Citizens rightfully bear the responsibility to contribute to the existence of just government through the rendering of taxes. Because tax policy is also a reflection of values, citizens in a democratic society should be concerned with how taxes are collected and spent.

Using the fundamental concept of "excess burden" as their guide, in "The Real Tax Burden: More Than Dollars and Cents," Alex Brill and Alan Viard illustrate how taxes work and their affect on such things as wages, savings, and economic growth. The authors describe past and present forms of taxation, discuss our current income and corporate tax policy, and critique various options for fundamental tax reform. "The Real Tax Burden" is a primer in the Values & Capitalism series intended for college students.

Chapters in "The Real Tax Burden"

Introduction to "The Real Tax Burden"

When people discuss tax policy it is often to complain about it. In these discussions, the tax burden one faces is almost always assumed to be the dollars and cents of taxes paid to the government. This limited focus on tax payments threatens to obscure what many economists consider the real tax burden, which they refer to as the excess burden of taxation.

"Because tax policy is also a reflection of values, citizens in a democratic society should be concerned with how taxes are collected and spent."

Although tax payments are burdensome to taxpayers, they provide revenue to the government, which can use them to provide benefits and services that offset the burden (if the benefits and services are provided effectively and lie within government’s legitimate role). In contrast, the excess burden discussed in this book is pure waste that provides no revenue to the government. As we explain in the upcoming pages, excess burden arises when taxes interfere with the taxpayer’s freedom to choose his or her preferred behavior. This interference with freedom is, in many ways, the real tax burden, more than the dollars and cents paid to the government.