Costly Returns: The Burdens of the U.S. Tax System.

• Author: Tullock, Gordon

When I first agreed to review this book I expected it to be a fairly low level popularization. It is indeed a popularization, and people without economic training can easily read it, but it is not low level.

Basically, what Payne has done has been to calculate the actual cost of various taxes, primarily the federal income tax. In this cost he includes the cost to the taxpayer of maintaining records, filling out the forms, becoming informed on the tax law, and then bickering with the IRS as well as the incentive effects.

He has, as far as I can see, and I am not an expert on this subject, done his best to make use of what research has been done on these costs, and make estimates of a relatively impartial nature where there is no previous research. His estimates that each dollar received by the federal government costs society $1.65.

His handling of what is usually referred to as excess burden is a little clumsy, but there is no reason to believe that he exaggerates. I sincerely hope people who are more expert than I on these matters will go over the details of his computations carefully, but I doubt they will find major errors.

Payne points out we could switch to other taxes that don't have all of this additional enforcement and compliance costs, but they are politically unpopular. The only one he deals with in detail is the head tax. He does not cover the value added tax, and his interest in a strictly proportional income...