Reviving Fiscal Citizenship∗

Ajay K. Mehrotra**

Learning to Love Form 1040: Two Cheers for the Return-Based Mass Income Tax. By Lawrence Zelenak. Chicago and London: University of Chicago Press. 2013. P. 124. $35.

April 15 is a day that most Americans dread. That date is, of course, when federal and nearly all state-level individual income tax returns are due. Agonizing over the filing of income tax returns has long been a perennial part of modern American legal culture. Since the mid-1940s, when the United States first adopted a return-based mass income tax, the vast majority of Americans have been legally required to file an annual Form 1040.[1] Over the years, taxpayers have been complaining about, procrastinating over, and generally loathing the filing of their annual tax returns. Indeed, in recent times, April 15 has even become a day for political protests—an opportunity for some activists, like those in the Tea Party movement, to rail against what they believe to be “excessive taxation and government spending.”[2]

There was a time, however, when taxpayers tolerated and perhaps even looked forward to tax day. Armed with nothing but a pencil, paper, and calculator, individual taxpayers in an earlier era willingly sat down with a shoebox full of receipts and took on the personal task of categorizing their tax information, listing their deductions, and determining their net income and ultimate tax liability. They understood that paying taxes was an important part of belonging to a broader political and social community. During moments of national crises, many citizens even viewed tax paying as part of their patriotic fiscal responsibility—as a way to share in the sacrifices required by war and other emergencies.[3] Evoking Justice Holmes’s famous aphorism that “[t]axes are what we pay for civilized society,”[4] citizens welcomed tax day as a chance to fulfill their civic duty to contribute to the commonweal.

Today, those earlier days of tax-induced civic engagement seem to be a distant memory. Not only have many Americans become disenchanted with the overall tax system, as evidenced by recent public opinion polls.[5] More importantly, as our tax laws have become more complex, an increasing number of taxpayers have become disconnected from the process of personally filing their tax returns. They have turned, instead, to professional tax preparers. Whereas in the 1950s only about 20% of taxpayers hired a preparer to assist them with their tax returns (p. 11), by 2008 that figure skyrocketed to nearly 60%.[6] This rise in the outsourcing of tax preparation is symptomatic of the growing dissatisfaction with the current complexity of our tax system.[7]

It is not only everyday Americans who are discontent. Lawmakers, policy analysts, and scholars have also been decrying the many defects of our present tax system. Former U.S. Treasury Secretary Paul H. O’Neill declared that the current tax system is “an abomination” and “not worthy of an advanced society.”[8] Similarly, Bill Archer, the former chairman of the powerful congressional House Ways and Means Committee, famously advised fellow lawmakers to “pull the current income tax code out by its roots and throw it away so it can never grow back.”[9] More recently, President Obama has argued that “our tax code is riddled with wasteful, complicated loopholes that punish businesses investing here, and reward companies that keep profits abroad.”[10]

In the process of criticizing the substance and complexity of the existing U.S. tax regime, scholars and reformers have also attacked our return-based tax filing system. Legal scholar Michael J. Graetz, for example, proposes limiting the current mass income tax to a wealthy minority of elite taxpayers and supplementing such a class-based income tax with a broad-based value-added tax (“VAT”).[11] One of the apparent virtues of Graetz’s plan, as the title of his book indicates, is the elimination of 100 Million Unnecessary Returns.[12] Other reformers go further. Advocates of a flat tax, calling for the complete replacement of the federal income tax with a variety of consumption taxes, contend that their diverse proposals all share the benefit of eliminating the need for tax returns, thus making April 15 “just another lovely spring day.”[13]

With an array of influential thinkers and powerful reformers aligned against the present U.S. tax system, it seems as if our current tax regime may have outlived its usefulness. Given the popular and expert antagonism, is there any hope for the future of the return-based mass income tax? Or has an institution that has long been a central part of American law and society reached the end of its life? In his new book, Learning to Love Form 1040: Two Cheers for the Return-Based Mass Income Tax, prolific tax law scholar Lawrence Zelenak[14] takes on the task of defending a simplified version of our present tax system. This is no easy endeavor, especially given the overwhelming and widespread animus toward our current income tax regime.

Zelenak is up to the challenge. Indeed, Learning to Love Form 1040 is a stirring and highly persuasive defense of our federal tax system. The book convincingly reveals the underappreciated social, cultural, and political benefits of a return-based mass income tax. Zelenak concedes that, in its present complex form, the U.S. income tax may be a “fabulous invalid” (p. 111) with a seemingly limited life span.[15] Yet he maintains that there are particular social and political features of our current tax system worth preserving. Zelenak’s goal is to show how a return-based mass income tax, albeit one that is dramatically simplified, contains numerous unsung advantages for American politics and society.

In defending the income tax, Zelenak admirably pushes the current tax-reform debate beyond its conventional boundaries. Whereas most recent studies of tax reform focus on the economic rationales for whether income or consumption is the “ideal” tax base,[16] Zelenak skillfully transcends this narrow and tired debate to explore the under-studied virtues of a return-based mass income tax. Chief among these, Zelenak contends, is the existing regime’s potential to raise “the tax consciousness of the average citizen” (p. 3). For Zelenak and others, taxation is a fundamental part of the social contract between the state and its citizens—a contract that helps us understand the meaning of “fiscal citizenship.”[17] Zelenak complements his innovative substantive analysis with an equally impressive and eclectic use of scholarly methods and sources of evidence. Borrowing creatively from history, political science, sociology, and cultural studies, he relies on a multidisciplinary set of approaches and data to make the case for a simplified, return-based mass income tax.

Yet, like most provocative texts, Learning to Love Form 1040 is not the final word on U.S. tax reform. In the process of starting an important conversation about the overlooked benefits of a return-based mass income tax, the book leaves open several significant issues. It has little to say, for example, about the impending fiscal imbalance that the United States is likely to face in the coming decades, when entitlement spending far outpaces the revenue-generating capacity of our existing tax regime.[18] In fact, the book’s normative proposals tacitly insist on maintaining “revenue neutrality” at a time when new forms of revenue may be badly needed. Likewise, in its laudable focus on “tax consciousness” and “fiscal citizenship,” the book does not directly address the state’s many duties and responsibilities in maintaining an effective social contract between citizens and the sovereign. It has little to say about how political leaders and governmental actors have a reciprocal obligation to ensure an equitable distribution of tax burdens, particularly during periods of increasing inequality. Finally, the book raises several poignant questions about the current state of American politics and civic engagement—questions that may be best answered by placing the author and his book in their own historical context.

This Review proceeds in three parts. Part I examines the central claims and findings of Learning to Love Form 1040. It showcases the creative and sophisticated arguments Zelenak uses to support a simplified version of our return-based mass income tax. Part II assesses the book’s evidentiary base. It investigates how Zelenak deploys a set of multidisciplinary methods and data to support his main contentions and to chronicle changing popular attitudes toward taxation since World War II. Part III then turns to Zelenak’s specific reform proposals and highlights some missed opportunities. After summarizing Zelenak’s three specific reforms, this last Part explores some of the issues that the book leaves underexamined. Finally, the Review concludes by contending that Zelenak’s original and inspiring defense of the income tax is a uniquely early twenty-first-century project—one that at times wistfully reflects on an earlier age to show how we can revive a robust and pragmatic sense of fiscal citizenship.

*       © Ajay K. Mehrotra, all rights reserved.

**      Associate Dean for Research, Professor of Law, and Louis F. Niezer Faculty Fellow, Indiana University Maurer School of Law. Many thanks to Reuven Avi-Yonah, Steve Bank, Dan Halperin, Leandra Lederman, Bill Popkin, Julie Roin, and Joe Thorndike for their comments on earlier versions of this Review. Thanks also to my research assistants, Rian Dawson, Xinyang Li, Kyle McHugh, and Lyndsey Mulherin, as well as to Nate West and the editors and staff of the Michigan Law Review.

[1].     See 26 U.S.C. § 6072(a) (2012) (“[R]eturns made on the basis of the calendar year shall be filed on or before the 15th day of April . . . .”).

[2].     Amy Gardner & Michael E. Ruane, On Tax Day, ‘Tea Partiers’ Protest on Mall: Activists Amass in D.C. to Decry Government Taxing and Spending, Wash. Post, Apr. 16, 2010, at A2, available at; see also Bill Fortier, Tea Party Faithful Greet Tax Day: Worcester Rally Hears an Urgent Call to Stand and Deliver, Worcester Telegram & Gazette, Apr. 16, 2012, at A1, available at; Jennifer Feehan, Tea Partiers Gather in Perrysburg, Blade (Apr. 20, 2014), For more on the Tea Party movement, see generally Ronald P. Formisano, The Tea Party: A Brief History (2012), and Theda Skocpol & Vanessa Williamson, The Tea Party and the Remaking of Republican Conservatism (2012).

[3].     Steven A. Bank et al., War and Taxes 15 (2008); Robert D. Hormats, The Price of Liberty: Paying for America’s Wars 132–33 (2007).

[4].     Compañía General de Tabacos de Filipinas v. Collector of Internal Revenue, 275 U.S. 87, 100 (1927) (Holmes, J., dissenting). This well-known phrase is shorthand for Justice Holmes’s more formal declaration: “I like to pay taxes. With them I buy civilization.” Felix Frankfurter, Mr. Justice Holmes and the Supreme Court 71 (2d ed. 1961).

[5].     According to a December 2011 poll conducted by the Pew Research Center for the People & the Press, nearly 60% of respondents believed that “so much is wrong with the tax system that Congress should completely change it.” Tax System Seen as Unfair, in Need of Overhaul, Pew Res. Ctr. for People & Press 1 (Dec. 20, 2011),

[6].     Leonard E. Burman & Joel Slemrod, Taxes in America: What Everyone Needs to Know 186 (2013).

[7].     Dennis J. Ventry Jr., Americans Don’t Hate Taxes, They Hate Paying Taxes, 44 U.B.C. L. Rev. 835 (2011).

[8].     John Hughes, Corporate Income Tax in O’Neill’s Sights: Treasury Secretary Hopes to End Levy, Wash. Post, May 20, 2001, at A7.

[9].     David E. Rosenbaum, Chairman Proposes Redefining Tax Code, N.Y. Times, June 7, 1995, at A22, available at

[10].     See President Barack Obama, 2014 State of the Union Address (Jan. 28, 2014), available at

[11].     Michael J. Graetz, 100 Million Unnecessary Returns: A Simple, Fair, and Competitive Tax Plan for the United States 62, 67–70 (2008). As the name implies, a value-added tax is a consumption tax that is levied on the amount of value added to each stage of the production process for a particular good or service. Alan Tait, Value-Added Tax, National, in The Encyclopedia of Taxation and Tax Policy 461, 461 (Joseph J. Cordes et al. eds., 2d ed. 2005); Catherine Rampell, Value-Added Taxes: A Primer, Economix (Apr. 19, 2010, 1:38 PM),

[12].     Graetz, supra note 11. Other tax scholars similarly advocate for a dual income and consumption tax regime. See, e.g., Reuven S. Avi-Yonah, The Three Goals of Taxation, 60 Tax L. Rev. 1, 4 (2006).

[13].     Neal Boortz & John Linder, The FairTax Book: Saying Goodbye to the Income Tax and the IRS 50 (2005). For a sampling of the recent scholarly revival in calling for a consumption tax to replace the income tax, see Robert Carroll & Alan D. Viard, Progressive Consumption Taxation: The X Tax Revisited (2012), and Daniel S. Goldberg, The Death of the Income Tax: A Progressive Consumption Tax and the Path to Fiscal Reform (2013). For earlier calls for fundamental tax reform that also promised to eliminate tax returns for many Americans, see Steve Forbes, Flat Tax Revolution: Using a Postcard to Abolish the IRS (2005), and Edward J. McCaffery, Fair Not Flat: How to Make the Tax System Better and Simpler (2002).

[14].     Pamela B. Gann Professor of Law, Duke University School of Law.

[15].     Zelenak has elsewhere made a similar claim. Lawrence A. Zelenak, Foreword: The Fabulous Invalid Nears 100, Law & Contemp. Probs., Winter 2010, at i.

[16].     See, e.g., Joseph Bankman & David A. Weisbach, The Superiority of an Ideal Consumption Tax over an Ideal Income Tax, 58 Stan. L. Rev. 1413, 1423–25 (2006); Daniel Shaviro, Beyond the Pro-consumption Tax Consensus, 60 Stan. L. Rev. 745 (2007).

[17].     P. 7. “Fiscal citizenship” is a term first coined, as Zelenak notes, by economist Richard Musgrave. Pp. 17, 126 n.15. But in recent years the term has been used to describe a broader relationship between citizens and the state. See generally Richard A. Musgrave, Clarifying Tax Reform, 70 Tax Notes 731, 732 (1996); Ajay K. Mehrotra, Making the Modern American Fiscal State: Law, Politics, and the Rise of Progressive Taxation, 1877–1929 (2013); James T. Sparrow, Warfare State: World War II Americans and the Age of Big Government (2011) (characterizing American citizens who contributed to national projects as fiscal citizens).

[18].     For more on this impending fiscal imbalance, see generally Cong. Budget Office, The Budget and Economic Outlook: 2014 to 2024 (2014), available at, and Bruce Bartlett, The Benefit and the Burden: Tax Reform—Why We Need It and What It Will Take 185–86 (2012).

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