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

by Joel B. Slemrod, Jon Bakija

The fourth edition of a popular guide to the key issues in tax reform, discussing the current system and alternative proposals clearly and without a political agenda. As Albert Einstein may or may not have said, "The hardest thing in the world to understand is the income tax." Indeed, to follow the debate over tax reform, the interested citizen is forced to choose between misleading sound bites and academic treatises. Taxing Ourselves bridges the gap between the two by discussing the key issues clearly and without a political Should the federal income tax be replaced with a flat tax or sales tax? Should it be left in place and reformed? Can tax cuts stimulate the economy, or will higher deficits undermine any economic benefit? Authors and tax policy experts Joel Slemrod and Jon Bakija lay out in accessible language what is known and not known about how taxes affect the economy, offer guidelines for evaluating tax systems, and provide enough information to assess both the current income tax system and the leading proposals to reform or replace it (including the flat tax and the consumption tax). The fourth edition of this popular guide has been extensively revised to incorporate the latest information, covering such recent developments as the Bush administration's tax cuts (which expire in 2011) and the alternatives proposed by the President's Advisory Panel on Federal Tax Reform. Slemrod and Bakija provide us with the knowledge and the tools—including an invaluable voter's guide to the tax policy debate—to make our own informed choices about how we should tax ourselves.

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

382 pages, Paperback

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 · Rating 4 out of 5]

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 · Rating 4 out of 5]

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!

[Bethany · Rating 3 out of 5]

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 · Rating 3 out of 5]

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 · Rating 1 out of 5]

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 · Rating 2 out of 5]

"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 · Rating 3 out of 5]

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 · Rating 5 out of 5]

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 · Rating 4 out of 5]

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

[Katherine · Rating 5 out of 5]

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

[Melissa · Rating 3 out of 5]

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 · Rating 4 out of 5]

A good hard read, but worth the effort

[Cindy · Rating 3 out of 5]

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

[Amber · Rating 4 out of 5]

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