at least to me, that many economists favor a consumption tax like the value-added tax, while more political-minded policy analysts are less enamored of it, and prefer to modify the existing income tax system. Economists like the fact that consumption taxes (as a substitute for progressive income taxes) don't have the potentially disincentive effect of a progressive rate structure, don't discourage savings and investment, and in the words of one economist: "tax you based on what you take out of the economy [consumption] and not what you put in [income]." On the other hand, politically-minded observers view consumption taxes as "dead"; conservatives are wary of their revenue-generating ability and liberals are concerned about their actual and potential regressive effects. The authors spend a fair amount of time assessing the "flat tax", a proposal that seemed to have more traction 10 or 15 years ago but less today. Even with a single, proportional rate, they suggest that a modified progressive structure may be imparted by inserting a tax exemption for, say, the initial $50,000 in income. There is much concern, however, that a revenue-neutral flat tax would substantially lower taxes for many wealthy people while increasing them for the middle class.In effect, the authors don't provide their "optimal tax"; instead they provide a pro and con assessment of the various proposed tax systems, as well as modifications to the existing income tax system, to enable us as informed citizens to make reasoned judgments. Their hunch is that a complete overhaul of the current system is not likely, and that various modifications to the existing income tax system are more likely. In any event, economics suggests that a broader tax base, i.e., less deductions and exemptions, and lower marginal tax rates, work best for a prosperous economy. In overlaying the "fairness" issue, many would advocate a progressive tax rate structure on this system (similar to what we have today); others might suggest a proportional tax is more "fair." In my view, "vertical equity" and the fact that a taxpayer's current income is the best measure of his "ability to pay" argues strongly for retaining a progressive structure.

This is an outstanding discussion of U.S. tax policy, and I unequivocally recommend it. Having said that, let me add some constructive comments:1. A fresh edition would be welcome.2. There is a strong presumption of the correctness of market solutions. While there is mention of externalities, a bit more elaboration on pigovian sumpturary taxes (e.g., carbon tax) would be helpful.3. There is a general predisposition to treat total gdp as the maximand--and then add that moral judgments must be made with respect to issues such as income distribution. Might it not be better to set an objective function more explicitly inclusive of moral judgment, such as a maximand of median personal income over an extended time.I have not read all other comments, and if these points have been made (or refuted) before, I apologize to the originator.

I used this book as a text for a masters-level tax policy class taught by the author, Joel Slemrod. Don't let this mislead you, the book is not written as a text, you will not find many graphs if any, and the language is clear and concise. The title tells you what it is: a citizen's guide.Maybe you don't think tax policy makes for beach reading, but this book is different. Additionally, Prof. Slemrod is fair and not ideological, so tax policy and suggested reforms are given their proper treatment in here. This book is NOT designed to be used in a screaming match with your relatives at Thanksgiving. You may also find yourself questioning your own opinions as you work through it, and reinforcing other opinions with strong facts and economic argument.

After reading this, I have quite an insight into how our tax policy is conducted and how it affects us tax payers. Believe it or not, I felt somewhat powerful when finishing reading this due to the fact that it tells you how the tax policy works and introduces different alternatives to our current tax policy. Knowledge truly is power.

Great book. Very readable. It's written in an entertaining style - not easy for a book about taxes - and yet it covers serious topics and is very informative. It provides a great quick overview of tax policy to help the reader sift through the political rhetoric of the daily news with enough knowledge to know what to look for and how to start analyzing what's being said.

In an age where politicians spout off figures left and right that clearly contradict "the other side", being informed about the FACTS is essential. This book is exactly that. It is very fair, and unbiased -- it doesn't start from a political position and interpret the facts through that lense. Rather it attempts to take a thorough look at the tax system, and examine the economics of it before drawing any political conclusion. An impressive piece of work.

No US citizen should comment on federal tax policy without having read this excellent text. It is informative, balanced, constructive, and well-written (especially for a book about taxes!). It suggests how demagogical and ignorant most public discourse about federal taxes is. This book is also candid about how inconclusive much economic research on federal taxes is, and how value preferences, particularly about distributive justice, are finally ineliminable from discussions about tax policy.

This book was required reading for a grad class on tax policy - but I was ecstatic to find that it is really accessible to lay people. You won't find tons of technical jargon, and what jargon there is will be explained thoroughly.I liked this book enough that I picked it up and read it again a year after my class ended.